The quarterly share of refinances that included cashout increased, though the dollar volume decreased.
During the second quarter, two-thirds of refinances included cashout, Freddie Mac reported in its quarterly refinance review.
Freddie based its findings on loans that it successively funded twice, with the refinance resulting in a loan balance that was at least 5 percent higher.
The share of cashouts rose from a revised 58 percent in the first quarter but tumbled from 83% during the second quarter 2007.
The level of activity worked out to around $38 billion in extracted equity -- "less than one-half the $79 billion cashed out during the same period in 2007."
The report indicated that 9 percent of borrowers who refinanced reduced their balance. Freddie Chief Economist Frank Nothaft speculated the level of "cash-in," which reached a three-year high, was likely the result of tighter underwriting that forced borrowers to pay down their loan balances in order to qualify for the period's more favorable loan rates and terms.
Nothaft also noted that the time between the original loan and the refinance stretched 10 months from the prior quarter to around 38 months. The additional seasoning pushed loan-to-values lower with some appreciation having occurred in 2005 along with the additional principal paydown.