Selling mortgages: Explain why some financial institutions prefer to sell the mortgages than to originate? Textbook Financial Markets and Institutions 11 edititon Solution Answer : The Financial Institution can sell their mortgage if they expect that interest rates in the market is going to increase or they wish to increase their liquidity and they do not hav the long-term funding needed to hold them permanent Mortgage companies sell mortgage after they are originated and continue to service them .They do not have sufficient fund to maintain all the mortgages they have originatted.