LOGIN
 

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).


  • Capital trouble

    GSEs stare down the barrel of reduced capital relief for CRT deals

    The re-proposed capital rules for the GSEs before they exit conservatorship, released by the Federal...

    Capital Relief Trades    5 June 2020
  • Senators seek TALF expansion

    Sector developments and company hires

    Senators seek TALF expansion US Senators Jerry Moran, Martha McSally and Thom Tillis sent a lette...

    Market moves    5 June 2020
  • May payments slump

    Forbearances are down for the first time since CARES, but payments by borrowers in forbearance slump

    Last week saw the first net fall in US mortgage forbearances since the beginning of the Covid 19 cri...

    News    5 June 2020
  • Conduit CMBS on watch

    Sector developments and company hires

    Conduit CMBS on watch S&P has placed its ratings of 96 classes from 30 US conduit CMBS on...

    Market moves    4 June 2020
  • Vulnerability highlighted

    Irish re-performing RMBS 'more sensitive'

    Measures taken to contain the coronavirus pandemic have resulted in economic contraction, which is e...

    News    4 June 2020
  • More Euro CLOs on review

    Sector developments and company hires

    More Euro CLOs on review Moody’s has put a further 234 tranches from 77 European BSL CL...

    Market moves    3 June 2020
  • New paradigm?

    Trustee discretion required in virtual environment

    The coronavirus crisis ushered in a new paradigm for securitisation noteholder communication and doc...

    News Analysis    2 June 2020
  • Risk mitigation

    Southern European RMBS 'insulated'

    An increase in European RMBS delinquency rates is expected in the coming months, reflecting coronavi...

    News    1 June 2020
  • Equity opportunities?

    Sector developments and company hires

    Equity opportunities? Despite a lack of visibility and liquidity and with cashflows likely to deter...

    Market moves    1 June 2020
  • SCI Start the Week - 1 June

    A review of securitisation activity over the past seven days

    Last week's stories Accessing guarantees CBILS securitisation warehouses mulled Forbe...

    News    1 June 2020
  • Renewables JV inked

    Sector developments and company hires

    Renewables JV inked By way of a joint venture, illimity Bank and VEI Green II have set up a securit...

    Market moves    29 May 2020
  • Forbearances falter

    Forbearance volumes slow, but the next stage is daunting

    The rate of increase of US home loans in forbearance plans has slowed significantly lately, accordin...

    News    29 May 2020
  • Pan-European guarantee fund launched

    Sector developments and company hires

    Pan-European guarantee fund launched The EIB board has approved a €25bn Pan-European Guara...

    Market moves    27 May 2020
  • CLO manager performance assessed

    Sector developments and company hires

    CLO manager performance assessed JPMorgan has issued its latest CLO manager quarterly reports for b...

    Market moves    21 May 2020
  • Moratoria mulled

    Payment holidays set to test CRT provisions

    Portfolios referencing loans subject to payment holidays may create a new sub-asset class within the...

    News Analysis    21 May 2020
  • TALF subscription date announced

    Sector developments and company hires

    TALF subscription date announced The New York Fed has scheduled the first TALF ABS loan...

    Market moves    20 May 2020
  • Covid-19 relief initiative launched

    Sector developments and company hires

    Covid-19 relief initiative launched Community Capital Management has launched an initiative to in...

    Market moves    19 May 2020
  • SCI Start the Week - 18 May

    A review of securitisation activity over the past seven days

    Last week's stories Auto ABS boost European ABS market update Drafting issues The potential...

    News    18 May 2020
  • Forbearance frontiers

    4.7m home loans now in forbearance

    Almost 4.7m US homeowners are in forbearance plans as of May 12, an increase of 200,000 in...

    News    15 May 2020
  • Corporate actions slow down

    Sector developments and company hires

    Corporate actions slow down Negative rating actions on corporate loan issuers continue to accumulat...

    Market moves    14 May 2020
  • Liquidity support

    Amendments mitigate forbearance impact

    A number of UK securitisation issuers are enhancing their deals to mitigate the negative impact on r...

    News Analysis    14 May 2020