RMBS

Residential mortgage-backed securities, or RMBS, are bonds or notes created by securitisation that are backed by residential mortgages or residential real estate loans. RMBS originators are typically financial institutions that originate residential real estate or residential mortgage loans, including banks, building societies/savings & loans and mortgage finance companies. However, issuers could also include government-guaranteed securities issued following bank bailouts, such as TARP or TALF, and the Government Sponsored Enterprises Fannie Mae and Freddie Mac. To create residential mortgage-backed securities, or RMBS, institutions sell pools of their loans to a special-purpose vehicle, or SPV, which then sells the loans to a trust. The trust then repackages the loans as interest-bearing securities and issues them. This true sale of the loans to the SPV ensures that the RMBS is treated as bankruptcy-remote from the originator. Many different types of assets back RMBS, including prime, non-conforming, sub-prime, Alt-A (or Alternative-A), buy-to-let and single-family rental (SFR) mortgages. The financial crisis caused residential mortgage valuations to plummet, leading to severe losses/defaults in many RMBS transactions (and ABS CDOs), as well as efforts to begin modifying loan documentation and indeed the creation of many credit/dislocation/distressed opportunity/recovery funds to take advantage of opportunities in the RMBS sector. Post-crisis, the Government Sponsored Enterprises Fannie Mae and Freddie Mac have developed a credit risk transfer market, comprising synthetic RMBS structures (whereby the risk is transferred via CDS tranches).

• Breathing space?

  EU banks benefit from Basel 3 delay

  The Basel Committee's decision last week to delay implementation of the final Basel 3 rules...

  News    2 April 2020

• Development finance

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  SME house builders struggle to access finance, despite being responsible for around 13% of new build...

  News Analysis    2 April 2020

• MBS market buffeted

  'Unsustainable' hedges called out

  MBS spreads to Treasuries widened again yesterday (1 April), giving those hedging margin calls on TB...

  News Analysis    2 April 2020

• CRR compliance for NHG guarantee

  Sector developments and company hires

  EMEA Addleshaw Goddard has hired structured finance partner Rachel Kelly from McDermott Will &...

  Market moves    1 April 2020

• Advancing assistance programme prepped

  Sector developments and company hires

  Advancing assistance mooted Ginnie Mae is tailoring the existing disaster pass-through assistance...

  Market moves    31 March 2020

• CECL delayed

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  The US Fed, the FDIC and the OCC last week approved an extension of the new credit loss accounting s...

  News    31 March 2020

• Basel 3 implementation deferred

  Sector developments and company hires

  APAC fund launch Pierfront Capital Fund Management has been awarded its capital market services l...

  Market moves    30 March 2020

• Capacity constraints

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  News Analysis    30 March 2020

• Systemic risk?

  Servicing capacity concerns for non-bank lenders

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  News Analysis    30 March 2020

• SCI Start the Week - 30 March

  A review of securitisation activity over the past seven days

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  News    30 March 2020

• PPIP call

  CRT and non-agency MBS still in need of purchasing power

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  News    27 March 2020

• UK WBS hit expected

  Sector developments and company hires

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  Market moves    26 March 2020

• Forced selling

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  US MBS rallied yesterday (25 March) in the wake of the announcement that Congress has agreed the ter...

  News Analysis    26 March 2020

• Cloudy outlook

  RMBS perseveres amid market volatility

  LendInvest last week closed Mortimer BTL 2020-1, a £285m UK buy-to-let RMBS, in the face o...

  News Analysis    26 March 2020

• Fed revives the TALF programme

  Sector developments and company hires

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  Market moves    23 March 2020

• CRT deals disclosed

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  News    23 March 2020

• SCI Start the Week - 23 March

  A review of securitisation activity over the past seven days

  SCI NPL Securitisation Awards 2020 - new deadline SCI NPL Securitisation Awards 2020 - new de...

  News    23 March 2020

• NPL supervisory flexibility introduced

  Sector developments and company hires

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  Market moves    20 March 2020

• Economically efficient

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  News Analysis    20 March 2020

• Further central bank support unveiled

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  Bridging loan deal inked UK challenger lender Glenhawk has closed a private revolving securitisatio...

  Market moves    19 March 2020

• Risk off

  Securitisation markets seize up

  Amid a global sell-off, securitised asset classes where liquidity is scarce and asymmetry of positio...

  News    19 March 2020