What term is used when mortgage bankers bundle loans and sell them to the secondary market?

The correct term for the process in which mortgage bankers bundle loans and sell them to the secondary market is actually referred to as "securitization." This term encapsulates the practice of aggregating multiple loan packages, which are then converted into securities that can be sold to investors, effectively providing liquidity to the mortgage market.

While "Intermediary Funding" might suggest a role in the process, it does not accurately describe the loan bundling and selling action that characterizes securitization. Other options such as "Debt Consolidation," "Loan Servicing," and "Portfolio Management" pertain to different processes within the finance and mortgage sectors. Debt consolidation refers to merging multiple debts into a single loan, loan servicing deals with managing the day-to-day processing of a loan, and portfolio management involves overseeing a collection of investments. Each of these terms has a distinct function, separate from the concept of bundling and selling loans in the secondary market.

Understanding securitization is critical for grasping how mortgage-backed securities function, which plays a significant role in the overall availability of mortgage funding and the operation of the real estate market.