The Cost of Funds Index, already in a free fall, still has not found a bottom. A record COFI, however, wasn’t enough to revive the ailing adjustable-rate share.
In October, the 11th District index was 1.011 percent. It was the lowest level on record.
COFI fell from the record 1.038 percent established in September. It also retreated from the then-record low 1.218 percent set in October a year prior.
COFI is reported by the Federal Home Loan Bank of San Francisco based on the interest expenses of its member banks based in Arizona, California and Nevada. October’s average total funds used in the COFI calculation came out to $34.4 billion, up from $33.9 billion a month earlier.
Interest rates and monthly payments on some adjustable-rate mortgages move based on changes in COFI.
Many more ARMS, however, are tied to the one-year Treasury yield, which inched up to 0.18 percent at the end of October from 0.17 percent at the end of September, according to Treasury Department data. The one-year yield finished November at 0.18 percent.
ARMs accounted for 2.2 percent of the latest activity in the U.S. Mortgage Market Index report from Mortech Inc. and Mortgage Daily for the week ended Nov 30, slimmer than the 2.4 percent share in the previous report.
