Indexes

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Below are brief descriptions of the most popular indexes used for the Adjustable Rate Mortgages (ARM’s):

MTA - The 12 month Treasury Average. It takes the previous 12 monthly values of the 1 year CMT (US Treasury Security) and averages them creating a much more stable index than the CMT itself.

CODI - T he Cost of Deposit Index is the 12 month average of the monthly averaged yields on the nationally published 3 month Certificate of Deposit Rates.

COFI - The 11th District Cost of Funds Index reflects the average interest rate paid by the member banks and savings institutions located in Arizona, California and Nevada. The largest part of this index is based on savings accounts so it will move more slowly to market swings. The COFI has long been considered the most stable and popular of indices associated with the Options ARM.

COSI - The Cost of Savings Index is the hardest to track but arguably the least volatile. The COSI index is the weighted average of the rates of interest paid on depository accounts held with World Savings. The index is calculated at the end of every month and then averaged with the previous 12 months creating a very stable index.