New data from the government-sponsored enterprises (GSEs) suggests that mortgage refinance activity was as significant a contributor to the housing crisis as risky mortgage products. Urban Wire contributor Laurie Goodman notes that at the height of the boom, mortgage refinances were more likely to default than mortgages taken out to purchase a home, mostly because many people were treating their homes as ATMs through cash-out refinances. In 2006 and 2007, 84 percent of GSE refis were cash-out refinances that suffered from sloppier underwriting.
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