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).
-
Call for aircraft ABS protections
Sector developments and company hires
Call for aircraft ABS protections Fitch reports that a material number of aircraft failed to be nov...
Market moves 26 January 2021 -
Supply issues
A tale of two markets for Dutch RMBS?
Dutch prime RMBS volumes hit a historic low of around €1.9bn in 2020, while the buy-to-let...
News Analysis 26 January 2021 -
CLO outlook updated
Sector developments and company hires
CLO outlook updated Fitch says it expects to change a significant portion of its CLO outlooks to st...
Market moves 25 January 2021 -
SCI Start the Week - 25 January
A review of securitisation activity over the past seven days
Last week's stories CMBS sailing Stormy waters ahead and astern, but the US CMBS market has avoi...
News 25 January 2021 -
Libor lives on
Likely postponement of USD Libor expiry gives structured finance market breathing space
The demise of USD Libor seems likely to be delayed until mid-2023, which gives the structured financ...
News Analysis 22 January 2021 -
'Unique' CMBX reflects Covid trends
Sector developments and company hires
‘Unique’ CMBX reflects Covid trends The IHS Markit CMBX.14 index is expected to...
Market moves 21 January 2021 -
CLO team finds new home
Sector developments and company hires
CLO team finds new home Fidelity International has established a new private credit capability wi...
Market moves 20 January 2021 -
Eviction limitations extended
New law poses risk for Spanish asset quality
Royal Decree-Law 37/2020, introduced last month by the Spanish government, extends the limitations o...
News 19 January 2021 -
Euro CLO equity yields dip
Sector developments and company hires
Euro CLO equity yields dip Annualised equity dividend yields across European CLOs averaged 12.9% in...
Market moves 18 January 2021 -
Strong opening
UK RMBS market update
The first public European securitisation of the year, dubbed Hops Hill 1, is expected to price today...
News 15 January 2021 -
illimity inks NPL ABS duo
Sector developments and company hires
illimity inks NPL ABS duo illimity Bank has finalised two non-performing loan transactions, inclu...
Market moves 15 January 2021 -
QM queue
New seasoned QM category could open door to increased MBS
On December 10, the Consumer Finance Protection Bureau (CFPB) issued the final rule for the criteria...
News Analysis 15 January 2021 -
Lloyd's ILS platform unveiled
Sector developments and company hires
Lloyd’s ILS platform unveiled Lloyd's has established London Bridge Risk PCC, the...
Market moves 14 January 2021 -
Libor linkage
UK RMBS transition risks highlighted
A number of UK RMBS issuers are initiating consent solicitation processes to amend notes and swap co...
News 12 January 2021 -
Ocwen, CFPB mediation unresolved
Sector developments and company hires
Ocwen, CFPB mediation unresolved Ocwen Financial Corporation has issued a statement expressing it...
Market moves 12 January 2021 -
Landmark Pan-Asian ILS launched
Sector developments and company hires
Landmark Pan-Asian ILS launched MS Amlin Underwriting has launched Phoenix 1 Re, the first locally...
Market moves 11 January 2021 -
Forbearance falters
Decline in loan removal from forbearance suggests large unknowns ahead
There has been a “troubling slowdown” in the rate of improvement of the number o...
News 8 January 2021 -
RFC issued on GSE living wills
Sector developments and company hires
RFC issued on GSE living wills The US FHFA is seeking comment on a notice of proposed rulemaking th...
Market moves 24 December 2020 -
RBS settles RMBS claims
Sector developments and company hires
RBS settles RMBS claims The securities division of Maryland Attorney General Brian Frosh has entere...
Market moves 23 December 2020 -
Fed frenzy
Ongoing Fed bid for GSE paper stronger than faster prepayments in 2021
Price action in GSE-issued MBS in 2021 will be dominated by the opposite pressures of faster prepaym...
News 23 December 2020 -
Romanian NPE deal sealed
Sector developments and company hires
Romanian NPE deal sealed National Bank of Greece (NBG) has entered into an agreement with Bain Ca...
Market moves 22 December 2020