Homeowners Refinance Into Bigger Mortgages

Housing prices may be falling, but that's not stopping consumers from using their homes as piggybanks.

Nearly three-quarters, or 73%, of borrowers with mortgages backed by Fannie Mae (FMR Quote) who refinanced in the first quarter took out bigger loans, cashing out some of the appreciation in the price of their homes.

That was down slightly from the fourth quarter and not far from recent highs. Fannie says cash-out refinancing activity peaked in the second quarter of last year at 82%.

The story is similar at Freddie Mac(FRE Quote), where 82% of borrowers who refinanced in the first quarter increased the size of their mortgages by at least 5%. That figure was unchanged from the fourth quarter of last year. ...