Meltdown: A Brave New World
Commercial real estate owners-and homeowners-are justifiably concerned about the condition of the mortgage industry. The myriad of news stories about the sub-prime mortgage debacle and the ensuing financial crisis beg the following questions: How did we get here? What's
Mortgage and Rate Primer
The mortgage and lending industries contain principal elements that often move in tandem with each other. Below is a glossary explaining some of the terms:
Discount Rate - The interest rate charged by the Federal Reserve for short-term loans to member banks. The Fed can raise or lower this rate.
Federal Funds Rate - The interest rate banks charge each other for the use of Federal Funds (funds deposited by commercial banks at Federal Reserve Banks). It changes daily and is a sensitive indicator of general interest rate trends. The Fed can also raise or lower this rate.
Prime Lending Rate - The lending rate banks charge cr…