Eleventh District COFI Posts Very Small Increase in April


The Eleventh Federal Home Loan District Cost of Funds Index gained 0.3 basis points in April, which while being very slight, still means the index has increased in three of the last five months.

The index now stands at 0.97%. Marchs index of 0.967% was the second lowest point in its history, 0.5 basis points above Januarys 0.962%. In April 2012, the index was 1.14%.

For comparative purposes, the monthly average rate on the 30-year fixed-rate mortgage according to Freddie Macs Primary Mortgage Market Survey for April was 3.45%, a drop of 12 basis points from March. However, for May, the average rose nine basis points to 3.54% and since the start of the year it is up 13 basis points. The May 30 survey release has the 30-year FRM at 3.81%.

COFI is a weighted average calculation of the funds used by thrift members of the Federal Home Loan Bank of San Francisco to originate mortgage loans. It is used by some lenders to set the interest on adjustable rate mortgages because it tends to lag movements in other rates.

There were 16 institutions that reported data for April. The average total funds was $34.5 billion (of which deposits made up $28.4 billion), while the total interest expense was $27.6 million. In March, the average total funds was $34.2 billion and total interest expense was $27.9 million.

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