Freddie: Cash-Out Refi % Rises

In the first quarter, 64% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, up from 56% in the previous quarter, according to Freddie Mac.The percentage was much higher than the 42% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "The first quarter had record home sales and single-family housing starts and a lot of refinancing activity," said Frank Nothaft, Freddie Mac's chief economist. "The share of borrowers who decided to cash out some home equity as part of their refinance increased too, which helped prop up consumer spending on home improvements even though total consumer expenditures grew more slowly." Freddie Mac can be found online at http://www.freddiemac.com.