Who typically purchases home mortgage loans from originators?

The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, typically purchases home mortgage loans from originators. This organization plays a critical role in the mortgage market by providing liquidity, stability, and affordability to the housing market. By buying loans from lenders, Freddie Mac enables these originators to free up capital, which allows them to issue more loans to consumers.

This process helps to support the overall functioning of the housing economy, making it easier for individuals to obtain mortgages. Freddie Mac also helps to standardize mortgage products, which promotes competitive interest rates and reduces the risk of foreclosure for borrowers.

Other options, such as local banks, private individuals, or state government agencies, do not generally engage in this broad level of purchasing mortgage loans. While local banks may offer mortgage products directly, they typically hold onto those loans or might bundle them for sale to investors, rather than acting as a primary purchaser in the secondary mortgage market like Freddie Mac does.