Question 79

A mutual savings bank participates in the primary mortgage market.

A mutual savings bank is a financial institution that accepts deposits and provides loans, primarily for residential mortgages. By lending directly to borrowers, it plays a vital role in the primary mortgage market.

A) a mutual savings bank

This option is correct as a mutual savings bank directly engages in providing mortgage loans to homebuyers. It is a participant in the primary mortgage market, where lenders provide loans to consumers for purchasing homes.

B) Federal Home Loan Bank Board

This option is incorrect because the Federal Home Loan Bank Board primarily functions as a regulatory and oversight body for the Federal Home Loan Banks, which support the secondary mortgage market rather than directly participating in the primary mortgage market.

C) land contract vendors

This option is incorrect as land contract vendors typically engage in selling property through agreements that allow buyers to make payments over time, rather than participating in the mortgage market. They do not provide traditional mortgage loans.

D) The World Bank

This option is incorrect because The World Bank is an international financial institution that provides financial and technical assistance for development projects, but it does not directly participate in the primary mortgage market for residential loans.

Conclusion

A mutual savings bank is definitively the correct answer as it directly engages in lending activities associated with the primary mortgage market. All other options either serve different functions or operate in different contexts, failing to meet the criteria of participation in the primary mortgage market.