In the second quarter of the year, 66 percent of Freddie Mac (NYSE:FRE)-owned loans were refinanced for new loans worth at least 5 percent more than the original loan, Freddie Mac said.

The percentage was higher than the revised figure of 58 percent for the first quarter and contributed to a total of $38 billion in equity cashed-out refinancing for the first half of the year.

The figure compares to $79 billion for the first half of 2007, Amy Crews Cutts, Freddie Mac deputy chief economist said in a statement.

Cashed-out refinancing refers to negotiating a new loan for a higher amount owed on the original loan with the borrower pocketing the difference.

Falling home values "have curtailed the amount of home equity available to be cashed out by homeowners," said Frank Nothaft, Freddie Mac vice president and chief economist.

Nine percent of homeowners refinanced and reduced their loan amounts in the first half of the year, "the largest cash-in share since the summer of 2005," Nothaft said.

"This may reflect more cautious underwriting by lenders," he said.