dcsimg
We research, you save.
Got Questions On Rates? (855) 610-2972

The index which governs my ARM disappeared. What happens now?

By   |  Posted in Ask The Expert

Q: Since the OCC stopped posting data in 2012, what ARM index is a good replacement for the old FHLBB "monthly median cost of funds” ratio, annualized, percent?

A: This phenomena happens from time to time, as various esoteric financial indicators come and go with changes in the market. In this case, your index was put together by looking at deposit costs at thrifts (a.k.a. Savings and Loans). Banks with these kinds of charters have been fading from the landscape as many have converted to other corporate forms, including state and nationally chartered banks. Some notables no longer with us include Washington Mutual and World Savings, just to name two.

In a case where an index is no longer produced, the regulator who oversees the process will usually find or produce another indicator which performs essentially the same function. In this case, the “Monthly Median Annualized Cost of Funds” was discontinued when the regulator (the Office of Thrift Supervision) was merged into the Office of the Comptroller of the Currency in 2011. The index which replaces the old MMACOF is called the “Federal Cost of Funds”; this is produced by Freddie Mac each month and is based on the government's borrowing costs, rather than a specific industry.

More help from HSH.com

  • Mortgage Rates Radar 08/23/2016: Mortgage rates show little movement

    HSH.com releases its latest Weekly Mortgage Rates Radar showing another period of virtually no change in popular mortgage rates in the seven-day period ending August 23, as financial markets are quiet as the summer winds toward its unofficial close. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).
  • Metro area definitions

    Metro area definitions for the 27 metropolitan areas in "The salary you must earn to buy a home in 27 metros"
  • The salary you must earn to buy a home in 27 metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your city.
  • Mortgage Rates Radar 08/16/2016: Mortgage rates in slight retreat again

    HSH.com releases its latest Weekly Mortgage Rates Radar showing a small dip in popular mortgage rates during the seven-day period ending August 16, as markets seem to be mostly stuck in neutral as of late. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).       
  • How to turn your home into a short-term rental