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


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).

  • Euro secondary unmoved

    The European securitisation secondary markets have been unmoved by recent broader market volatility....

    SCIWire    13 September 2016
  • Housing boost for Spain

    The bottoming-out of house prices in Spain will reduce the expected severity of mortgage defaults, r...

    News    13 September 2016
  • Ocwen fails two tests

    Ocwen failed two compliance tests in 4Q15 due to force-placed insurance, according to the latest US...

    News Round-up    12 September 2016
  • NPL portfolio on the block

    Freddie Mac is auctioning off a US$1.1bn portfolio of seasoned non-performing residential whole loan...

    News Round-up    12 September 2016
  • SCI Start the Week - 12 September

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

    Pipeline A flood of ABS and CMBS additions swelled the pipeline last week. There were 18 of the fo...

    News    12 September 2016
  • Cannibal territory?

    Covered bond growth poses threat to RMBS

    The pace of the ECB's investment in the ABSPP and CBPP3 appears to be slowing, yet the impact the pr...

    News Analysis    12 September 2016
  • Prepayment spikes

    Shift in focus for agency CRT investors?

    Investors in US agency credit risk transfer (CRT) RMBS are taking note of recent STACR prepayment sp...

    News Analysis    9 September 2016
  • MBS salesman suspended

    Kevin Blaney has agreed to pay a US$30,000 fine and serve a three-month suspension from association...

    Job Swaps    9 September 2016
  • Credit unions express CSP concerns

    The FHFA's planned Common Securitisation Platform (CSP) might have a negative impact on credit union...

    News Round-up    9 September 2016
  • 'Less risk' in marketplace RMBS

    Additional risks posed to RMBS issued by marketplace lenders (MPLs) will be mitigated by existing re...

    News Round-up    8 September 2016
  • Borrower profile lifted

    Caliber Home Loans is in the market with its latest non-prime RMBS - the US$216.97m COLT 2016-2. Ste...

    News Round-up    7 September 2016
  • Mortgage originations spike

    US mortgage origination figures hit a three-year high in Q2, with REO and short sales making up 7% o...

    News Round-up    7 September 2016
  • Four more NPL pools sold

    Fannie Mae has successfully offloaded another set of non-performing loans, it's seventh sale to date...

    News Round-up    7 September 2016
  • Euro secondary stays positive

    The positive tone continues across the European securitisation secondary market. Although...

    SCIWire    6 September 2016
  • Residential NPL sale announced

    The US Department of Housing and Urban Development (HUD) has announced another sale of non-performin...

    News Round-up    5 September 2016
  • RMBS hit by servicing transfer

    Moody's has placed the ratings of six certificates from five Mexican RMBS sponsored by Hipotecaria S...

    News Round-up    2 September 2016
  • Refi programmes 'credit positive'

    Fannie Mae and Freddie Mac's new refinancing option for borrowers with high LTV ratios is c...

    News Round-up    1 September 2016
  • Euro secondary stable

    The European securitisation secondary market remained stable throughout August and that looks unlike...

    SCIWire    1 September 2016
  • Second-loss CAS bonds rated

    Marking a first for the market, Fitch has assigned ratings to eight previously unrated M2 bonds from...

    News    31 August 2016
  • Colony offloads NPLs

    Colony Starwood Homes has sold a US$266m portfolio of 1,675 NPLs to an affiliate of Starwood Capital...

    News Round-up    31 August 2016
  • Coupon floor fix?

    Obvion is in the market with its latest Dutch prime RMBS - Storm 2016-II. Provisionally si...

    News    31 August 2016