COFI Bounces

Index rises from historic low to 1.841%
By MortgageDaily.com staff
4/1/2004

The 11th district cost of funds index continued its seesaw mode, rising from a 23-year historic low. The increase follows last week's report of a record low 1-year Treasury-indexed ARM average.

COFI, as it is widely known, increased to 1.841% in February -- 3 basis points higher than the previous month's record low, according to the Federal Home Loan Bank of San Francisco. A year ago the figure, which is used as the index for some adjustable rate mortgage (ARM) programs, stood at 2.257%.

COFI is reported about 30 days following the end of each month and reflects deposit and financing costs during a given month by all savings institution members headquartered in Arizona, California, and Nevada. For February, the average total funds for these institutions used in the calculation of the index was $407.0 billion, up slightly from $405.1 billion the prior month.

Last week, Freddie Mac said the one-year Treasury-indexed ARM average was at its lowest level in 20 years at 3.36%. The 1-year Treasury competes with COFI as indices for ARMs -- which currently account for more than a quarter of all originations.

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