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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).


  • Double Dutch

    Dutch RMBS market sees surge of activity

    The Dutch RMBS market has seen a surge of activity with two new Dutch RMBS transactions marketing, b...

    News    16 November 2018
  • Selling stagnation

    European ABS market update

    Activity in the European ABS primary and secondary markets has slowed this week, with volumes genera...

    Market Reports    16 November 2018
  • Dry powder

    International ABS market update

    Pepper Group is prepping an Australian RMBS that is expected to be sized at A$500m-equivalent and in...

    Market Reports    15 November 2018
  • Diverging dynamics

    Aussie non-banks driving change

    Around A$30bn of Australian RMBS issuance is expected for full-year 2018, over 50% of which will be...

    News Analysis    15 November 2018
  • Tranche tinkering

    US RMBS market update

    Freddie Mac has restructured some of the mezzanine tranches in its most recent credit risk transfer...

    Market Reports    14 November 2018
  • NPL transaction markets

    Sector developments and company hires in structured finance

    NPL deal markets Banco Santander Totta is in the market with Hefesto STC (Guincho), a €98...

    Market moves    13 November 2018
  • Paper prioritised

    European RMBS market update

    Spreads have widened in the European RMBS sector, with secondary market activity remaining slow amid...

    Market Reports    13 November 2018
  • SCI Start the Week - 12 November

    A review of securitisation activity over the past seven days

    Market commentary The Dilosk No. 2 Irish legacy RMBS was in focus in the European primary market la...

    News    12 November 2018
  • Unpredictable factors

    Macro and micro challenges highlighted

    European market participants are facing three unpredictable factors in 2019, all of which will drive...

    News Analysis    9 November 2018
  • CLO investor poached

    Company hires and sector developments in structured finance

    Acquisitions LibreMax Capital has entered into an agreement to acquire Trimaran Advisors and certa...

    Market moves    9 November 2018
  • CRE platform acquired

    Sector developments and company hires in structured finance

    Acquisitions AXA Investment Managers has expanded its global debt platform through the acquisition...

    Market moves    8 November 2018
  • Broad attention

    European RMBS primary market update

    A new UK non-conforming RMBS is expected to enter the pipeline within the next two weeks. The origin...

    Market Reports    6 November 2018
  • Global head hired

    Company hires and sector developments in structured finance

    Dechert has hired Cameron Mitcham as a partner in London at the firm’s global finance prac...

    Market moves    6 November 2018
  • Housing practice pinched

    Company hires and sector developments in structured finance

    Fund launch Trium Capital is partnering with Ellington Global Asset Management to launch the Ellin...

    Market moves    5 November 2018
  • Strong technicals

    European RMBS and CMBS primary market update

    Technicals remain strong in the European CMBS and RMBS primary markets. The Dilosk No. 2 deal is i...

    Market Reports    5 November 2018
  • SCI Start the Week - 5 November

    A review of securitisation activity over the past seven days

    Transaction of the week Waterfall Asset Management is marketing the first publicly-rated RMBS backe...

    News    5 November 2018
  • Reverse mortgage deal prepped

    First reverse mortgage RMBS since 2007 markets

    Waterfall Asset Management is marketing the first publically-rated RMBS backed by reverse mortgages...

    News    2 November 2018
  • Market moves update

    Company hires and sector developments in structured finance

    Acquisitions Lennar Corporation has agreed to sell its Rialto Investment and Asset Management busi...

    Market moves    31 October 2018
  • SCI Start the Week - 29 October

    A review of securitisation activity over the past seven days

    Market commentary The US secondary CLO market saw heightened activity last week, with bid-lists cir...

    News    29 October 2018
  • Mixed outlook

    Risk transfer diversity set to increase

    The outlook for risk transfer issuance volumes is mixed, according to panellists at SCI’s...

    Talking Point    26 October 2018
  • Heightened holding

    European ABS market update

    Invesco is preparing a new €410m European CLO deal, along with GSO Capital Partners, which...

    Market Reports    26 October 2018