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Freddie Mac cash-outs at 4-year low

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The percentage of borrowers taking cash out of their homes when refinancing this year is at a low not seen in four years, at least among loans owned by Freddie Mac, the mortgage financier said. Some 78 percent of refinance loans in the third quarter were cash-outs, Freddie Mac said, compared with 86 percent a year ago. For the first nine months of the year, the share of loans involving a cash-out was 63 percent -- the lowest level since 2004. Some $30 billion in home equity was cashed out through refinance of conventional loans made to prime borrowers, down from $40 billion in the previous quarter, said Amy Crews Cutts, Freddie Mac deputy chief economist. During the first nine months of 2008, about $99 billion in home equity was cashed out -- about half as much as the same period last year, Crews Cutts said. If homeowners are having a harder time extracting the equity from their homes, that could prolong an economic recovery. A new study by economists at the USC Lusk Cen...