LoanStream's NanQ/Non-QM, Fannie Mae, and Freddie Mac are transitioning away from the LIBOR index for their adjustable-rate mortgages (ARMs) and will begin using the Secured Overnight Financing Rate (SOFR) as the index.
Though the market is still building, SOFR has a growing notional amount of floating rate instruments tied to it.
As an extension of the Secured Overnight Financing Rate (SOFR), the SOFR Averages are compounded averages of the SOFR over rolling 30-, 90-, and 180-calendar day periods.
The SOFR Index measures the cumulative impact of compounding the SOFR on a unit of investment over time, with the initial value set to 1.00000000 on April 2, 2018, the first value date of the SOFR. The SOFR Index value reflects the effect of compounding the SOFR each business day and allows the calculation of compounded SOFR averages over custom time periods.
Important Dates
In order to comply with agency timeframes, the following dates are being provided:
New SOFR ARMs
The new SOFR ARM products will remain 5-, 7- or 10-year fixed to adjustable-rate products, with a subsequent 6-month rate change in place of the current yearly rate change, after the fixed-rate period.
SOFR – The 30-day average of the overnight Secured Overnight Financing Rate as published by the Federal Reserve Bank of New York
As the date of implementation approaches, LoanStream Mortgage will continue to provide our Business Partners more details of application changes, and reference materials to help you navigate changes today and beyond.
Last day to submit LIBOR ARMs
Submission of SOFR ARMs
Last day to fund LIBOR ARMs