Which is NOT a function of the secondary markets?

The correct answer is that the function that does not align with the purpose of the secondary markets is serving as a depository for consumer assets. The secondary mortgage market primarily facilitates the buying and selling of mortgage loans and mortgage-backed securities, improving liquidity for lenders and allowing them to free up capital to issue new loans.

In contrast to the role of a depository institution, which holds consumers' deposits and provides various financial products, secondary markets focus on the trading of existing loans. Their main functions involve moderating the effects of local real estate markets by pooling and distributing risk among various investors, creating cycles that provide lenders with funds for more lending, and standardizing underwriting guidelines to enhance efficiency and reduce risks across the market. Thus, while secondary markets are critical to the functioning of the mortgage industry, they do not serve as a place for consumers to deposit their assets.