FNMA has announced the following:
“We currently offer several adjustable-rate mortgage (ARM) plans that use the monthly weighted-average cost of funds index (COFI) as computed each month by the Federal Home Loan Bank of San Francisco. Due to the retirement of this index scheduled to occur in January 2020, with the December 2019 COFI being the last published rate, Fannie Mae is proactively removing all references to this index and associated ARM plans (681, 682, 760, and 761) from the Selling Guide and Standard ARM Plan Matrix. We are also retiring all legal documents specific to use of COFI from our website.” (FNMA Ann. SEL-2019-01; available directly at: https://www.fanniemae.com/content/notification/notification-selling-announcement-sel-2019-01)
We are currently reviewing this change to determine any impact to our document library and/or systems and evaluating any necessary changes. Any modifications we make will be announced on our website (https://compliance.docutech.com/).
UPDATE: On July 31, 2019 FNMA announced that the Federal Home Loan Bank of San Francisco would be extending publication of the COFI for an additional year, ceasing publication of the December 2020 COFI on January 29, 2021 (see “Servicing Notice: Extension of Cost of Funds Index” at https://www.fanniemae.com/singlefamily/news). The announcement also states that FNMA has not determined which index to use as a substitution for COFI, but will inform servicers as soon as this is resolved.
UPDATE: On October 21, 2020 FNMA announced that the Federal Home Loan Bank of San Francisco has, again, extended the publication of the COFI for an additional year, with the index to no longer be calculated “after the publication of the Dec. 2021 COFI [on] Jan. [31,] 2022.” (see https://singlefamily.fanniemae.com/news-events/servicing-notice-extension-cost-funds-index-0 and https://www.fhlbsf.com/resources/cofi/faq).