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).


  • THEAT 2007-1 and 2007-2 set to repay

    Sector developments and company hires

    Asia Pacific ISDA has appointed Su Yen Chia as its new head of Asia-Pacific public policy. Chia p...

    Market moves    7 January 2020
  • MNHD plans programmatic issuance

    Sector developments and company hires

    Egyptian securitisation debuts Egyptian real estate developer Madinet Nasr Housing and Development...

    Market moves    23 December 2019
  • SCI's latest podcast is now live!

    The editorial team discuss key issues in securitisation today...

    In this episode of the SCI podcast, Mark Pelham and Corinne Smith discuss our new research report on...

    News    19 December 2019
  • GSE price-fixing lawsuit settled

    Sector developments and company hires

    CLO manager transfer Hunt Investment Management has assigned collateral manager duties for the Hunt...

    Market moves    18 December 2019
  • Year-end melee

    UMBS pooling proposal under scrutiny

    US securitisation market participants are having to address a melee of important issues ahead of yea...

    News    17 December 2019
  • Structured credit pro returns to the buy-side

    Sector developments and company hires

    EMEA Kingswood Holdings has appointed Lindsey McMurray and Howard Garland to its board from Polle...

    Market moves    17 December 2019
  • Economic efficiency

    Standardised bank SRT pros, cons weighed

    Various factors should be considered when contemplating whether to execute a significant risk transf...

    News Analysis    16 December 2019
  • Mixed motivations

    THRP sets stage for US bank CRT

    A combination of macro and micro factors are understood to have influenced the issuance of JPMorgan&...

    News    13 December 2019
  • Sticking with the programme

    ABSPP hits new high, but total volumes remain low

    Latest figures from the ECB show that its ABSPP holdings are at an all-time high. However, the progr...

    News    12 December 2019
  • 2020 vision

    Looking for relative value in European securitisation

    Next year seems likely to present structured finance investors with even greater challenges in the s...

    News Analysis    11 December 2019
  • Alternative credit platform expands

    Sector developments and company hires

    CFO appointed Annaly Capital Management has appointed Serena Wolfe as cfo and a member of its ope...

    Market moves    10 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
  • Core qualities

    Caroline Chen, svp and research analyst at Income Research & Management, answers SCI's quest...

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

    The Structured Credit Interview    9 December 2019
  • Euro lending support announced

    Sector developments and company hires

    Euro lending support announced The EIF has committed €100m to online lending marketplace...

    Market moves    28 November 2019
  • RMBS 'milestone' prepped

    Inaugural non-bank transaction marks post-crisis first

    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

    Italian market developments ‘positive’ for ABS Recent market developments in i...

    Market moves    27 November 2019
  • Indian innovation

    Diverse Indian ABS market sees growing, global investor base

    The Indian securitisation market continues to grow and develop, with an increasingly global investor...

    News Analysis    26 November 2019
  • Mortgage partnership announced

    Sector hires and company developments

    Euro credit team bulks up CIFC has hired Anders Samuelsen from Muzinich as it continues to build i...

    Market moves    25 November 2019
  • FRTB consultation launched

    Sector developments and company hires

    APAC poll highlights key risks More than 80% of market participants polled by Moody’s at...

    Market moves    22 November 2019
  • Ceo retires

    Sector developments and company hires

    Capital markets head appointed 23 Capital has hired Sreesha Vaman as md, head of capital markets....

    Market moves    21 November 2019
  • 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