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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).


  • Jumbo RMBS 'could see growth'

    Should lenders start offering jumbo mortgages to a greater number of creditworthy borrowers, the US...

    News Round-up    2 November 2016
  • Euro secondary patchy

    Activity in the European securitisation secondary market continues to be patchy. After a primarily...

    SCIWire    2 November 2016
  • GSEs announce validation frameworks

    Both Fannie Mae and Freddie Mac have announced new validation tools aimed at making the mortgage ori...

    News    1 November 2016
  • Loan repurchase planned

    Banca Popolare di Vicenza (BPVi) and Banca Nuova (BN) are set to repurchase on 1 November all the lo...

    News Round-up    31 October 2016
  • Leek redemption due

    UK non-conforming RMBS Leek Finance Number 18 is set to be redeemed on 21 December, five years after...

    News Round-up    31 October 2016
  • SCI Start the Week - 31 October

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

    Pipeline As with the preceding week, last week's additions to the pipeline were relatively modest....

    News    31 October 2016
  • Deleveraging programme completed

    Permanent TSB has finalised the sale of £2.29bn worth of loans by its UK subsidiary, Landsd...

    News Round-up    28 October 2016
  • Above par pricing anticipated

    Achmea Bank is in the market with its second swapless RMBS. The €690.5m Dutch Residential...

    News Round-up    27 October 2016
  • Spanish special servicers 'key'

    Loss severities on Spanish mortgage foreclosures have increased again this year, says Fitch, despite...

    News Round-up    27 October 2016
  • SFR refi incentive boosted

    Total home equity has increased by 27% since issuance across the 71,955 properties underlying the 18...

    News    27 October 2016
  • Euro ABS/MBS quiet

    This week has continued to be slow across the European ABS/MBS secondary market. "There's nothing...

    SCIWire    27 October 2016
  • Aussie CMBS has RMBS elements

    Think Tank Group is in the market with a CMBS deal which includes features more typically found in R...

    News Round-up    26 October 2016
  • UKAR sells as BAWAG preps

    UKAR has launched the sales process for the Bradford & Bingley assets. Coinciding with the a...

    News Round-up    26 October 2016
  • Russian RMBS risks recognised

    High LTV Russian RMBS loans are twice as likely to default as lower LTV loans, says Moody's. There a...

    News Round-up    26 October 2016
  • Loan origination tool enhanced

    Freddie Mac is set to add new capabilities to its Loan Advisor Suite in the spring. The GSE says tha...

    News Round-up    25 October 2016
  • New CIRT structure trialled

    Fannie Mae has secured commitments for a new front-end credit insurance risk transfer (CIRT) structu...

    News Round-up    25 October 2016
  • Euro secondary starts slow

    It was a slow start to the week in the European securitisation secondary market, but a large CDO liq...

    SCIWire    25 October 2016
  • SCI Start the Week - 24 October

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

    Pipeline The balance appeared to shift last week, as fewer deals joined the pipeline and far more d...

    News    24 October 2016
  • SFIG files CRT opinions

    SFIG has responded to the FHFA's request for information on Fannie Mae and Freddie Mac's credit risk...

    News Round-up    21 October 2016
  • Japan condo payments 'positive'

    The high loan prepayment rate for condominiums backing Japanese RMBS is credit positive for the asse...

    News Round-up    20 October 2016
  • Euro secondary unmoved

    The European securitisation secondary market remains unmoved by continuing strong new issue volumes....

    SCIWire    20 October 2016