The Eleventh Federal Home District Loan Cost of Funds reached another new low as it fell by over two basis points between August and September.The new index is 1.923%, as compiled by the Federal Home Loan Bank of San Francisco as a weighted average of the cost of mortgage origination money for its members in Arizona, California and Nevada. In August, the index was 1.946%, the first time ever the index had been below the 2% mark. Since one source of mortgage money for banks and thrifts is deposits, some trends may be discerned from looking at those interest rates. While there was little or no drop in the rates on the one month, three month and six month certificates of deposit between April and May (six months ago, the long end of the typical lag between rates and COFI), a huge drop took place between May and June (nearly 20 basis points in all three), according to data compiled by the Federal Reserve Bank of St. Louis. The rates then rebounded slightly the rest of the summer but between August and September remained unchanged in all three categories.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry