Mortgage Broker Company - Primary vs Secondary Market

These are not primary and second mortgages. Primary mortgage lenders deal directly with you the public. They originate loans and then lend you the money. They sell the mortgage notes (in a large package - meaning more than one loan together) to investors in the secondary market. This enables them to replenish their cash reserves. The lenders make a profit from the loan processing fees, not the interest.

The biggest buyers in the secondary market are Fannie Mae, Ginnie Mae, and Freddie Mac.

Private financial institutions such as banks, life insurance companies and private investors can also buy these notes.