Just when it seemed that the Cost of Funds Index couldn’t move any lower, another record was established. But COFI isn’t the only index hovering near zero altitude.
COFI, which is used to determine changes to interest rates and payments on some adjustable-rate mortgages, landed at 0.682 percent in April.
That was the lowest the index has ever been since at least July 1981 based on the oldest available historical data.
COFI is announced monthly by the Federal Home Loan Bank of San Francisco based on interest expenses reported by 11th District members, which are based in Arizona, California and Nevada. During April $14.3 billion in average total funds were used in the calculation.
In March, COFIÂ was 0.701 percent — a record low at the time.
The index was 0.970 percent in April 2013.
COFI is used as an index on some ARMs, such as many originated prior to 2008 by World Savings, which was acquired by Wachovia Corp. Those loans are now owned by Wells Fargo & Co. following its 2008 acquisition of Wachovia.
However, a far more utilized ARM index is the yield on the one-year Treasury.
Data provided by the Department of the Treasury indicate that the one-year Treasury yield fell to 0.11 percent as of the end of April from 0.13 percent at the end of May.
The one-year yield fell an additional basis point as of the end of May.
Ellie Mae reported that ARMs accounted for 7.6 percent of all originations in April, a slightly bigger share than 7.4 percent in March.
