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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).


  • Positive sentiment?

    European ABS market update

    European ABS primary issuance is gaining momentum, as the second quarter begins. Indeed, the variety...

    Market Reports    2 April 2019
  • CEO appointed

    Sector developments and company hires

    CEO appointed Curtis Arledge has joined Mariner Investment Group as chairman and ceo. In addition...

    Market moves    28 March 2019
  • 'Constant demand'

    UK firms hiring across range of SF roles

    Hiring in the UK structured finance space has been buoyant in the last 12 months, with recruitment a...

    News Analysis    28 March 2019
  • Picking up pace

    European ABS market update

    European ABS secondary market activity has been relatively subdued so far this week. However, the pr...

    Market Reports    28 March 2019
  • STS firm announces debut deal

    Transaction marks second deal to receive STS label

    Prime Collateralised Securities (PCS) has announced its inaugural transaction to be verified as STS-...

    News    26 March 2019
  • Opening the box

    Non-QM sector continues to evolve

    The non-qualified mortgage RMBS sector has expanded faster than the other US RMBS sectors over the l...

    News Analysis    26 March 2019
  • Granite refinancing

    Sector developments and company hires

    Europe Muzinich & Co has hired Laurence Kubli as structured credit specialist with immedia...

    Market moves    25 March 2019
  • Purchase option to be exercised

    Sector developments and company hires

    EMEA Capzanine has appointed Renaud Tourmente as head of business development, effective from 6 M...

    Market moves    22 March 2019
  • Majority stake acquired

    Sector developments and company hires

    Balance sheet normalisation The US Fed has confirmed it intends to continue to allow its holdings o...

    Market moves    21 March 2019
  • ERM debut

    Seniors Money preps its return

    The first publicly rated securitisation of Irish and Spanish equity release mortgages (ERMs) has hit...

    News    20 March 2019
  • Holding tight

    Freddie Mac seeks to nurture investor base

    Retaining its European investor base, while capturing a broader range of institutional investors, is...

    News    20 March 2019
  • Latest podcast now available

    CRT themes and a Dutch RMBS first discussed

    In this month's podcast, we explore some interesting themes within the CRT market: namely,&a...

    News    15 March 2019
  • Unencumbered value

    Equity release RMBS on the cards?

    The UK mortgage market is changing, with an ageing population driving increased issuance of equity r...

    News Analysis    15 March 2019
  • Benchmark Sonia deal prepped

    Unique UK RMBS transaction adds momentum to IBOR transition

    The first third party hedged UK RMBS with Sonia-linked notes has been prepped by Principali...

    News    15 March 2019
  • Inaugural online auto ABS prepped

    Sector developments and company hires

    Online auto ABS debuts Carvana, an online platform for buying used cars launched in 2012 by DriveT...

    Market moves    15 March 2019
  • UMBS trades to be accepted

    Sector developments and company hires

    UMBS trades to be accepted In support of the Single Security Initiative, Fannie Mae will begin acc...

    Market moves    12 March 2019
  • Bright spot

    European ABS market update

    De Lage Landen’s newly mandated UK equipment lease ABS represents a bright spot in an othe...

    Market Reports    12 March 2019
  • R-PACE rulemaking proposals outlined

    Sector developments and company hires

    Credit line secured Foundation Home Loans has entered into a new £350m warehouse credit...

    Market moves    11 March 2019
  • Stronger tone

    European ABS spreads tighten but supply muted

    There is a stronger tone in the European ABS market overall and there has been spread tightening acr...

    Market Reports    8 March 2019
  • CDS reforms proposed

    Company hires and sector developments

    Australia Mortgage House has hired Steven Mixter as head of securitisation and structured finance....

    Market moves    7 March 2019
  • Dutch BTL debut in the works

    Growth of Dutch BTL sector set to continue

    Domivest is preparing the first securitisation backed entirely by Dutch residential buy-to-let mortg...

    News Analysis    5 March 2019