By originating loans, Dynex saves money because it does not have to buy mortgages in the secondary market.

The corporation buys mortgages from lenders and resells them as securities.

When the companies borrow to buy and hold mortgages, it does nothing to reduce mortgage rates.

They do so by buying mortgages whose coupon rates are lower than prevailing rates.

But when interest rates started dropping two years ago, more people were buying houses or refinancing mortgages, and the thrift institutions couldn't keep up.

These agencies buy mortgages from financial institutions.

Its willingness to buy mortgages from banks essentially created the basis for the 30-year fixed rate mortgage that is the standard today.

It buys mortgages from lenders, holding on to some while packaging others for sale to investors.

The company buys mortgages from local lenders and sets patterns for the industry.

But Fannie Mae has been reluctant to buy such unconventional mortgages.