Posted on: 16th Aug, 2009 09:24 am
what is Cost-of-Funds Index (COFI) ?
check this out
http://www.mortgagefit.com/cofi.html
http://www.mortgagefit.com/cofi.html
The Cost of Funds Index (COFI) is one of many indices used with Adjustable Rate Mortgages. The index changes monthly and the margin of the ARM is added to the COFI Index at the designated time to determine the new interest rate for the ARM.
COFI is the cost of funds for the 11th Federal Reserve District which is headquartered in San Francisco. The index is determined by the interest paid on savings accounts, CDs, etc---which is the bank's cost of the funds of savings accounts--for several southwestern states which make up the 11th Federal Reserve District
Normally, and I have never seen otherwise, the COFI Index is associated with ARM mortgages that have potential negative amortization. There are twelve FedearalReserve Districts. The COFI Index became the one used, probably because around 1970 the ARM products started in California before they spread across the United States
COFI is the cost of funds for the 11th Federal Reserve District which is headquartered in San Francisco. The index is determined by the interest paid on savings accounts, CDs, etc---which is the bank's cost of the funds of savings accounts--for several southwestern states which make up the 11th Federal Reserve District
Normally, and I have never seen otherwise, the COFI Index is associated with ARM mortgages that have potential negative amortization. There are twelve FedearalReserve Districts. The COFI Index became the one used, probably because around 1970 the ARM products started in California before they spread across the United States
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