The questions stems from the knowledge that mortgages are sold. So, I get a mortgage from finanicial institution XYZ. That institution turns around and sells the mortgage to Fannie Mae, Freddie Mac or some other larger financial institution. So, my question is: “where did XYZ’s profits come from?” Does XYZ only make money on the fees they charge the original lender? Or does XYZ borrow the money at 1% (for example), sell it to a borrower at 6%, and they sell it on the secondary market at 4%. So their profit is that 2% difference between the 6 & 4? I just see these “mom & pop” mortgage lenders (not just brokers) poping up. What’s their incentive and how do they make money?