After surging more than 80 basis points the prior month, the Cost of Funds Index retreated.
During December, the index was 1.828%, the Federal Home Loan Bank of San Francisco reported Friday. In November COFI was 2.094%, while it was 2.757% in December 2008.
The COFI jumped in November from 1.259% in October. But the FHLB noted that November activity reflected the loss of Wachovia Mortgage, FSB, from the COFI reporting members.
The index is determined based on the interest expenses of FHLB-member banks headquartered in Arizona, California and Nevada. Average total funds were $37.5 billion, lower than November’s $38.5 billion.
Other adjustable-rate mortgage indices include the one-year Treasury-indexed ARM, which finished December at 0.47%, leaping from 0.27% one month earlier. The one-year yield has since retreated, closing at 0.30% yesterday.
The six-month London Interbank Offered Rate, an index widely used on subprime ARMs, was 0.43% as of Dec. 30, lower than 0.49% at the end of November. LIBOR was 0.38% as of Wednesday.
ARMs were selected by 4.7% of the mortgage applicants tracked in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended Jan. 22.
