|
FNMA and FHLMC together primarily make up what is known as the Secondary Market. Although these organizations do not originate any loans, they purchase home loans originated by banks and lenders which returns the investment used by those banks and lenders to make the original loans. The return of investment is then used to originate more home loans, which are in turn are usually sold. This Secondary Market is what makes the entire process work. If banks and lenders could only lend out what they had in their savings accounts, they would soon run out of money to lend and the real estate market would come to a screeching halt. |
