Let’s be clear: anyone who has bought or owned a home over the past twenty years won the interest rate lottery. After peaking at 18.45% in 1982, the height of the so-called Reagan Recession, mortgage rates steadily tumbled to the single digits before dipping under 7% after 9/11, then more than halved to under 3% in 2021. Unsurprisingly, home prices have soared, with only a hiccup during the 2008-9 financial crisis. Lucky homeowners cashed out cheap equity in droves and paid off higher-cost debts or bought more stuff, including second homes.
Yet, homebuyers and homeowners found that taking advantage of the dip in mortgage rates did not prevent them from falling victim to exorbitant – and sometimes fraudulent – fees and charges that significantly increased the costs of their mortgages and refis. In other words, they were far from the only ones taking advantage of the Fed-induced real-estate windfall.
