The Role of the Secondary Market in Mortgage Financing in Housing

BPC Action believes that while housing is one of the major drivers of the U.S. economy, current federal housing policy is ill-equipped to respond to the many housing challenges facing the U.S. today. We support reforming our broken housing finance system and creating a healthy, stable, and affordable housing market in order to ensure a strong economy and a globally competitive country.   The following information is from the Bipartisan Policy Center, our 501 (c)(3) affiliate. 

The secondary market for mortgages plays a critical role in sustaining a healthy housing market. Few homebuyers have sufficient savings to purchase a home outright, and many need to borrow money to buy their first home or to move to another one. Without the ability to borrow against the value of the home they are purchasing, many prospective buyers would be shut out of the market.

The secondary market allows participants in our mortgage system to access capital from investors in the United States and around the world. Any decline in the size of the secondary market would reduce the amount of capital available for mortgage lending and, in turn, borrowers’ options for financing the purchase of a home.

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