Topic 3 Overview of Real Estate Finance

Real estate finance provides for the procurement and use or funds in regards to real estate. The finance aspect of real estate can be used to determine value such as with the discounted cash flow for the income approach or can be used to determine the solvency of a borrower. Some of the major employers of real esate finance are mortgage associations and lending institutions. Some of the trade organizations include Real Estate Finance Association (REFA).

http://www.youtube.com/watch?v=gi2uH3YxohU
This video even though it is a little long is a great clip that clearly and vigorously illustrates the vulnerability of the financial system to crisis. The narrator describes how the crisis of the financial system is so easily thrown off by the deeds of the real estate sector of finance.

http://www.springerlink.com/content/rk4q0p4475vr3473/
This article attacks the institution of real estate finance by showing how the use of foreclosures bring a community down. The author seems to see that even though the home owner cant pay their mortgage it is not their fault. well it is. We can agree though that the fact that the community suffers from foreclosures is true but the cause can be seen more macro-scopically. If an area is suffering economically, it can be seen by the rate of foreclosures.