Real estate exam terms
2 terms, each with a plain definition, the term it is most often confused with, and how the license exam actually asks about it.
Where loans are originated — lender to borrower
Banks, credit unions and mortgage bankers making loans directly to buyers. Most originators do not intend to hold those loans; they intend to sell them, which is what connects this market to the next one.
Straightforwardly contrasted with the secondary market. Origination here, resale there.
Where existing loans are bought and sold between investors
Selling loans on replenishes an originator’s capital so it can lend again, which is the economic point of the whole arrangement. It also means the purchasers’ underwriting standards effectively set what borrowers are offered.
"Second mortgages are originated here" is the standard wrong answer, and it is wrong because a second mortgage is a primary market transaction.
Sitting the license exam? Start with a practice test.
Free practice testIndependent exam preparation. Real Estate Exam Bank is not a state-approved pre-licensing course and completing anything here does not satisfy any state education requirement. Not affiliated with, endorsed by, or authorized by any state real estate commission, Pearson VUE, or PSI. Practice questions here are original study material, not the official exam.