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).


  • Multi-borrower SFR loan transferred

    The US$4m Delavaco loan, securitised in FirstKey 2015-SFR1, has been transferred to special servicin...

    News Round-up    17 October 2016
  • SCI Start the Week - 17 October

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

    Pipeline The long list of additions to the pipeline last week was once more driven by auto ABS. The...

    News    17 October 2016
  • Recovery rates set to improve

    Securities backed by defaulted Italian mortgage loans may benefit from legislation aimed at expediti...

    News Round-up    14 October 2016
  • Risk-transfer re-REMIC announced

    The first-ever re-REMIC securitising GSE credit risk-transfer securities has hit the market. The US$...

    News Round-up    14 October 2016
  • Euro RMBS shelves debut

    The inaugural rated deals from two new European RMBS programmes have been announced. Both platforms...

    News    13 October 2016
  • Model-implied tool launched

    Fitch has launched a new online tool that will enable investors to conduct their own model-implied r...

    News Round-up    13 October 2016
  • Euro ABS/MBS active

    The European ABS/MBS secondary market is staying active this week. "The busy primary market is tak...

    SCIWire    13 October 2016
  • Data error reviewed

    Moody's has placed the ratings of eight tranches from four RMBS issued by Nationstar HECM Loan Trust...

    News Round-up    12 October 2016
  • Reperforming loans up for bid

    Fannie Mae has begun marketing its first sale of reperforming loans, as part of its ongoing effort t...

    News Round-up    12 October 2016
  • Euro secondary solid

    The European securitisation secondary market remains solid in the face of strong supply. Yesterday...

    SCIWire    11 October 2016
  • Canadian housing data prioritised

    In its 2016-2020 Corporate Plan, the Canada Mortgage and Housing Corp (CMHC) prioritised identifying...

    News Round-up    10 October 2016
  • Seller-financed deal debuts

    Amherst is in the market with its inaugural single-family rental securitisation, dubbed AMSR 2016-SF...

    News    6 October 2016
  • Citi settlement payouts due

    RMBS trustees involved in the US$1.125bn Citi R&W settlement received IRS approval last mont...

    Job Swaps    6 October 2016
  • NPL offerings auctioned

    Freddie Mac has sold via auction 5,364 deeply delinquent non-performing loans from its mortgage-rela...

    News Round-up    6 October 2016
  • Euro ABS/MBS picks up

    Activity in the European ABS/MBS secondary market is picking up. "There's a fair bit of primary su...

    SCIWire    6 October 2016
  • RBS fined over RMBS

    RBS has been fined US$120m by the state of Connecticut in relation to malpractice in the run-up to t...

    News Round-up    4 October 2016
  • Bank servicers slim down

    Falling portfolio volumes and improved loan performance is leading to staff cuts at US bank mortgage...

    News Round-up    4 October 2016
  • Spanish re-performing deal prepped

    Blackstone affiliate Spain Residential Finance is in the market with the €265m SRF 2016-1...

    News Round-up    4 October 2016
  • Real estate team poached

    Sidley Austin has added a trio of partners to its real estate practice in New York. Steven Koppel, A...

    Job Swaps    30 September 2016
  • Indian MBS PTCs surge

    The surge in securitisation activity in India last year has continued into 1Q16, boosted by renewed...

    News Round-up    29 September 2016
  • STACR liquidity boost

    Fitch recently assigned ratings to seven previously unrated notes from seven Freddie Mac STACR RMBS...

    News    29 September 2016