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).


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    News Round-up    28 July 2016
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    News Round-up    28 July 2016
  • Foreign policy

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    News Analysis    27 July 2016
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  • Debut sale for structured loans

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    News Round-up    27 July 2016
  • MSR portfolio sold

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    News Round-up    26 July 2016
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    News Round-up    26 July 2016
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    SCIWire    26 July 2016
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    Job Swaps    25 July 2016
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    News Round-up    25 July 2016
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    €74.5bn of securitised product was issued in Europe in 2Q16, according to AFME's latest da...

    News Round-up    22 July 2016
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    News Round-up    21 July 2016
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    News Round-up    21 July 2016
  • Volume growing

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    News Analysis    21 July 2016
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