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).

  • GNMA aims to stop churn

    In a move which should be a net benefit to RMBS, Ginnie Mae has taken steps to address churning in i...

    News    9 February 2018
  • Gearing up for green

    Two pilots funded by Horizon 2020 - the EU programme for research and innovation ̵...

    News Analysis    6 February 2018
  • SCI Start the Week - 5 February

    A look at the major activity in structured finance over the past seven days

    Pipeline The pipeline was dominated by ABS transactions last week, including a pair of structured s...

    News    5 February 2018
  • Call for transparency underlined

    A push for transparency is a common thread among European initiatives to reinvigorate the securitisa...

    News Analysis    2 February 2018
  • Interest shortfall risk spied for VOLT deals

    Many 2017 VOLT deals did not receive principal payments in the January 2018 remittance cycle, as the...

    News    31 January 2018
  • Euro secondary picking up

    Activity in the European securitisation secondary market is gradually picking up, albeit from a low...

    SCIWire    31 January 2018
  • SCI Start the Week - 29 January

    A look at the major activity in structured finance over the past seven days.

    Pipeline The balance of additions to the pipeline last week closely followed that of the week befor...

    News    29 January 2018
  • UK sukuk 'RMBS' first

    Al Rayan Bank is marketing its first £250m sharia-compliant UK s...

    News    29 January 2018
  • Latin America poised to grow

    The Latin American structured finance market is expected to be boosted by an improving economic envi...

    News Analysis    26 January 2018
  • Going green

    Current status of green ABS market discussed

    Representatives from Clifford Chance, TMF and Ygrene Energy Fund recently discussed the current stat...

    Talking Point    25 January 2018
  • SCI Start the Week - 22 January

    A look at the major activity in structured finance over the past seven days.

    Pipeline Last week saw pipeline additions return to favouring ABS. There were seven ABS added, alon...

    News    22 January 2018
  • Non-QM tipped as 'next opportunity'

    Last year marked the beginning of a transition from a post-crisis distressed recovery trade to a mor...

    News Analysis    19 January 2018
  • Market moves - 19 January

    Acquisitions RenaissanceRe Ventures is set to acquire a minority shareholding in Catalina Holdings...

    Market moves    19 January 2018
  • SCI Start the Week - 15 January

    A look at the major activity in structured finance over the past seven days.

    Pipeline Last week saw a ramping up of additions to the pipeline, led by ABS and RMBS. There were s...

    News    15 January 2018
  • Market moves - 12 January

    Acquisition Acrisure is set to acquire 100% of Beach & Associates equity from the firm&...

    Market moves    12 January 2018
  • Tracker examination impact assessed

    A review of the mismanagement of Irish mortgage payment calculations is likely to result in substant...

    News    9 January 2018
  • SCI Start the Week - 8 January

    A look at the major activity in structured finance over the past seven days.

    Pipeline There were a few deals added to the pipeline in the first week of the year. These were fou...

    News    8 January 2018
  • Market moves - 5 January

    Acquisitions/Investments SoftBank Group Corp has acquired Fortress Investment Group for US$3.3bn in...

    Market moves    5 January 2018
  • CSP testing delay 'minor issue'

    Testing of the Common Securitization Platform (CSP) (SCI passim) has carried on into the New Year, s...

    News Analysis    2 January 2018
  • Job swaps round-up - 22 December

    CDS options clearing LCH's CDSClear has become the first platform to clear credit index options, w...

    Job Swaps    22 December 2017
  • Embracing a tactical approach

    David Moffitt, head of tactical investment opportunities at LibreMax Capital, answers SCI's question...

    The Structured Credit Interview    22 December 2017