Primary, Secondary, and TBA Mortgage Markets

Primary, Secondary, and TBA Mortgage Markets traces mortgage finance from creation of a borrower loan to institutional funding and agency MBS trading.

Start with the primary market for origination and borrower pricing. Move to the secondary market for loan sales and securitization, then use the TBA and specified-pool pages for agency MBS execution.

What This Branch Covers

Market Flow

1. A borrower obtains a newly originated mortgage in the primary market.
2. The lender may retain the loan or sell it in the secondary market.
3. Eligible loans may be pooled into agency or private-label MBS.
4. Eligible agency pass-through exposure can trade through standardized TBA contracts.
5. Named pools can trade separately when collateral characteristics have pool-specific value.

Common Mistakes

• Confusing borrower origination with MBS issuance.
• Assuming a loan sale automatically transfers servicing or every contractual exposure.
• Treating TBA as a trade with unknown price or coupon.
• Assuming TBA and specified-pool execution have the same delivery option.
• Treating agency payment support as protection against rate, prepayment, or market-price risk.
• Ignoring factors, current face, margin, and settlement controls.

Mortgage-market content is educational and does not provide mortgage, investment, trading, hedging, tax, legal, accounting, or settlement advice.

In this section

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