Disintermediation

Definition: The movement of funds away from financial intermediaries toward direct investments or other alternatives, potentially reducing intermediaries' available funding.

Example

Savers move money from deposit accounts into directly held securities offering a more attractive return.

Keep the distinction clear

The term describes a funding shift, not simply withdrawing cash for a purchase. Its effect on mortgage credit depends on the institutions and replacement funding available.

Related terms

Intermediation · Demand Deposit · Primary Lender

Keep studying

Primary and Secondary Mortgage Markets: Fannie Mae, Freddie Mac, and Ginnie Mae

References: FREC Course II syllabus: investment concepts · California DRE: real estate glossary

Pronunciation (US): dis-in-ter-mee-dee-AY-shun (capitals show stress)

Pronunciation reference: Merriam-Webster