Secondary Mortgage Market
Market where mortgage loans can be sold to investors. The availability of funds for financing real estate is affected by economic conditions, both local and national. The result is that at certain times or in certain geographic location little or no capital is available for mortgages' consequently, few if any loans are made. From the viewpoint of the lender, another problem is that real estate loans can be highly illiquid; thus, the supplier of funds can have a difficult time converting loans into cash. For these reasons, the need exists for same means by which a lender can sell a loan prior to its maturity date. The secondary mortgage market attempts to meet these needs. Capital can be made available during times of tight money and at capital-deficit locations. By selling mortgages in the secondary mortgage market, a lender can convert existing mortgages into cash which in turn be used to fund new mortgages. Likewise, an investor in the secondary market can buy existing mortgages, pay the seller a small servicing fee, and avoid the time and expense of originating and servicing the loans.
Popular Real Estate Terms
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Lender has an equity interest in the property that is the subject of the loan. The lender shares in the increase in market price of the property as well as any net income generated. ...
Owned by one individual or sole ownership. ...
Roof having two slopes or pitches on each side. The lower slope is greater than the upper slope. ...
Inappropriate and possibly harmful use of land. For example, a factory located on the shore of a river discharges toxic pollutants into the waterway. ...
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Determines the ability of soil to absorb and draw down water. A percolation test is essential to determine the location of a drainage field for waste disposal. ...
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