Which market is made up of major lenders who sell loans to those that service and retain them?

The primary market consists of lenders who directly originate and fund loans for borrowers. In this market, financial institutions, such as banks and credit unions, provide loans directly to consumers seeking to purchase real estate. These lenders work with borrowers to evaluate their financial situation and provide financing options based on their needs.

In contrast, the secondary market is where existing loans are bought and sold, allowing lenders to manage their risk and free up capital to issue more loans. This is done by selling loans to investors or servicers who then manage the loans and collect payments from borrowers.

This distinction is crucial in real estate finance since understanding these market dynamics helps professionals navigate financing strategies effectively. The secondary market does not fit the description of major lenders selling loans to those who service them; rather, it is characterized solely by the trading of those loans after the initial lending process has taken place.