Intercontinental Exchange (ICE) has launched the ICE Average Prime Offer Rates Index (ICE APOR), a new benchmark designed to improve transparency in the US mortgage and securitisation markets.
ICE Launches Average Prime Offer Rates (APOR) Index
The index, which is updated weekly and available on the ICE Index Platform, is said to aim to complement the APOR figures currently published by the Consumer Financial Protection Bureau (CFPB).
The exchange explained that ICE APOR reflects the annual percentage rates based on average interest rates, points, fees and other terms offered on prime mortgage loans.
It is said to use the same loan origination data, sourced from ICE Mortgage Technology’s Encompass system, that underpins the CFPB’s official APOR calculation.
Chris Edmonds, President of ICE Fixed Income and Data Services, said: “ICE’s deep experience leveraging transactional data and designing trusted benchmarks was critical in constructing ICE APOR, which is intended to provide additional and continued transparency for both lenders and participants in the mortgage-backed security market.”
APOR is a metric used to determine whether mortgage loans meet regulatory requirements and qualify for securitisation by Government-Sponsored Enterprises, such as Fannie Mae and Freddie Mac.
ICE’s new index is expected to provide an alternative reference point to support compliance and improve market clarity.
ICE currently administers more than 7,000 indices across fixed income, equity, currency, commodity, and mortgage markets.
