Secondary Market Financing
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Official definition
This U.S. industry comprises establishments primarily engaged in buying, pooling, and repackaging loans for sale to others on the secondary market.
Source: US Census Bureau, 2017 NAICS Definitions. Public domain.
Illustrative examples
- Federal Home Loan Mortgage Corporation (FHLMC)
- Government National Mortgage Association (GNMA)
- Federal National Mortgage Association (FNMA)
- Student Loan Marketing Association (SLMA)
Which code does this activity belong in?
Secondary Market Financing comprises establishments that buy, pool, and repackage existing loans for resale to investors, rather than originating loans themselves. This activity differs fundamentally from Consumer Lending, which originates unsecured cash loans directly to borrowers, and from Real Estate Credit, which originates mortgage loans secured by real estate. Establishments engaged in the initial origination of loans, whether to consumers or for real estate collateral, are classified in those respective codes; only those engaged in purchasing and repackaging already-originated loans belong in Secondary Market Financing.