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. (OTCPK:FREJO) 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 (NYSE:FRE)'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.