COFI Transition Playbook for Adjustable-Rate Mortgages

This document is a guide detailing the transition process from the 11th District Monthly Weighted Average Cost of Funds Index (COFI) to replacement indices for COFI-indexed products, specifically Single-Family (SF) and Multifamily (MF) Adjustable-Rate Mortgages (ARMs) and Collateralized Mortgage Obligations (CMOs). The playbook outlines the key milestones and recommended actions for stakeholders to consider during this transition. It highlights the necessity of transitioning away from COFI due to the cessation of its publication by the Federal Home Loan Bank of San Francisco after January 31, 2022. The document also addresses the implications of this transition on accounting, tax, and compliance considerations, emphasizing the importance of adapting business policies and procedures accordingly. Additionally, it provides information on the new replacement indices, including the Enterprise 11th District COFI Replacement Index and the Enterprise 11th District COFI Institutional Replacement Index, along with their respective methodologies for spread adjustments.