The Eleventh Federal Home Loan Cost of Funds Index fell 15 basis points in October to its lowest level since April.According to the Federal Home Loan Bank of San Francisco, which calculates the index, COFI stood at 4.233% in October, compared with 4.383% in September. In April, the index fell by 7 bps to 4.224%, but gave back all of that in May. The index fell slightly in June and July, but in August shot back up to 4.359%. According to information on the FHLBank's website, this is the first double-digit decline in COFI since November and December of 2002, though there have been a couple of instances since then of declines of over 9 bps. The index is a weighted average of the cost of mortgage funding for the member thrifts of the San Francisco FHLBank. Because it takes these costs into consideration over a period of several months, the movement of COFI tends to lag movements in other rates by three to six months.

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