The sale of mortgages to another institution occurs in which market?

The sale of mortgages to another institution occurs in the secondary mortgage market. In this market, existing mortgages are bought and sold, which enables lenders to manage their risks and replenish their capital for further lending. The secondary market plays a crucial role in providing liquidity to the mortgage market, allowing financial institutions to sell loans they have made to other investors or agencies, such as Fannie Mae or Freddie Mac.

This process helps to ensure that lenders can continue to provide financing for new home loans without being limited by their own capital or risk exposure. By doing so, the secondary market supports the overall stability and availability of mortgage financing for consumers. The primary mortgage market, in contrast, is where lenders originate new loans directly to borrowers. The commercial and home equity markets are specific segments within the broader field of real estate financing but do not refer to the activity of selling mortgages as a portfolio to other institutions.