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Surprise Record Low for COFI

While other short-term indices have been on the rise lately, the Cost of Funds Index tumbled to an all-time low.

COFI, which is used to determine rate and payment changes on some adjustable-rate mortgages, was 0.659 percent in June.

It was the lowest level ever for the index based on the oldest available data going back to July 1981.

A month earlier, COFI came in at
0.687 percent.

Twelve months earlier, the index was 0.668 percent.

COFI is calculated based on the interest expense of members of the Federal Home Loan Bank of San Francisco, which reported the index Friday.

For the month of June, average total funds used in the calculation
were $16.3 billion.

A far more popular ARM index is the one-year Treasury yield, which
climbed to 0.28 percent as of the end of June from 0.26 percent at the end of May, according to the Department of the Treasury.

The one-year yield closed July at
0.33 percent.

Another ARM index, the six-month London Interbank Offered Rate, finished June at
0.44 percent, up from 0.43 percent at the end of May, reported. LIBOR ended July at 0.47 percent.

ARMs accounted for 9.8 percent of all activity in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended July 31.

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