Which of the following comprises the Secondary Mortgage Market?

The Secondary Mortgage Market is primarily composed of government-sponsored enterprises such as Fannie Mae, Freddie Mac, and Ginnie Mac. These entities were established to enhance the flow of mortgage funds, improve the affordability of homeownership, and stabilize the housing finance system. They do this by buying mortgages from primary lenders (like banks and credit unions) to free up capital, enabling those lenders to offer more loans to homebuyers.

By purchasing these loans, Fannie Mae and Freddie Mac provide liquidity, which is essential for maintaining stability in the financing of homes. They also bundle these mortgages into mortgage-backed securities, which they sell to investors, thus attracting additional capital into the housing market.

While private lenders seeking high returns, banks servicing loans, and credit unions and community banks play roles in the broader real estate finance context, they do not constitute the Secondary Mortgage Market itself. Their functions are more aligned with direct lending and servicing rather than the secondary market's role of purchasing and securitizing existing mortgage loans.