Hopes that the Eleventh Federal Home Loan District Cost of Funds Index would start a prolonged decline have been put on hold for at least one month.The index, as calculated by the Federal Home Loan Bank of San Francisco, rose slightly over 1 basis point, from 4.346% in October to 4.358% in November. A decline in October ended a period of increases that began in May 2004. This newest increase is still below the peak set in September of 4.382%. What makes COFI a "lagging index" is that it is a weighted average calculation of the cost of mortgage lending money for member thrifts of the FHLBank-SF and therefore includes rate scenarios across a period of several months. Given that other rates have stabilized over the last half of 2006, it is possible that this rise in COFI is just a blip. The FHLBank can be found online at http://www.fhlbsf.com.

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