Opinion Piece | The U.S. mortgage-backed securities famous JPMorgan Chase CEO, Jamie Dimon, railed against mortgage regulations during the bank’s second-quarter earnings call earlier this month. He indicated the reason mortgage rates aren’t 1.6 percent or 1.8 percent “is because the cost of servicing and origination is so high due to the enormous number of rules and regulations [that] are put in place [which] do not create safety and soundness.” He was obviously referring to The Dodd-Frank Wall Street Reform and Consumer Protection Act, the massive piece of financial reform legislation passed as a response to the financial crisis of 2008 that just hit its 10-year anniversary. Dodd-Frank established a number of new government agencies tasked with overseeing the various components and aspects of the financial system that were believed to have caused the 2008 financial crisis, including banks, mortgage lenders, and credit rating agencies. The U.S. adopted an unprecedented volume of the new regulations outlined in the Act over the last decade, affecting everything from market structure to capital standards and balance sheet liquidity.
Mortgage interest rates are at historic lows for the past several years and it’s all over the news. When you shop and get loan estimates from several mortgage lenders, you’ll come across two important figures that are both expressed in percentages: mortgage interest rate and annual percentage rate (APR). Understanding the difference between the two can help you make better decisions when choosing between buying a home or refinancing.