Final answer:
The normal procedure for a primary lender when they have used all their funds for home mortgages is to sell some of the loans in the secondary loan market.
Step-by-step explanation:
When a primary lender uses all its funds for home mortgages and ends up with a number of notes and mortgages, the normal procedure is to sell some of the loans they make in the secondary loan market. With the sale of these loans, the lender can recoup some of the funds that were used for mortgages and replenish their funds for further lending activities. Selling the loans allows the lender to reduce their risk exposure and diversify their loan portfolio.