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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).


  • Core qualities

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    Q: How and when did Income Research & Management become involved in the securitisation marke...

    The Structured Credit Interview    9 December 2019
  • SCI Start the Week - 9 December

    A review of securitisation activity over the past seven days

    Transaction of the week NIBC recently priced the first fully-compliant ESG CLO, North Westerly VI,...

    News    9 December 2019
  • Euro lending support announced

    Sector developments and company hires

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    Market moves    28 November 2019
  • RMBS 'milestone' prepped

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    Provident Funding Associates, a non-bank mortgage lender, has prepped its inaugural securit...

    News    27 November 2019
  • Italian market developments 'positive' for ABS

    Sector developments and company hires

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    Market moves    27 November 2019
  • Indian innovation

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    News Analysis    26 November 2019
  • Mortgage partnership announced

    Sector hires and company developments

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    Market moves    25 November 2019
  • FRTB consultation launched

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    Market moves    22 November 2019
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    Market moves    21 November 2019
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    Market moves    19 November 2019
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    News Analysis    18 November 2019
  • Structured credit head announced

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    Market moves    18 November 2019
  • SME programmes launched

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

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    News    18 November 2019
  • Morgan loan prepays

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    Market moves    15 November 2019
  • Spanish RPL RMBS prepped

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    News    15 November 2019
  • Meaningful progress

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    News Analysis    15 November 2019
  • ERLS returns

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    News    15 November 2019
  • ESG initiative launched

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    Alt heads named test Allianz Global Investors has unveiled leadership changes that will take effec...

    Market moves    13 November 2019
  • MPL ABS breaches liquidity covenant

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

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    Market moves    7 November 2019