Which entities are included in the primary mortgage market?

The primary mortgage market consists of institutions and entities that originate mortgage loans directly to borrowers. By focusing on commercial banks and mortgage loan originators, we can see how these entities are critical to this market.

Commercial banks play a significant role in the primary mortgage market as they provide funds directly to consumers seeking mortgages. They evaluate the creditworthiness of borrowers, process applications, and ultimately fund the loans. This direct involvement places them squarely in the primary market.

Mortgage loan originators, including brokers and lenders, also operate within this market. They facilitate the process of securing a mortgage by connecting borrowers with lenders, assisting with the application process, and guiding borrowers through the mortgage options that best suit their needs. Their function is vital for ensuring that borrowers can access the financing necessary to purchase homes.

In contrast, other entities listed, such as credit unions, real estate investment trusts, and investment banks, have different roles in the broader mortgage ecosystem. While credit unions do provide mortgages to their members, they are typically considered secondary in nature relative to the broader range of commercial banks and loan originators. Real estate investment trusts focus on property investment rather than direct lending, and investment banks are involved more in the securitization and secondary mortgage market rather than in originating loans