Secondary Mortgage Market Law and Legal Definition

Secondary mortgage market is where there occurs buying and selling of mortgage loans. In the secondary mortgage market there is only resale of mortgages, no mortgages are originated in these markets.

The secondary mortgage market allows banks to sell mortgage. The market funds the banks to offer more mortgages to new borrowers. The selling, trading and buying of existing loans among lenders and investors takes place. This market refers to mortgage loans that are bundled together and sold as securities to investors.