High-interest borrowers in negative equity are refinancing – or prepaying out of their bonds – at a rate four times higher than at the end of last year, according to Lender Processing Services (LPS).

Analysts looked at a group of Fannie Mae and Freddie Mac mortgages originated in 2006 with interest rates of 6% and now have loan-to-value ratios between 100% and 125%. The annualized prepayment rate on this vintage increased to 40% as of June 2012 from 10% six months earlier.

"Our data also shows that this rise in loan activity extends beyond that subsection – the same type of increase holds true across other vintages with the same characteristics," said Herb Blecher, senior vice president for LPS Analytics.

The boom comes from an expanded Home Affordable Refinance Program. The Federal Housing Finance Agency eased some restrictions on HARP last year, and lenders put the new guidelines in place in March.

Lenders, led by the largest banks, refinanced nearly 423,000 Fannie and Freddie mortgages under HARP in the first six months of 2012, more than all of last year, according to the FHFA.

More severely underwater borrowers took advantage of the program as well. More than 53,000 home loans above 125% LTV refinanced under HARP in June, up from less than 3,000 just the month before, the FHFA said.