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).

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    News    1 August 2017
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    Pipeline The rate of pipeline additions stayed consistent last week. There were six new ABS, five R...

    News    31 July 2017
  • Job swaps round-up - 28 July

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    Job Swaps    28 July 2017
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    News Analysis    27 July 2017
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    SCIWire    27 July 2017
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    News    25 July 2017
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    News    24 July 2017
  • SCI Start the Week - 24 July

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

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    News    24 July 2017
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    Job Swaps    21 July 2017
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  • SCI Start the Week - 17 July

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    Pipeline Pipeline activity stepped up again last week. The additions consisted of eight ABS, an I...

    News    17 July 2017
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