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


  • 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
  • Market moves update

    Sector developments and company hires in structured finance

    China Fitch Ratings has launched Fitch Bohua Credit Ratings to serve China's onshore bond...

    Market moves    25 October 2018
  • CLOs in demand

    Quarterly SCI data update

    Analysis of SCI's databases underlines the significant demand for CLO paper seen in 3Q18, in...

    News Analysis    23 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    [b]Acquisition[/b] [b]Miller[/b] is to acquire the independent London market (re)insurance broker[...

    Market moves    23 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    Accrual clause nixed The New York State Court of Appeals last week held that contractual attempts...

    Market moves    22 October 2018
  • SCI Start the Week - 22 October

    A review of securitisation activity over the past seven days

    Market commentary European primary ABS activity continued to be robust last week. The BPCE Home Loa...

    News    22 October 2018
  • Performance blueprint

    Positive predictions for NPL securitisations

    Northern Italian non-performing loan portfolios are performing better than Southern Italian portfoli...

    Talking Point    19 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    Alternatives alliance DWS Group and Tikehau Capital have entered into an alliance, following Tike...

    Market moves    18 October 2018
  • Primary energy

    European ABS primary market update

    The European primary RMBS market has come to life after the BPCE Home Loans FCT 2018 priced today (1...

    Market Reports    18 October 2018
  • Latest SCI podcast now live

    SCI podcast episode two has been released

    SCI’s latest podcast is now live. This month the team discuss the African Development Bank...

    News    18 October 2018
  • Steady subscription

    European ABS primary market update

    European primary ABS activity continues to be robust. In the RMBS sector, the BPCE Home Loans FCT 20...

    Market Reports    17 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    CRT poll results The results from SCI’s ‘What’s in a name?’...

    Market moves    17 October 2018
  • 'Aggressive' underwriting eyed

    UK RMBS remains 'robust' in face of Brexit

    While the UK buy-to-let (BTL) sector has suffered under new regulatory policies and Brexit uncertain...

    Talking Point    17 October 2018
  • Hurdle cleared

    First post-crisis RMBS for Wells Fargo

    Wells Fargo is in the market with its first post-crisis prime US RMBS. Named Wells Fargo Mortgage Ba...

    News    15 October 2018