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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).


  • Bank servicers slim down

    Falling portfolio volumes and improved loan performance is leading to staff cuts at US bank mortgage...

    News Round-up    4 October 2016
  • Spanish re-performing deal prepped

    Blackstone affiliate Spain Residential Finance is in the market with the €265m SRF 2016-1...

    News Round-up    4 October 2016
  • Real estate team poached

    Sidley Austin has added a trio of partners to its real estate practice in New York. Steven Koppel, A...

    Job Swaps    30 September 2016
  • Indian MBS PTCs surge

    The surge in securitisation activity in India last year has continued into 1Q16, boosted by renewed...

    News Round-up    29 September 2016
  • STACR liquidity boost

    Fitch recently assigned ratings to seven previously unrated notes from seven Freddie Mac STACR RMBS...

    News    29 September 2016
  • Euro ABS/MBS keeps steady

    It continues to be a steady week in the European ABS/MBS secondary market. The run in to month end...

    SCIWire    29 September 2016
  • Ex-RMBS trader suspended

    The US SEC has instituted public administrative and cease-and-desist proceedings against Nicholas Bo...

    Job Swaps    28 September 2016
  • RMBS downgraded on weak performance

    Fitch has downgraded 14 tranches and affirmed 16 tranches across four TDA RMBS and Santander Hipotec...

    News Round-up    28 September 2016
  • Japan RMBS performance 'strong'

    Japanese RMBS performance remained strong in 2Q16 and was unaffected by the Kumamoto earthquake, rep...

    News Round-up    28 September 2016
  • NCUA suits resolved

    RBS has reached a final settlement with the NCUA to resolve two outstanding civil lawsuits for US$1....

    Job Swaps    28 September 2016
  • Fifth community impact NPL pool sold

    Fannie Mae has successfully sold its fifth community impact pool of NPLs. The winning bidder on the...

    News Round-up    28 September 2016
  • Flow-basis deal debuts

    Freddie Mac is rolling out a new front-end credit risk transfer offering dubbed Freddie Mac Deep MI...

    News Round-up    27 September 2016
  • Treasure hunt

    Investors seek other assets as UK RMBS shrinks

    The UK RMBS universe is set to shrink throughout 2016, exacerbated by limited supply and the redempt...

    News Analysis    27 September 2016
  • Euro ABS/MBS starts slowly

    The European ABS/MBS secondary market has started the week slowly. Softer broader markets meant a...

    SCIWire    27 September 2016
  • SCI Start the Week - 26 September

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

    Pipeline Pipeline activity seemed elevated again last week. There were eight new ABS added, along...

    News    26 September 2016
  • Chinese NPL trio prepped

    Three Chinese issuers are in the market with NPL securitisations (see SCI pipeline). One of them &am...

    News Round-up    26 September 2016
  • Mexican RMBS ratings amended

    Moody's has changed the ratings on several Mexican RMBS transactions to reflect a correction to its...

    News Round-up    23 September 2016
  • Bank shuffles SF pros

    Credit Suisse has made a series of changes to its asset finance team, with a number of structured fi...

    Job Swaps    23 September 2016
  • Settlement talks watched closely

    Final settlements reached by European banks with the US Department of Justice (DoJ) for the issuance...

    News Round-up    22 September 2016
  • Record involvement for new CIRTs

    Fannie Mae has completed two more credit insurance risk transfer (CIRT) transactions, worth US$14.4b...

    News Round-up    22 September 2016
  • GS meeting settlement requirements

    Goldman Sachs is meeting its consumer relief requirements as part of its US$5bn RMBS settlement, say...

    News Round-up    21 September 2016