Week Ending
11/06/09
0.06%
Month Ago
10/08/09
0.075%
Year Ago
11/07/08
0.53%
Determines the minimum interest rate the seller must impute in a delayed §1031 transaction and report when not receiving interest on §1031 monies held by a facilitator/accomodator and sets the amount of the ordinary income the facilitator/accommodator must report. See first tuesday article, “Interest imputed on §1031 monies delivered to facilitators.”

10-Year T-Bonds – Average Market Yield

Current
11/06/09
3.54%
Month ago
10/09/09
3.40%
Year ago
11/07/08
3.82%
This rate is a leading indicator of the direction of future FHLMC rates, which historically run around 1.4% higher during a stable money market. The rate is comprised of the level of worldwide demand for the dollar and anticipated future domestic inflation.

Average 30-Year Conventional Commitment Rate

Current
11/05/09
4.98%
Month ago
10/08/09
4.04%
Year ago
11/06/08
6.20%
The average 30-year commitment rate is the rate at which a lender commits to lend mortgage money in the United States-West as reported by FHLMC. More information is available here.

Current
11/05/09
4.40%
Month ago
10/08/09
4.33%
Year ago
11/06/08
6.20%
The average 30-year commitment rate is the rate at which a lender commits to lend mortgage money in the United States-West as reported by FHLMC. More information is available here.

Month of
10/09
0.20%
Month Ago
09/09
0.23%
Year Ago
10/08
1.27%
The ARM interest rate equals the 6-month T-Bill rate (at time of adjustment or an average of several prior rates), plus the lender’s profit margin.

Treasury Securities Average Yield — 1-Year Constant Maturity

Month of
10/09
0.41%
Month Ago
09/09
0.42%
Year Ago
10/08
1.44%
The ARM interest rate equals T-Bill yield, plus the lender’s profit margin. The index is an average of T-Bill yields with maturities adjusted to one year.

12-Month Treasury Average

Month of
11/09
0.544%
Month Ago
10/09
0.758%
Year Ago
11/08
2.05%
This figure is an average of the one-year T-Bill rates for the past 12 months.The ARM interest rate equals the 12 Month Treasury Average yield plus the lender’s profit margin.

Cost-of-Funds Index (11th FHLBB District)

Month of
10/09
1.47%
Month Ago
09/09
1.47%
Year Ago
10/08
2.76%
The ARM interest rate equals Cost-of-Funds, plus the lender’s profit margin. Current index reflects the cost of funds two months’ prior in the Unites States-West. More information is available here.

Average 15-Year
11/05/09
4.40%
Average 30-Year
11/05/09
4.98%
12-Month Treasury Avg
11/05/09
0.544%
The average 15- and 30-year conventional commitment rates are the rates at which a lender commits to lend mortgage money in the United States-West for the duration of the life of each respective loan as reported by FHLMC. More information is available here. The 12 Month Treasure Average is an average of the one-year T-Bill rates for the past 12 months.The ARM interest rate equals the 12 Month Treasury Average yield plus the lender’s profit margin.

London Inter-Bank Offered Rate

1 Month
0.12%
6 Month
0.63%
1 Year
1.24%
The ARM interest rate equals the LIBOR rate plus the lender’s profit margin. The rate is set by the banks in London, England.

Prime Rate

Month of
10/09
3.25%
Month Ago
09/09
3.25%
Year Ago
10/08
5.00%
The prime rate is used by banks to price short-term business loans and set ARMs tied to the prime rate. Historically the rate is 3% over the Federal Funds Target Rate.

Discount Rate – Federal Reserve Bank of San Francisco

Month of
10/09
0.5%
Month Ago
09/09
0.5%
Year Ago
10/08
1.75%
Usury law limits the annual interest yield on nonexempt loans to 10%, or the discount rate plus 5%, whichever is greater. The discount rate is charged on loans made by the the Federal Reserve Bank to its members. More information is available here.

Applicable Federal Rates

Short (to 3 years)
0.82%
Medium (3 to 9 years)
2.02%
Long (9+ years)
4.09%
Determines minimum interest yield reportable on carryback financing. The AFR category is determined by the carryback due date. *Rates are for monthly payments. Click here for AFRs on other payment periods.

Consumer Price Index — Urban Consumer (CPI-U)

(1982-84=100)

San Francisco Los Angeles
August 2008
225.411
August 2008
228.484
August 2009
225.801
August 2009
224.507
Annual Change
+ 0.17%
Annual Change – 1.74%
The CPI is used in leases to adjust rents. San Diego CPI-U is published semiannually and figures are 242.440 for the first half of 2008 and 240.885 for the first half of 2009, a 0.64% decrease over the same period last year. More information about the CPI is available here.

Rate Analysis for Private Lender Section 32 Reg Z Loans

Monthly*
6-Month
1-Year
2-Year
3-Year
5-Year
7-Year
August 2009
0.20%
0.41%
0.98%
1.51%
2.41%
3.05%

On junior trust deed loans a margin of 5 – 8% points is added to the Index Figure (Cost-of-Funds Rate) for the maturity date of a Treasury bill equal in length to the pay off date of the loan to set the Section 32 threshold for term limitations. With this in mind, if the percentage of the total loan amount represented by points and fees is greater than the applicable Federal Securities Rate plus ten percentage points, additional disclosures, limitations and prohibitions are triggered by Reg Z Section 32. For more information, please reference first tuesday’s articles Regulation Z Controlled Lending and Brokering Cal-32 High-Cost Loans. Also, see first tuesday Form 223-1 Points and Fees Test as well as first tuesday Form 223 Supplemental Truth-in-Lending Section 32 Disclosure.

*Selection of rate:

The rate for each month is set as the rate of the Treasury Security for each maturity date (term) on the 15th of the prior month as provided by the Treasury’s statistical release H. 15.

*Rate information gathered from:

The Federal Reserve Board

Federal Reserve Bank of San Francisco

Federal Reserve Bank of St. Louis

The Bureau of Labor Statistics

The Federal Home Loan Bank of San Francisco

Freddie Mac

Fannie Mae

U.S. Department of Labor

U.S. Department of the Treasury

Internal Revenue Service

For more information on interest rate related topics, see:

“To know now what one year forward will bring”, March 2009 issue