MoneyCafe.com

All of the LIBOR rates are down over last month.  See links below.

The 1 Year Constant Maturity Treasury Rate (1 Year CMT) was 0.55% for April.  This brings the 12 Month Treasury Average (12 MTA) down to 1.340% nearing it’s low for the last decade.

As announced yesterday, the 11th District Cost of Funds Index (COFI) dropped again in March to 1.627%.   For comparison, the Certificates of Deposit Index (CODI) was 2.428% for March and the Wachovia Cost of Savings Index (COSI) was unchanged at 3.60% (unconfirmed number) for March.

All of our rate data, graphs and charts have been updated to reflect the new data. 

See:
http://www.moneycafe.com/library/libor.htm
http://www.moneycafe.com/library/1monthlibor.htm
http://www.moneycafe.com/library/3monthlibor.htm
http://www.moneycafe.com/library/6monthlibor.htm
http://www.moneycafe.com/library/cmt.htm
http://www.moneycafe.com/library/mta.htm
http://www.moneycafe.com/library/cofi.htm
http://www.moneycafe.com/library/codi.htm
http://www.moneycafe.com/library/cosi.htm

As announced yesterday, the 11th District Cost of Funds Index (COFI) dropped significantly in February to 2.003%.  (The COFI for January was 2.455%.)   This is similar to what happened last year when there was a sizable drop from January to February.

By comparison, the Certificates of Deposit Index (CODI) was 2.572% for February, down from 2.730% in January.

The Wachovia Cost of Savings Index (COSI) was at 3.60% in February, down only from 3.69% in January.  We are still waiting for the sizable drop in this index.

All of our rate data, graphs and charts will be updated later today upon reciept of the March treasury rate data from the Federal Reserve. 

See:
http://www.moneycafe.com/library/cofi.htm
http://www.moneycafe.com/library/codi.htm
http://www.moneycafe.com/library/cosi.htm

The 11th District Cost of Funds Index (COFI) was updated this afternoon.  The rate reported today is 2.455% and represents January’s COFI.

Monthly LIBOR rates, the Wachovia Cost of Savings Index (COSI) and the Certificates of Deposit Index (CODI) were also upated.  The Prime Rate remains 3.25%.

See:
http://www.moneycafe.com/library/cofi.htm
http://www.moneycafe.com/library/libor.htm
http://www.moneycafe.com/library/cosi.htm
http://www.moneycafe.com/library/codi.htm
http://www.moneycafe.com/library/primerate.htm

Quite a few in the MoneyCafe.com community are interested in the Wachovia Cost of Savings Index (COSI), which is an index for adjustable rate mortgages.  It’s like a broken record when reporting the COSI.  One of our users reported that 3.76% was the latest COSI.  I confirmed this number with the bank.  To paraphrase an old saying – check out the new COSI, same as the old COSI. 

While the rest of the financial world was dealing with complete instability since the middle of 2008, Wachovia maintained virtually the same cost of savings for seven straight months (June through December).  There is a flat line on the recent COSI graph.   The bank is essentially saying they paid the same for their deposits on the last day of December as they did on the last day of June.  At first glance (and second glance) this really makes you scratch your head.   Rates have been very volatile since June, but not the COSI.  Almost every bank is offering about half the interest rates they were offering last summer.   If you look at the Wachovia website, it shows much lower rates on CDs than the COSI would indicate.  On top of all that, Wachovia stopped reporting  the COSI publicly.  There has been a lot of grumbling about COSI mortgage rates not going down.  After all, the higher the reported COSI the more money Wachovia gets on it’s mortgages.  On the surface it seems like something is very wrong.  But is there funny business going on with Wachovia and the COSI?   

According to the Wachovia webite, the Cost of Savings Index (COSI) “is a unique index available through Wachovia.  COSI is based on the interest rates Wachovia pays to individuals on certificates of deposit.  The index is calculated monthly and used to determine the interest rate on your mortgage.  COSI is based on the weighted average of all the interest rates paid on certificates of deposit held by individual depositors as of the last business day of each month.”

Looking at how far rates have dropped these past 6 month, it would seem almost impossible for the COSI to be so stable.  So I looked into some comparable indexes to see if I could glean anything.  I was surprised.  The 11th District Cost of Funds Index (COFI) was 2.829 in June and 2.757 in December.  So it’s pretty much the same.  It did spike in the fall but came back down.   The COFI is overall a lower rate because it doesn’t just include CDs.  The COFI also includes checking accounts which may pay no interest and money market accounts which pay lower rates than CDs.  Another good comparison is the Treasury Department’s reported National Cost of Funds which was 3.10 for June and 2.89 for November (the last month reported).   There was no big drop in this index.

So back to the question of whether there is any funny business going on with the COSI?  It’s quite remarkable to see complete stability in anything lately.  It’s the only flat line chart I’ve seen.  But it was the COFI that spiked in the fall, while the COSI was stable.  And industry wide, banks’ costs of funds were not that much lower at the end of the year than they were last June.  So I would have to say, while the recent COSI history seems odd, it’s consistent with comparable data.

See also:
http://moneycafe.com/blog/2008/12/wachovia-cosi/

Updates to the Wachovia Cost of Savings Index (COSI) (formerly known as the World Savings COSI) are no longer being provided to the public by Wachovia.  Wachovia loan representatives don’t even have the COSI numbers, because they are no longer originating COSI loans.  Wachovia will provide its COSI loan customers the current rate on their monthly statements.  This may only be relevant to borrowers who have World Savings/Wachovia adjustable mortgage loans using the COSI as an index; but there are a lot of these loans out there. 

Wachovia will soon be acquired by Wells Fargo Bank.  We anticipate they would try to get rid of this index altogether and come up with a substitute index.  This has precedence and is usually allowed in the terms of the loan documents.  The index was changed when Wachovia acquired Golden West.  Also, when Fannie Mae stopped publishing LIBOR rates, many loans that were tied to the Fannie Mae LIBOR were changed to a different LIBOR rate index.

Since we won’t have a source for the data, we will no longer be able to consistently publish the COSI rate.  We suggest current customers use the comments section of this post to keep each other updated as to the current rate.  The rate for the previous month is usually calculated by the 15th of the current month.