One index used in calculating periodic adjustments to variable rate loans continued its historic run in 2003.
The Cost of Funds Index, popularly known as COFI, fell 9 basis points from the prior month to 1.821%, the Federal Home Loan Bank (FHLB) of San Francisco reported today. The latest index reflects actual interest expense of $608.3 million on average total funds of $400.8 billion for member institutions headquartered in Arizona, California, and Nevada.
November's COFI is the lowest ever reported by MortgageDaily.com, according to the numbers announced by the 11th District FHLB. The government sponsored enterprise, which is owned by its member institutions, reports the index about 30 days following the end of each month.
COFI adjustable rate mortgages compete with 1-year Treasury-indexed loans -- which averaged 3.72% in Freddie Mac's most recent weekly survey. ARMs, as they are commonly known, have risen in popularity since fixed rates bottomed out last June -- more than doubling their share of applications, according to the Mortgage Bankers Association of America.