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).


  • Italian AM expands to US

    Sector developments and company hires

    Azimut expands Italian asset manager Azimut has established a US-based operation named Azimut Alte...

    Market moves    19 November 2019
  • US CRT pick-up?

    Volumes to remain restricted to large banks

    The US capital relief trades market is witnessing a long-awaited uptick, with three deals reportedly...

    News Analysis    18 November 2019
  • Structured credit head announced

    Sector developments and company hires

    Acquisition finalised Artex has completed the acquisition of Horseshoe Insurance Services Holdings...

    Market moves    18 November 2019
  • SME programmes launched

    EIF supports two inaugural funding initiatives

    The EIF has for the first time provided funding support for a German online SME lending pla...

    News    18 November 2019
  • SCI Start the Week - 18 November

    A review of securitisation activity over the past seven days

    Transaction of the week UniCredit has completed what is believed to be the largest European ABS tra...

    News    18 November 2019
  • Morgan loan prepays

    Sector developments and company hires

    Coupon swaps planned The New York Fed's open market trading desk plans to conduct four sma...

    Market moves    15 November 2019
  • Spanish RPL RMBS prepped

    Transaction resecuritises paid-off SRF loans

    Barclays and Natwest are lead managers on a €518m reperforming Spanish RMBS, featuring lega...

    News    15 November 2019
  • Meaningful progress

    Non-agency eMortgage securitisation on the cards

    Meaningful progress in the origination and subsequent securitisation of eMortgages in the US non-age...

    News Analysis    15 November 2019
  • ERLS returns

    Lone Star prints Irish NPL RMBS

    Lone Star has priced its latest Irish non-performing loan RMBS at the same levels as its previous ER...

    News    15 November 2019
  • ESG initiative launched

    Sector developments and company hires

    Alt heads named Allianz Global Investors has unveiled leadership changes that will take effect on...

    Market moves    13 November 2019
  • MPL ABS breaches liquidity covenant

    Sector developments and company hires

    EMEA BTIG has established a fixed income credit division in London to service clients across EMEA...

    Market moves    8 November 2019
  • Counter suit filed over servicing system

    Sector developments and company hires

    Servicing system suit PennyMac Financial Services has filed a counter suit against Black Knight,...

    Market moves    7 November 2019
  • Pursuing illiquidity premia

    Corbin Capital ceo Tracy McHale Stuart and cio Craig Bergstrom answer SCI's questions

    Q: How and when did Corbin Capital become involved in the securitisation market? TMS: We&rsqu...

    The Structured Credit Interview    6 November 2019
  • CMBS md recruited

    Sector developments and company hires

    North America Incapital has appointed William White as md, CMBS. Based in Boca Raton, he will rep...

    Market moves    6 November 2019
  • NPL ABS inked

    Sector developments and company hires

    Eminent domain mods introduced To address the heightened risk to borrowers and investors of a multi...

    Market moves    5 November 2019
  • SCI Capital Relief Trades Awards 2019

    Credit Insurer of the Year: Arch Capital Group

    Arch Capital Group Ltd (ACGL) is SCI’s Credit Insurer of the Year in recognition of its po...

    News    4 November 2019
  • SCI Start the Week - 4 November

    A review of securitisation activity over the past seven days

    Transaction of the week Goldman Sachs is in the market with an unusual UK buy-to-let RMBS secured b...

    News    4 November 2019
  • RFC issued on disclosures

    Sector developments and company hires

    CDO transfer CVP CLO Manager has resigned as investment manager to the CVP Cascade CLO-1 and CLO-2...

    Market moves    1 November 2019
  • SCI Capital Relief Trades Awards 2019

    Law Firm of the Year: Clifford Chance

    Clifford Chance has been involved in the capital relief trades market from the beginning and the pas...

    News    1 November 2019
  • GARC deal expected

    Sector developments and company hires

    EMEA Florent Trouiller has joined Norton Rose Fulbright as a partner in its Luxembourg office. Tr...

    Market moves    31 October 2019
  • Niche programme

    Unusual UK BTL RMBS marketing

    Goldman Sachs is in the market with an unusual UK buy-to-let RMBS secured by properties owned primar...

    News    31 October 2019