Industry News

Refinancing homeowners cash out less equity in Q3

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About 87 percent of Freddie Mac-owned loans that were refinanced during the third quarter resulted in new mortgages with loan amounts at least 5 percent higher than the original mortgage balances, according to a quarterly report. That compares with 84 percent in the second quarter and 88 percent in third-quarter 2007. About 5 percent of refinances during the third quarter resulted in a lower loan amount -- the same percentage recorded in the second quarter and in third-quarter 2006. The percentage of refinances that resulted in a 5 percent or higher new loan amount hit a low of 33 percent in second-quarter 2003. Homeowners cashed out about $60.1 billion in the third quarter, down from about $81.4 billion cashed out in the second quarter, a quarterly drop of about 26.2 percent, according to the Freddie Mac Cash-Out Refinance Report. Cash-out refinancing is the process through which homeowners can take out a new mortgage at an amount that exceeds the balance on the existing m...