What must be done to create a secondary (securitized) market for loans/ mortgages?
A secondary market requires a critical mass of primary loans/mortgages. Securitization of any significance can happen only after there is a powerful primary mortgage market supplying standardized, seasoned loan contracts for bundling. Without standardization and scale — meaning a large primary market secondary buyers will be difficult if not impossible to find, and the bundled loans sellable only at a substantial discount if at all.
Related Questions
- I am an indirect lender — I do not open accounts directly with a consumer but purchase loans in the secondary market. Am I required to have a Program?
- Should the agent perform due diligence with respect to assignees purchasing loans in the secondary market?
- Should "table funded" loans be reported as loans sold in the secondary market?
