Step 1Heat the butter in a small saucepan until melted. Add the sugar and water and cook, stirring until the sugar is dissolved. Add the cranberries and vanilla and stir to combine.
Step 2Pour the mixture into a buttered 8-inch square baking dish. Set it aside while preparing the cake batter.
Step 1Heat the oven to 350 degrees. Using an electric mixer, beat the butter until light. Add the brown sugar and beat until blended. Beat in the eggs, one at a time. Add the sour cream, vanilla and orange peel and mix.
Step 2In a small bowl, stir together the flour, baking soda, nutmeg and salt.
Step 3Add the dry ingredients to the butter-sugar mixture and beat until the ingredients are blended and the batter is light, about 2 to 3 minutes.
Step 4Spoon the batter evenly over the cranberry mixture in the baking pan and use the back of the spoon or a spatula to spread it smooth.
Step 5Bake until the cake tests done in the center, about 40 to 45 minutes. Remove the cake from the oven and let it stand 5 minutes, then invert it onto a serving platter. Cool slightly before cutting and serving warm.