Which mortgage market involves lending institutions that lend directly to consumers?

The primary market is where lending institutions, such as banks and credit unions, directly provide funds to consumers looking to purchase or refinance real estate. In this market, borrowers interact with lenders to negotiate loan terms, secure financing, and complete transactions. This direct lending relationship enables consumers to obtain mortgages tailored to their individual financial situations and needs.

In contrast, the secondary market involves the buying and selling of existing mortgage loans and securities, typically among institutional investors, without the involvement of end consumers. The tertiary market is less commonly referenced, focusing on investment opportunities linked to real estate not typically seen in consumer transactions. The over-the-counter market primarily deals with securities that are traded outside of a centralized exchange, which does not include direct consumer lending.

Therefore, the primary market is distinctively characterized by the direct lending relationship between consumers and institutions, making it the correct context for this question about mortgage lending.