Which entities make up the Primary Mortgage Market?

The correct choice highlights that the primary mortgage market consists of entities directly involved in the origination of mortgage loans. This includes residential lenders like banks and credit unions, mortgage brokers who act as intermediaries between borrowers and lenders, and correspondent lenders who originate loans on behalf of larger financial institutions. These players are crucial in providing loans to consumers looking to purchase homes or refinance existing mortgages.

In contrast, the other entities mentioned in the other options serve different functions within the broader real estate finance system. Government-sponsored enterprises primarily play a role in supporting the secondary mortgage market by buying mortgages and providing guarantees, while commercial banks are but one type of lender in the primary market, not the only one. Investment banks and hedge funds are more typically associated with secondary mortgage activities, focusing on buying and selling mortgage-backed securities rather than originating loans directly to consumers. Understanding these distinctions helps clarify the landscape of mortgage finance and the roles these various entities play.