Structured Credit Investor SCI’s 5th Annual Capital Relief Trades Seminar 17 October 2019, London
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).


  • Credit-granting guidance outlined

    "Bright-line" verification test still absent

    The EBA recently published an answer to a question posed by AFME in relation to Article 9(3) of the...

    News    19 September 2019
  • CMBS NOI slowing

    Sector developments and company hires

    Aircraft ratings review Moody’s has published a new overview which examines ABS issued i...

    Market moves    19 September 2019
  • CLO downgrade announced

    Sector developments and company hires

    CDS hire announced Axiom Alternative Investments has appointed Bedis Gharbi as senior portfolio ma...

    Market moves    16 September 2019
  • SCI Start the week - 16 September

    A review of securitisation activity over the past seven days

    Transaction of the week Alior Leasing has launched a 12 month revolving cash securitisation of aut...

    News    16 September 2019
  • ECB stimulus announced

    Sector developments and company hires

    ECB stimulus package outlined The ECB has announced that it is cutting the interest rate on the de...

    Market moves    13 September 2019
  • Competitive boost

    QMP expiration levels playing field

    The US Treasury’s plan to reform the country’s housing system is expected to lev...

    News    13 September 2019
  • CLO firm incorporates ESG approach

    Company hires and sector developments

    Cayman CLO first Maples Group has supported the first ever US CLO to issue out of the Cayman Islan...

    Market moves    11 September 2019
  • Country md announced

    Company hires and sector developments

    Country md announced Jervis Smith has been appointed country md of Vistra Luxembourg, responsible...

    Market moves    10 September 2019
  • Maltese benefits

    Jurisdiction especially suited to innovative transport ABS

    Malta provides a legal and tax framework that provides the same benefits for the establishment of SP...

    News Analysis    10 September 2019
  • SCI Start the Week - 9 September

    A review of securitisation activity over the past seven days

    Transaction of the week The EIF has launched two new funding initiatives to support SMEs in Europe,...

    News    9 September 2019
  • ILS deputy head hired

    Company hires and sector developments

    Blockchain standardisation steps taken The standardisation of blockchain technology, which the Int...

    Market moves    6 September 2019
  • Reform plans released

    GSEs to be recapitalised and repositioned

    The US Treasury has released its plan to reform the country’s housing finance system. The...

    News    6 September 2019
  • Ceo appointed

    Sector developments and company hires

    Analytics head nabbed Merion Square Capital has hired Jeff Fraser as head of analytics, based at t...

    Market moves    5 September 2019
  • STS success?

    Market warms to STS, but threats hover on the horizon

    While STS lead to a dampening effect on ABS issuance at the start of the year, it is starting to bri...

    News    5 September 2019
  • Structured credit vets nabbed

    Sector developments and company hires

    EBA makes STS digital move The EBA has announced that it has added the STS Regulation to its onlin...

    Market moves    4 September 2019
  • Boost for Brazilian RMBS?

    Number of risks from index-linked mortgages possible

    A resolution in Brazil, intended to widen the pool of funds available to finance the purchase of hom...

    News Analysis    2 September 2019
  • RAIT sale

    Company developments and sector hires

    Aussie bank secures warehouse line Yellow Brick Road (YBR), an Australian non-bank lender, has rec...

    Market moves    2 September 2019
  • SCI Start the Week - 2 September

    A review of securitisation activity over the past seven days

    Market commentary A new Fitch study shows that there is a wide range in trustee reported market val...

    News    2 September 2019
  • NPL relief

    ECB extends provisioning calendar

    The ECB is set to align its supervisory expectations regarding the provisioning of new non-performin...

    News Analysis    30 August 2019
  • Back to work

    UK deal flow restarts ahead of expected busy months ahead

    Oak No. 3 has become the first ‘post-summer’ UK ABS/MBS deal to price. It is exp...

    News Analysis    29 August 2019
  • Broker charged over mispricing

    Sector developments and company hires

    Broker charged over mispricing The US SEC has charged New York-based broker-dealer AOC Securities...

    Market moves    23 August 2019