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).

• 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

• Rated RPL deal debuts

  Chimera Investment Corp is marketing its first rated re-performing loan RMBS, dubbed CIM Trust 2017-...

  News    2 October 2017

• SCI Start the Week - 2 October

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

  Pipeline It was a busy week of comings and goings for the pipeline. At the close of Friday, 11 new...

  News    2 October 2017

• Legacy non-conforming collections fall

  Average collection rates on loans in arrears backing some UK RMBS transactions are showing signs of...

  News    28 September 2017

• Bear-flattener trades advocated

  The Fed announced last week that it would unwind the System Open Market Account (SOMA) balance sheet...

  News    26 September 2017

• SCI Start the Week - 25 September

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

  Pipeline Additions to the pipeline last week were fairly broadly split. There were five ABS added,...

  News    25 September 2017

• Merger to impact SFR volumes

  Starwood Waypoint Homes and Invitation Homes recently announced plans to merge, creating the largest...

  News Analysis    21 September 2017

• SCI Start the Week - 18 September

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

  Pipeline There was greater variety to last week's pipeline additions, with significantly fewer ABS...

  News    18 September 2017

• 'Substantial' green ABS volumes eyed

  Vehicle and housing loans have the potential to produce substantial flows of large-scale green ABS t...

  News Analysis    18 September 2017