Secondary loan market is the market where loans are made to borrowers.
Home loans and servicing rights can be bought and sold between creditors and borrowers in the secondary mortgage market. Lenders who issue newly originated mortgages sell a significant portion of those mortgages into this secondary market, where they are bundled into mortgage-backed securities and sold to investors like hedge funds, pension funds and insurance companies. Because of its size and liquidity, the secondary mortgage market contributes to equal access to credit for all borrowers worldwide.
Loan issuers are able to continue funding new loans because of the secondary mortgage market. Mortgage rates would be substantially higher than they are if this market didn't exist, and most people wouldn't even be able to pay for a home.
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