In the fourth quarter, 80% of the homeowners who refinanced their homes got a mortgage at least 5% larger than the original loan, up from 73% in the previous quarter, according to Freddie Mac.The percentage was much higher than the 56% level recorded a year earlier, the government-sponsored enterprise said in its quarterly refinance review. "We estimate that home equity extraction from the refinancing of prime first mortgage liens will result in an extraction of $243 billion in 2005," said Frank Nothaft, Freddie Mac's chief economist. "However, equity extraction in 2006 will likely fall sharply, by a little more than half to about $117 billion, as we expect lower refinance activity and slower house price appreciation."

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