What has been done to alleviate the liquidity crisis?
The Federal Reserve has taken significant action in the last few weeks due to the liquidity crisis. In an unexpected move on August 17, 2007, the Federal Reserve cut the discount rate.
The discount rate is the interest rate charged to commercial banks and other depository institutions on the loans they receive from their regional Federal Reserve Bank’s lending facility. The Fed’s decision to cut this rate provides stability to financial markets by supplying access to short-term cash.
It’s important to note that the discount rate is different than the Fed Funds Rate, which directly impacts interest rates that you pay for Home Equity Lines of Credit, credit cards, and automobile loans. Most importantly, the discount window rate cut does not directly impact mortgage rates.
The Federal Reserve Committee will meet again on September 18th and speculators predict that further action will be taken to alleviate the liquidity crisis. In the meantime, the borrowers will continue to see market volatility and tightening mortgage requirements.
If you are in an ongoing real estate transaction, I would encourage you to contact me as soon as possible. As a local mortgage professional with a financial planning background, I have the knowledge and resources to help you navigate through these turbulent times. For up-to-date information on the Incline Village mortgage market, call Marc today at 1.877.LakeLoan. |
