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).

• ESG data coverage scrutinised

  Sector developments and company hires

  The European Leveraged Finance Association (ELFA) has analysed coverage by three ESG data vendors fo...

  Market moves    7 December 2021

• SCI Start the Week - 6 December

  A review of SCI's latest content

  Last week's news and analysis Enhanced value Securent answers SCI's questions ...

  News    6 December 2021

• Winding down

  European ABS/MBS market update

  The European ABS/MBS primary market appears to have begun winding down for year-end this week. With...

  News    3 December 2021

• Enhanced value

  Securent president Justin Vedder and SitusAMC ceo Michael Franco answer SCI's questions

  Q: Securent is a newly formed SitusAMC entity that provides comprehensive risk management a...

  Provider Profile    3 December 2021

• ESG countdown

  ECB climate stress tests pending

  The ECB’s pending climate stress tests are expected to offer some answers around the data...

  News Analysis    3 December 2021

• Bosphorus CLOs transferred

  Sector developments and company hires

  Bosphorus CLOs transferred Cross Ocean Adviser, an affiliate of Cross Ocean Partners Management, h...

  Market moves    2 December 2021

• RFC issued on ABS tax policies

  Sector developments and company hires

  RFC issued on ABS tax policies HMRC is seeking feedback on two draft statutory instruments: the Tax...

  Market moves    1 December 2021

• BWIC workgroup formed

  Sector developments and company hires

  Mortgage Industry Standards Maintenance Organization (MISMO) has formed a BWIC data development work...

  Market moves    30 November 2021

• SCI Start the Week - 29 November

  A review of SCI's latest content

  Last week's news and analysis Advanzia advances German credit card ABS debuts Partial...

  News    29 November 2021

• Slowly widening

  European ABS/MBS market update

  With investors already looking ahead to 2022, the European ABS/MBS primary market is slowly thinning...

  News    26 November 2021

• SCI forum: What are the benefits of forward flow structures for the securitisation market?

  Our panel of market practitioners respond to readers' questions

  Conor Houlihan, partner at DLA Piper, Ireland Current dynamics in the banking sector are such that...

  Talking Point    26 November 2021

• Syon upgraded on stable performance

  Sector developments and company hires

  KBRA has completed a surveillance review of Lloyds’ synthetic RMBS Syon Securities 2020-2....

  Market moves    25 November 2021

• Scores on the doors

  Significant shift in scorecard augurs increased CAS/STACR

  The new 2022 GSE scorecard, released at the end of last week, is likely to mean greater issuance in...

  News Analysis    23 November 2021

• Rare RMBS with a twist

  Sector developments and company hires

  A rarely seen public Swedish RMBS is in the market with an unusual structural twist – Hypo...

  Market moves    23 November 2021

• Upgrades anticipated after CMBS updates

  Sector developments and company hires

  Moody’s has updated three commercial real estate sector methodologies, following requests...

  Market moves    22 November 2021

• Robust fundamentals

  Positive outlook for GSE CRT market

  GSE credit risk transfer gross new issuance has already hit record annual volumes, driven by high mo...

  News Analysis    22 November 2021

• GSE scorecard released

  Sector developments and company hires

  GSE scorecard released The FHFA has released the 2022 Scorecard for Fannie Mae, Freddie Mac and Co...

  Market moves    18 November 2021

• Dutch mortgage alliance expanded

  Sector developments and company hires

  Dutch mortgage alliance expanded Achmea Bank is set to acquire a €500m mortgage portfolio...

  Market moves    16 November 2021

• Some softening

  European ABS/MBS market update

  With the end of the year in sight, issuers are competing for investor demand in the European ABS/MBS...

  News    12 November 2021

• Sri Lanka eyes remittance securitisation

  Sector developments and company hires

  Sri Lanka eyes remittance securitisation The government of Sri Lanka (GOSL) is requesting competit...

  Market moves    12 November 2021

• Indian securitisation market presents challenges

  The Indian structured finance market has been around for over two decades but remains quite restrict...

  The market revolves around Indian banks' targets for lending to priority sectors. Banks have...

  Talking Point    11 November 2021