Freddie Mac recently released its quarterly report on cash-out refinancings. During the second quarter, 39% of Freddie Mac-owned loans were refinanced into new mortgages at least 5 percent higher than the original mortgages. This compares with 42% during the first quarter of 2004. The total equity cashed out during the second quarter was $20 billion, said Freddie, down slightly from $23 billion in the first quarter.

The decline is attributed to the increase in mortgage rates which reduced the refinancing share of mortgage applications, stated Freddie Mac Chief Economist Amy Crews Cutts. She said Freddie Mac expects the overall refinancing share to decline further in the second half of the year to between 30% and 35%. "Cash-out refis will make up a larger share of those third- and fourth-quarter refinancings because most homeowners have already refinanced into very low-rate mortgages over the past year," Crews Cutts added.

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