Equity cash out at 4-year low, lender says

WASHINGTON, May 2 (UPI) -- Home equity cashed out during refinancing, in the first quarter, dropped to the lowest level in four years, a report issued Friday said.

The Federal Home Loan Mortgage Corp. deputy chief Amy Crews Cutts said the $29 billion in home equity cashed out was a drop from the fourth quarter 2007 figure of $36 billion and about one-third of the level from a year ago.

Frank Nothaft, Freddie Mac's chief economist, said tighter underwriting standards and falling home values combined to reduce equity conversions.

"While equity conversion is down, regular refinance activity has stepped up," Nothaft said.

Fixed-rate mortgages hit four-year lows in the quarter, which prompted "large volumes of refinancing," he said.