Follow the questions no

Questions: 1. 'Define' the Primary Mortgage Market, give some examples . Borrowers get their initial mortgage loans from conventional lending institutions in the primary mortgage market. In this sector, borrowers negotiate loan conditions with financial organizations such as commercial banks, credit unions, and mortgage companies. Key mortgage market participants include financial organizations such as Wells Fargo and credit unions such as Navy Federal Credit Union. These financial institutions play an essential role in the mortgage industry since they are in charge of loan origination, underwriting, and financing. 2. 'Name' and 'Describe' the Direct (Institutional) and Indirect (Non-institutional) Lenders, and give some examples . The two primary categories of mortgage financiers are direct (institutional) and indirect (non- institutional) lenders. Direct lenders are traditional banks that handle the whole mortgage process, including application processing, underwriting, and funding. The government governs these organizations. Financial institutions such as credit unions and central commercial banks are examples of direct lenders. In contrast, indirect lenders, who are increasingly active in the internet domain or via brokers, assist in connecting borrowers and lenders but do not necessarily back loans directly. Mortgage brokers are among them; many can be found on websites such as LendingTree and Zillow Home Loans. Online mortgage lenders such as Quicken Loans (Rocket Mortgage) and SoFi act as indirect lenders by offering more straightforward online mortgage services. 3. 'Explain' the term Disintermediation and why it has been happening for years now.
Borrowers may now go directly to the financial markets to get loans or financial services, a technique known as "disintermediation." For various causes, this pattern has lasted for an extended period. Thanks to technology improvements, borrowers may now communicate with investors or lenders through online lending platforms and fintech enterprises. Borrowers now have greater power due to the availability of data on various financing possibilities. Some borrowers abandon banks in favor of non-bank lenders because of the better conditions they provide, such as cheaper interest rates and faster approval processes. Traditional intermediaries are no longer required since investors seeking higher returns have started to lend directly. 4. 'Differentiate' between a conforming loan and a portfolio loan. Conforming and portfolio loans are two unique forms of mortgages, each with its functions and characteristics in the business. A loan must "conform" to GSE requirements to be acquired by Fannie Mae and Freddie Mac. Because they meet industry requirements, these loans are eligible for sale on the secondary mortgage market. As a result, conforming loan interest rates are more competitive. On the other hand, portfolio loans are not insured by the government and are retained by the original lender. Lenders assume the credit risk connected with these loans since they cannot be sold on the secondary market; hence, the terms are often more lenient. When a borrower's personal or corporate finances do not suit the traditional mortgage profile, they may consider a portfolio loan. 5. 'Discuss' a Real Estate Investment Trust (REIT) and give some examples . Investors may utilize Real Estate Investment Trusts (REITs) to invest in real estate that provides income without ownership and management responsibilities. Real estate investment trusts (REITs) are available in several forms, including pure equity REITs, mortgage REITs (mREITs),
and hybrids. Equity REITs primarily oversee commercial real estate asset ownership and management. Equity REITs may be found in the Simon Property Group and AvalonBay Communities. On the other hand, mortgage real estate investment trusts (mREITs) are financial organizations that earn from the interest on mortgage loans and mortgage-backed securities. Two significant mREITs are Annaly Capital Management, and AGNC Investment Corp. Real estate investment trusts (REITs) provide investors with diversification in the real estate sector and high dividend distributions. They may be purchased and traded on stock exchanges, giving investors access to a liquid market for real estate investments.
Uploaded by CorporalElephantPerson907 on