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).

• Fraud charges for Honor Finance pair

  Sector developments and company hires

  Fraud charges for Honor Finance pair The US SEC has announced fraud charges against James Collins a...

  Market moves    24 September 2021

• Excellent shape

  European ABS/MBS market update

  September is living up to its reputation as a busy month for the European ABS/MBS primary market. Ev...

  News    23 September 2021

• US CLOs, Trups CDOs under observation

  Sector developments and company hires

  US CLOs, Trups CDOs under observation Fitch has placed 102 tranches issued by 43 US CLOs and 13 t...

  Market moves    22 September 2021

• Pandemic 'feedback loop' highlighted

  Sector developments and company hires

  Pandemic ‘feedback loop’ highlighted Secular changes affecting the recovery of...

  Market moves    21 September 2021

• Pagaya goes public via SPAC

  Sector developments and company hires

  Pagaya goes public via SPAC Fintech securitisation issuer Pagaya Technologies and EJF Acquisition C...

  Market moves    20 September 2021

• BPCE up

  Debut French green RMBS prepped

  BPCE is in the market with its inaugural green French prime RMBS via BPCE Home Loans FCT 2021 Green...

  News    20 September 2021

• SCI Start the Week - 20 September

  A review of SCI's latest content

  Last week's news and analysis CRT love FHFA promotes CRT usage and tempts Fannie back in...

  News    20 September 2021

• Securitisation execs promoted in PGIM reorg

  Sector developments and company hires

  Securitisation execs promoted in PGIM reorg PGIM Fixed Income has reorganised its senior manageme...

  Market moves    17 September 2021

• NPR issued on GSE capital framework

  Sector developments and company hires

  NPR issued on GSE capital framework The FHFA is seeking comment on a notice of proposed rulemaking...

  Market moves    16 September 2021

• On the up

  Growth in private real estate deals continues

  The UK real estate sector is seeing strong growth in private transactions, with loan-on-loan financi...

  News    16 September 2021

• Specialist lender stake acquired

  Sector developments and company hires

  Specialist lender stake acquired BNP Paribas Asset Management (BNPP AM) is set to acquire a majorit...

  Market moves    15 September 2021

• Pick-up continues

  European ABS/MBS market update

  Following on from last week’s pick-up, the European ABS/MBS market is set for another busy...

  News    15 September 2021

• SCI Start the Week - 13 September

  A review of SCI's latest content

  NPL ABS seminar tomorrow SCI’s 3rd Annual NPL Securitisation Seminar is taking place virt...

  News    13 September 2021

• Love me tender

  STACR tender shows validity of CRT and salience of capital efficiency

  The significance of Freddie Mac’s STACR tender offer, announced earlier this week, should...

  News Analysis    10 September 2021

• RFI issued on sustainable housing

  Sector developments and company hires

  RFI issued on sustainable housing The FHFA is requiring Fannie Mae and Freddie Mac to submit Equita...

  Market moves    10 September 2021

• Intrinsically ambiguous

  Social RMBS may convey 'elevated' credit risks

  While demand for ESG assets is gaining traction, social RMBS transactions might convey inherent cred...

  News Analysis    10 September 2021

• Chinese reserves

  Growth boosts domestic securitisation market

  China’s continued economic growth has boosted both securitisation performance and issuance...

  News    10 September 2021

• Back in business

  European ABS/MBS market update

  The European ABS/MBS primary market is up and running again after the summer lull. This afternoon sa...

  News    8 September 2021

• Cyberattack scenarios weighed

  Sector developments and company hires

  Cyberattack scenarios weighed S&P reports that it has seen more credit-relevant cyber event...

  Market moves    8 September 2021

• Risk transfer round-up - 8 September

  CRT sector developments and deal news

  News    8 September 2021

• SCI Start the Week - 6 September

  A review of SCI's latest content

  Last week's news and analysis Cliff edge looms 400,000 loans face forbearance expiry ...

  News    6 September 2021