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).

  • UK NC clean-up calls considered

    UK non-conforming RMBS clean-up calls have long been considered out of the money options, but recent...

    News    6 March 2017
  • SCI Start the Week - 6 March

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

    Pipeline The volume of additions to the pipeline increased a little last week. There were eight new...

    News    6 March 2017
  • First ratings for AOMT non-prime RMBS

    Angel Oak is in the market with its first rated non-prime RMBS (see SCI's pipeline). As with the iss...

    News    3 March 2017
  • Proposed retention metric assessed

    Risk retention regulations in Europe and the US are severely flawed with respect to their key intent...

    News    1 March 2017
  • MSR transfers under scrutiny

    The purchase by non-banks of MSR portfolios from large US banks has ramped up in recent months, as t...

    News Analysis    1 March 2017
  • Trading expansion underlines optimism

    INTL FCStone's broker-dealer rates group has expanded its trading remit into US agency CMBS and a wi...

    News    28 February 2017
  • SCI Start the Week - 27 February

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

    Pipeline Additions to the pipeline last week were fairly steady compared to the week before, as the...

    News    27 February 2017
  • Galton debut 'weaker' than other prime RMBS

    GMRF Mortgage Acquisition Company is in the market with its first ever RMBS (see SCI's pipeline), fu...

    News    24 February 2017
  • Investment differentiation

    SCI's profile questions are answered by Triphonas Kyriakis, md for analytics at MSCI; Raghu Suryanar...

    Provider Profile    24 February 2017
  • Slow start to year 'not concerning' for Euro ABS

    The European securitisation market started the year with its traditional quiet January, but issuance...

    News Analysis    23 February 2017
  • Euro ABS/MBS edges in

    European ABS/MBS secondary spreads continue to edge in. "The market remains strong and well-suppor...

    SCIWire    23 February 2017
  • Ratings expansion outlined

    KBRA has named Jim Nadler ceo, with co-founder Jules Kroll stepping down from the position. The move...

    News    22 February 2017
  • SCI Start the Week - 20 February

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

    Pipeline There were eight ABS additions to the pipeline last week. These were joined by three RMBS...

    News    20 February 2017
  • Job swaps round-up - 17 February

    EuropeWells Fargo has hired Steve Hulett as head of credit and ABS sales EMEA. He was previously co-...

    Job Swaps    17 February 2017
  • Shift in NPL asset mix anticipated

    Loan disposals totalling €103.3bn were completed in Europe last year, with the number of o...

    News    16 February 2017
  • Euro RMBS volume builds

    Crédit Agricole has priced a rare publicly placed French prime RMBS named FCT Créd...

    News    16 February 2017
  • Euro ABS/MBS drifts

    The European ABS/MBS secondary market appears to be drifting along this week. Trading activity con...

    SCIWire    16 February 2017
  • Call for clarity around GSE reform guidelines

    Following US Treasury Secretary Mnuchin's commitment to reform the GSEs, the Mortgage Bankers Associ...

    News    14 February 2017
  • Euro secondary unchanged

    Activity in the European securitisation secondary market is little changed from that seen in recent...

    SCIWire    14 February 2017
  • SCI Start the Week - 13 February

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

    Pipeline The recent trend of ABS and RMBS dominating pipeline additions continued last week. There...

    News    13 February 2017
  • Positive start for Aussie issuance

    Bank of Queensland last week priced its upsized A$1bn Series 2017-1 REDS Trust prime RMBS, the first...

    News    13 February 2017