11th District Cost of Funds Index Down Side

I take issue with Robert J. Bruss’ comments regarding the 11th District Cost of Funds index. (“Is Adjustable Rate Loan Better Than Fixed Rate?” Real Estate Q&A;, Aug. 14).

There are other viable adjustable indexes that are also lagging indicators that move as or even more slowly than the costs of funds, for example, Bank of America’s 12 Month Treasury Average Index.

Also, Bruss neglected to mention that the majority of 11th District Cost of Funds loans have negative amortization, which means that loan balances can increase rather than decrease.

LINDA M. COTA-KUMAGAI, Loan Officer, Bank of America, Encino