What is the primary role of the primary mortgage market?

The primary mortgage market's main function is to create new loans between borrowers and lenders. This market facilitates direct transactions where lenders such as banks, credit unions, and mortgage companies provide funds to borrowers seeking to purchase or refinance real estate. In this process, the lender evaluates the borrower's creditworthiness and ability to repay the loan, sets the terms of the mortgage, and funds the loan directly to the borrower.

This role is crucial because it establishes the first step in the mortgage financing process, allowing individuals and companies to access the necessary capital to acquire property. Once these loans are originated, they can be sold on the secondary mortgage market to investors, but that aspect pertains to a different market entirely. Therefore, the primary mortgage market primarily focuses on creating and servicing those initial loan agreements.

The other options relate to other functions or segments of the real estate and mortgage financing landscape but do not accurately describe the foundational role of the primary mortgage market.