Cost of Funds Index Has Record Increase

There was a record increase in the Eleventh Federal Home Loan Bank District Cost of Funds Index between October and November, wiping out all of the decline which had taken place since February. According to the Federal Home Loan Bank of San Francisco, the Index for November was 2.094%, up approximately 84 basis points from October's 1.259%, which is COFI's all time low point. The previous record increase in COFI, which has been issued every month since July 1981 and is used as an index for adjustable rate mortgages, was 51 basis points between May and June 1982, according to data on the FHLB-SF website. February 2009 was the last time COFI was above the 2% mark, at 2.003%. FHLB-SF calculated the weighted-average Index using total average funds of $38.5 billion and total interest expense of $67.2 million. There were 25 institutions that reported data for the COFI calculation, which is the cost of funds used by those institutions to originate mortgage loans.