My understanding is mortgage lenders mostly originate loans. The use their line of credit to offer (mostly) conforming mortgages, doing the paperwork, underwriting, and closing.
Then the mortgage is quickly sold off, the money recouped, so they can go and originate another mortgage.
At any given time, they hold a very small fraction of all the mortgages they might originate in a years (in this example $10B at year).
Then the mortgage is quickly sold off, the money recouped, so they can go and originate another mortgage.
At any given time, they hold a very small fraction of all the mortgages they might originate in a years (in this example $10B at year).