Fannie Mae Announces Reminder of COFI Replacement Indices
As previously announced, the Federal Home Loan Bank of San Francisco officially retired its 11th District Monthly Weighted Average Cost of Funds Index (COFI) as of its last publication date of January 31, 2022. Fannie Mae is transitioning its mortgage loan and security products to their respective replacement indices according to their particular legal documents. All changes related to this transition will be reflected in the monthly disclosure files published in March. A list of active impacted Single-Family and Multifamily Adjustable-Rate Mortgages (ARMs), and Single-Family CMOs/REMICs is available here.
As we have previously communicated, for a portion of Single-Family ARM loans, the mortgage margin and MBS margin will change. This may result in a fixed MBS Margin Structure pool changing to a weighted MBS Margin structure. This MBS Margin structure change will be identified by the fourth digit of the subtype switching from an F to a W (e.g., 1A F will change to 1A W). Additionally, the ARM MBS Subtype reference data files will be updated here to reflect the new Replacement Index Name on February 28, 2022.
Visit Fannie Mae's COFI Playbook and FAQs to learn more about the COFI transition, including additional details on the spread adjustment and recommended actions for stakeholders to consider as they manage through the transition. Visit Freddie Mac's website for downloadable test data for the Ent 11th COFI Repl and the Ent 11th COFI Instl Repl, including a training video that serves as a job aid.
This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this announcement constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of information contained in Fannie Mae's applicable Prospectus and the Prospectus Supplement and the related legal documentation, and no reliance may be placed on the completeness or accuracy of the information contained in this announcement.
You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.