Anytime the bills got too big, they just refinanced and took cash out or borrowed on an equity loan. Who made the most with interest and fees? The banks.

Who made the most money on these loans? Yes, the banks. The house owners failed to care about the fees the banks charged or the closing costs. The only thing they looked at was the giant fat quantity of money they could pull out and spend - as though it were the lottery. Who profited big? The banks.

As times were good and home values gradually increased, another segment of the housing market developed. In times of affluence, normal folks became investors, buying homes and apartments to offer as rental property. This is a clever way to economize on taxes and serve those who can't afford to buy their own home, by providing a pleasant place to live for a reasonable monthly lease. The other advantage, naturally, was the appreciation on the property and having somebody else help you pay the mortgage on the loan. The problem, however, was that lots of the money they used to invest, came from home equity loans that they had taken out on their primary residences. The banks made this less complicated by providing "second mortgages", with high fees of course, and added prepayment fees and penalties to guarantee they made a high profit, in any case of the life of the loan and with 2nd mortgages, you might purchase a second or third or fourth house or apartment with very little down.