Business and Finance news

For one day last week, Wednesday, as Wall Street rocked from one financial collapse to another, there was wide fear that credit markets might freeze up entirely; that banks, skittish and burned, would stop lending to each other; and that the flow of money from Wall Street out to the rest of the economy would grind to a halt.

It didn’t happen.

By Thursday morning, the Federal Reserve and other central banks had pumped $180 billion in short-term loans into the global financial system. More came Friday, along with plans for a federal bailout. The interest rate banks charge each other for lending retreated. Stock markets rallied.

And it appears, for now, that a deep financial crisis has been averted.

Still, credit is tight, and will be for the foreseeable future as the big banks unwind themselves out of this mess. So here’s a look at what this crisis on Wall Street could mean out here on Main Street.

HOME MORTGAGES

Credit may be tight, but it’s not necessarily expensive. Despite all the turmoil, rates are still low by historical standards, around 6 percent. But they’ve been gyrating.

Two weeks ago, when the government took over mortgage giants Fannie Mae and Freddie Mac, the average rate on a 30-year fixed-rate mortgage dropped from 6.25 percent to 5.75 in hours.

"That’s almost unthinkable," said Mark Delhougne, associate managing director of The Private Bank in Clayton. "It’s such a huge number to come down in such a short period of time."

In a climate like this, it pays to shop around, and when you find a good rate, get it in writing.

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"It’s a live market," said Ruth Battle, senior vice president with Paramount Mortgage Co instant payday loan. in Creve Coeur. "Just like you’re buying a stock or a bond, it’s when you lock in your rate that those prices are set."

There’s no question that requirements are tighter, both Battle and Delhougne said. Banks want to see verified income, a down payment, a good credit history. But they also want to lend to reliable customers who will pay their bills. And if you are one, there are good deals to be had.

REAL ESTATE DEVELOPMENT

Most expect lending for both commercial and residential projects — already battered by the weak market — to slow further in the short term. There’s just not as much cash to be had, which means deals will take long