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).


  • CRT return for FNMA?

    Supreme Court ruling on Calabria's future imminent

    A US Supreme Court decision about whether President Biden can remove Mark Calabria as director of th...

    News Analysis    27 May 2021
  • Missed opportunity

    ESA report disappoints on securitisation treatment

    The recent European Supervisory Authorities (ESA) report on the implementation and functioning of th...

    News Analysis    27 May 2021
  • CLO conflicts of interest eyed

    Sector developments and company hires

    CLO conflicts of interest eyed IOSCO has issued four questionnaires for industry participants on...

    Market moves    24 May 2021
  • SCI Start the Week - 24 May

    A review of securitisation activity over the past seven days

    Last week's stories Gaining momentum European solar ABS issuance tipped to emerge Revving up ...

    News    24 May 2021
  • Strategic credit commitment inked

    Sector developments and company hires

    Strategic credit commitment inked The Investment Management Corporation of Ontario (IMCO) has close...

    Market moves    20 May 2021
  • Data centre leverage 'inconsistent' with ratings

    Sector developments and company hires

    Data centre leverage ‘inconsistent’ with ratings A number of wholesale data cen...

    Market moves    19 May 2021
  • Blue investable markets study underway

    Sector developments and company hires

    Blue investable markets study underway The European Commission and the EIB Group have increased the...

    Market moves    18 May 2021
  • SCI Start the Week - 17 May

    A review of securitisation activity over the past seven days

    Last week's stories Biden bonanza Vast infrastructure package to energise project finance CLOs ...

    News    17 May 2021
  • Virtuous circle?

    Bullish sentiment underpins securitisation opportunity

    A strong rebound in global growth appears to be underpinning the opportunity in securitised credit,...

    News    14 May 2021
  • Asset managers partner on pensions initiative

    Sector developments and company hires

    Asset managers partner on pensions initiative DWS has launched the DWS Secured Income Fund, aimed a...

    Market moves    13 May 2021
  • Lone Star rising

    A soup to nuts profile of TCBI's inaugural CRT

    It took Texas Capital Bank nine months to finalise its landmark capital relief trade, becoming the f...

    News Analysis    13 May 2021
  • Iberian RMBS investment disclosed

    Sector developments and company hires

    Iberian RMBS investment disclosed The EIB has disclosed that it invested €50m in UCI&r...

    Market moves    12 May 2021
  • STS BTL RMBS prepped

    Sector developments and company hires

    STS BTL RMBS prepped Domivest is in the market with the first-ever STS buy-to-let RMBS. Dubbed Domi...

    Market moves    11 May 2021
  • Hertz reorganisation proposals weighed

    Sector developments and company hires

    Hertz reorganisation proposals weighed Hertz has determined that a revised proposal to provide eq...

    Market moves    10 May 2021
  • SCI Start the Week - 10 May

    A review of securitisation activity over the past seven days

    Last week's stories Niche exposure CFE Finance answers SCI's questions NPL rebound? Secured...

    News    10 May 2021
  • Greek investment partnership inked

    Sector developments and company hires

    Greek investment partnership inked Mount Street Group has formed a strategic partnership in Greec...

    Market moves    29 April 2021
  • Irish RPL refi prepped

    Sector developments and company hires

    Irish RPL refi prepped A refinancing of two Irish reperforming RMBS - European Residential Loan Sec...

    Market moves    28 April 2021
  • APAC ESG expansion eyed

    Sector developments and company hires

    APAC ESG expansion eyed Moody’s is set to expand its Singapore office with the aim of s...

    Market moves    27 April 2021
  • Downgrades for 'lower quality' mall CMBS

    Sector developments and company hires

    Downgrades for ‘lower quality’ mall CMBS Moody's has downgraded 119 pri...

    Market moves    26 April 2021
  • Non-prime pick-up

    UK RMBS driving European volumes

    UK RMBS led European placed securitisation volume in 1Q21, rising to €12.7bn-equivalent fro...

    News Analysis    26 April 2021
  • SCI Start the Week - 26 April

    A review of securitisation activity over the past seven days

    Last week's stories Bottoming out EU NPL ratios improve Climate concerns The nexus between i...

    News    26 April 2021