Which market is responsible for the buying and selling of existing mortgages?

The secondary market is responsible for the buying and selling of existing mortgages. This market functions as a platform where investors can purchase mortgages that have already been originated and are being serviced by financial institutions. By allowing existing loans to be bought and sold, the secondary market helps to provide liquidity and stability to the mortgage market, as lenders can sell their mortgages to free up capital and reinvest in new loans.

In contrast, the primary market is where loans are initially created and originated between borrowers and lenders. The correspondence market, while it may refer to certain practices related to the origination and processing of loans, does not specifically denote the trading of existing mortgages. The tertiary market is not a commonly recognized term in the context of mortgage trading, and thus does not have a defined role in this scenario. Being well-versed in these distinctions is crucial for understanding how the mortgage market operates and the flow of capital within it.