What is an example of a primary market lender?

Mortgage banking companies serve as primary market lenders by focusing on the origination of mortgage loans. They are at the forefront of the lending process, providing direct financing to borrowers who are purchasing homes or refinancing existing mortgages. These companies typically create loans and then often sell these loans on the secondary market to investors or financial institutions after they are originated. By acting directly with consumers, mortgage banking companies facilitate the initial stages of financing for real estate purchases, making them a key component of the primary mortgage market.

Investment banks primarily operate in the secondary market, dealing with the buying and selling of existing securities rather than originating loans. Savings and loan associations, while they do engage in similar activities as mortgage banks, are not exclusively focused on only mortgage lending and may also offer a broader range of savings and loan products. Brokerage firms typically focus on investment products and do not engage in the direct lending of mortgage funds, positioning them outside of the primary lending activities. Thus, mortgage banking companies clearly fit the role of primary market lenders due to their direct involvement in lending to borrowers for real estate financing.