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).


  • Investors rally to Ocwen

    RMBS investors in deals serviced by Ocwen are holding meetings in the wake of the publication of an...

    News    10 August 2016
  • Investment property underwriting eyed

    Investment property mortgages underwritten to property cashflows pose unique risks relative to simil...

    News Round-up    10 August 2016
  • MI cancellation rates examined

    Mortgage insurance (MI) cancellation rates across GSE credit risk transfer (CRT) RMBS remain low, ac...

    News Round-up    10 August 2016
  • MSR partnership inked

    New Residential Investment Corp and Walter Investment Management Corp have entered into a strategic...

    Job Swaps    10 August 2016
  • CFPB issues final rule on servicing

    The CFPB has amended its mortgage servicing rules to ensure mortgage servicers treat homeowners and...

    News Round-up    8 August 2016
  • MSR pro picked up

    Incenter has hired capital markets expert Al Qureshi as md, analytics, to build upon its existing mo...

    Job Swaps    8 August 2016
  • SCI Start the Week - 8 August

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

    Pipeline A further 11 deals joined the pipeline last week. This was split into three ABS, three RMB...

    News    8 August 2016
  • REIT reduces RMBS footprint

    Five Oaks Investment Corp disclosed in its latest 8K filing that it has reduced the aggregate capaci...

    News Round-up    5 August 2016
  • MBS vet joins Nathan Hale

    Nathan Hale Capital has boosted its capital markets division with the appointment of Kurt Weisenfluh...

    Job Swaps    5 August 2016
  • RMBS compare tool debuts

    Fitch has introduced a data comparison tool for US RMBS, which encapsulates all of its US residentia...

    News Round-up    5 August 2016
  • COLT confidence

    Rated non-prime RMBS shifts market dynamics

    The issuance of Lone Star Fund's COLT 2016-1 in June marked a turning point for the US non-prime RMB...

    News Analysis    5 August 2016
  • Demand expected for jumbo Hawksmoor

    Initial price thoughts have been released for the first post-Brexit UK non-conforming RMBS, Hawksmoo...

    News    4 August 2016
  • Spanish NPL portfolios purchased

    Bain Capital has acquired three Spanish NPL portfolios for €1.15bn, extending the firm's h...

    News Round-up    4 August 2016
  • PACE acceptance is 'ABS positive'

    The Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) are to being to ins...

    News Round-up    3 August 2016
  • Condominium price surge 'positive'

    Moody's says that rising condominium prices is positive for Japanese RMBS as it will increase recove...

    News Round-up    3 August 2016
  • RFC issued on PO strip ratings

    S&P is requesting comments on its proposed approach for the surveillance of ratings...

    News Round-up    3 August 2016
  • Aussie metrics approach crisis levels

    Delinquencies for Australian auto loan ABS and prime RMBS have risen steadily over the five months t...

    News Round-up    3 August 2016
  • Pay-outs prompt potential upgrades

    S&P has placed 310 classes from 111 US RMBS deals on credit watch with positive implications...

    News Round-up    2 August 2016
  • Loss risk improves for GSE CRTs

    Expected mortgage losses on seasoned GSE CRT transactions are trending positively, says Fitch. The l...

    News Round-up    2 August 2016
  • SCI Start the Week - 1 August

    A look at the major activity in structured finance over the past seven days. Print last week's news ...

    Pipeline The final week of July brought six new ABS deals to the pipeline, as well as two CMBS and...

    News    1 August 2016
  • REIT cuts securitisation business

    The board of directors of Two Harbors Investment Corp has approved a plan to discontinue the company...

    Job Swaps    29 July 2016