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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).


  • Euro secondary strengthens

    Levels continue to strengthen across the European securitisation secondary market. October has bee...

    SCIWire    31 October 2017
  • SCI Start the Week - 30 October

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

    Pipeline There were notably fewer pipeline additions last week. The final count consisted of an AB...

    News    30 October 2017
  • Risk transfer round-up - 27 October

    Rabobank has sold a €600m portfolio of 3,600 loans that it originated. The loans all have...

    News    27 October 2017
  • Job swaps round-up - 27 October

    Australia RMS has hired Pierre Wiart as md to its Sydney office, working on client relationships a...

    Job Swaps    27 October 2017
  • Libor replacement a "steep challenge"

    A transition to a replacement reference rate away from Libor by 2021 will be a "steep challenge" wit...

    News    24 October 2017
  • ABS rating effect explored

    Rating changes can have a significant impact on an ABS bond's price and value. While investors are l...

    News    24 October 2017
  • SCI Start the Week - 23 October

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

    Pipeline Additions to the pipeline last week were once again heavily skewed towards ABS. There were...

    News    23 October 2017
  • Job swaps round-up - 20 October

    Australia Baker McKenzie has recruited Duncan McGrath as a partner in its corporate group in Sydne...

    Job Swaps    20 October 2017
  • Mortgage ILS landmark imminent

    United Guaranty is in the market with Bellemeade Re 2017-1 (see SCI's deal pipeline). The mortgage i...

    News    18 October 2017
  • Participation interest deal prepped

    Freddie Mac is in the market with the first in a new series of risk transfer RMBS, backed by a US$1....

    News    17 October 2017
  • SCI Start the Week - 16 October

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

    Pipeline Additions to the pipeline last week were heavily skewed towards ABS. There were 20 ABS nam...

    News    16 October 2017
  • Job swaps round-up - 13 October

    Acquisition Navient has entered into an agreement to acquire online student lender Earnest for US$...

    Job Swaps    13 October 2017
  • Mortgage funding facility formed

    Natixis has established a secured funding facility in the form of an SPV, dubbed Rembrandt Dutch Mor...

    News    12 October 2017
  • Treasury report supports securitisation

    The US Treasury has released a report recommending a number of regulatory changes that could make it...

    News    9 October 2017
  • C-PACE lender breaks new ground

    Greenworks Lending has privately placed the first rated securitisation of purely commercial PACE ass...

    News Analysis    9 October 2017
  • SCI Start the Week - 9 October

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

    Pipeline It was a quieter week for the pipeline, with activity noticeably down on the week before....

    News    9 October 2017
  • Job swaps round-up - 6 October

    North America Roy Guthrie is to succeed JP McNeill - who is transitioning into a long-te...

    Job Swaps    6 October 2017
  • Rating agency opens in Europe

    KBRA has opened its first European office, located in Dublin, Ireland, and intends to expand into fu...

    News    5 October 2017
  • New dawn for bank funding strategies?

    The European securitisation market faces what is expected to be an "interesting" year ahead, as low-...

    News Analysis    4 October 2017
  • Pre-funding mechanism highlighted

    Belmont Green Finance (BGF) is in the market with an inaugural £201.53m UK non-conforming R...

    News    4 October 2017
  • Euro secondary sustained

    Activity levels continue to be sustained if not spectacular in the European securitisation secondary...

    SCIWire    3 October 2017