Posted To: MND NewsWire

Freddie Mac is touting its readiness to transition from using the London Interbank Offered Rate or LIBOR to the Secured Overnight Financing Rate (SOFR) as a mortgage reference index. The end date for LIBOR may be extended (yet again) from the end of 2021 to mid-2023, but Freddie Mac says it remains committed to prepare for a final transition as soon as possible. SOFR, which was specifically developed to replace LIBOR, is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. Because, unlike LIBOR, it is collateralized, its rate tends to be lower. Over the last month it has ranged between 0.05 and 0.09 percent. The New York Fed publishes the SOFR on its website each business day. The company said it has made significant progress in support of the move…(read more)

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Source: Mortgage News Daily