Structured Credit Investor SCI’s 5th Annual Capital Relief Trades Seminar 17 October 2019, London
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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).


  • CMBS pro named president

    ReadyCap Commercial has named Anuj Gupta as president, responsible for loan originations, affinity r...

    Job Swaps    23 January 2017
  • Representations claims resolved

    Société Générale has agreed to pay a US$50m civil penalty to the...

    Job Swaps    23 January 2017
  • Duration risk

    Rate rises hurt Fed's MBS book

    The December interest rate hike in the US reflected the increasing health of the economy, but it als...

    News Analysis    20 January 2017
  • FHFA seeks GSE mortgage feedback

    The FHFA is requesting public input on chattel loan pilot initiatives for Fannie Mae and Freddie Mac...

    News Round-up    19 January 2017
  • Market risk highlighted

    Fitch highlights Delft 2017 (SCI 12 January), which it hasn't rated, as an example of an RMBS that c...

    News Round-up    19 January 2017
  • Euro ABS/MBS accelerates

    Activity has accelerated in the European ABS/MBS secondary market after a slow start to the week. ...

    SCIWire    19 January 2017
  • Net negative

    GSE reform could have widespread impact

    Privatisation of Fannie Mae and Freddie Mac could have widespread negative consequences for the US R...

    News Analysis    19 January 2017
  • Modelling head named

    MSCI has recruited David Zhang as head of securitised products research. In this newly created role,...

    Job Swaps    18 January 2017
  • Euro secondary slow

    It's been slow start to the week so far for the European securitisation secondary markets. Partici...

    SCIWire    17 January 2017
  • Ratings suits settled

    The US Department of Justice, 21 states and the District of Columbia have reached a nearly US$864m s...

    Job Swaps    16 January 2017
  • SCI Start the Week - 16 January

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

    Pipeline There were a few more additions to the pipeline last week. The final count consisted of tw...

    News    16 January 2017
  • Flawed logic

    Regulators' confidence in extra ratings 'misplaced'

    The regulatory drive to require multiple ratings for European structured finance products may not ac...

    News Analysis    13 January 2017
  • Dutch non-conforming refi readied

    Morgan Stanley is in the market with the €157.7m Delft 2017, a Dutch non-conforming RMBS b...

    News    12 January 2017
  • Aussie auto outlook negative

    The performance of assets backing Australian auto ABS is negative, while the performance of mortgage...

    News Round-up    11 January 2017
  • Investment chief named

    Semper Capital Management has promoted Zach Cooper from deputy cio to cio, replacing Jay Menozzi, wh...

    Job Swaps    11 January 2017
  • FHA snips MIP

    The FHA will reduce the annual mortgage insurance premium (MIP) most borrowers must pay for 30-year...

    News    10 January 2017
  • Japan, China outlooks stable

    Moody's outlook for the performance of assets backing consumer-related ABS and RMBS in Japan is stab...

    News Round-up    10 January 2017
  • Euro secondary sporadic

    Activity remains sporadic across the European securitisation secondary market. ABS/MBS continues t...

    SCIWire    10 January 2017
  • SCI Start the Week - 9 January

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

    Pipeline The first week of the year brought a return to life for the pipeline. There were two new A...

    News    9 January 2017
  • STACR designations assigned

    All but six Freddie Mac STACR credit risk transfer bonds have received NAIC 1 designations for the 2...

    News Round-up    9 January 2017
  • Insurer inks rival buyout

    Arch Capital has completed its acquisition of United Guaranty Corporation (UGC) from Americ...

    Job Swaps    6 January 2017