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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).


  • MBS salesman suspended

    Kevin Blaney has agreed to pay a US$30,000 fine and serve a three-month suspension from association...

    Job Swaps    9 September 2016
  • Credit unions express CSP concerns

    The FHFA's planned Common Securitisation Platform (CSP) might have a negative impact on credit union...

    News Round-up    9 September 2016
  • 'Less risk' in marketplace RMBS

    Additional risks posed to RMBS issued by marketplace lenders (MPLs) will be mitigated by existing re...

    News Round-up    8 September 2016
  • Borrower profile lifted

    Caliber Home Loans is in the market with its latest non-prime RMBS - the US$216.97m COLT 2016-2. Ste...

    News Round-up    7 September 2016
  • Mortgage originations spike

    US mortgage origination figures hit a three-year high in Q2, with REO and short sales making up 7% o...

    News Round-up    7 September 2016
  • Four more NPL pools sold

    Fannie Mae has successfully offloaded another set of non-performing loans, it's seventh sale to date...

    News Round-up    7 September 2016
  • Euro secondary stays positive

    The positive tone continues across the European securitisation secondary market. Although...

    SCIWire    6 September 2016
  • Residential NPL sale announced

    The US Department of Housing and Urban Development (HUD) has announced another sale of non-performin...

    News Round-up    5 September 2016
  • RMBS hit by servicing transfer

    Moody's has placed the ratings of six certificates from five Mexican RMBS sponsored by Hipotecaria S...

    News Round-up    2 September 2016
  • Refi programmes 'credit positive'

    Fannie Mae and Freddie Mac's new refinancing option for borrowers with high LTV ratios is c...

    News Round-up    1 September 2016
  • Euro secondary stable

    The European securitisation secondary market remained stable throughout August and that looks unlike...

    SCIWire    1 September 2016
  • Second-loss CAS bonds rated

    Marking a first for the market, Fitch has assigned ratings to eight previously unrated M2 bonds from...

    News    31 August 2016
  • Colony offloads NPLs

    Colony Starwood Homes has sold a US$266m portfolio of 1,675 NPLs to an affiliate of Starwood Capital...

    News Round-up    31 August 2016
  • Coupon floor fix?

    Obvion is in the market with its latest Dutch prime RMBS - Storm 2016-II. Provisionally si...

    News    31 August 2016
  • Ocwen settles offshore charges

    Ocwen Loan Servicing has agreed to pay a US$900,000 settlement fee over allegations that it used off...

    Job Swaps    30 August 2016
  • NPL RMBS tranche pays off

    The first Fitch-rated post-crisis RMBS tranche backed partly by NPLs has paid off. The single-A rate...

    News Round-up    30 August 2016
  • HLTV refinance programme planned

    Fannie Mae and Freddie Mac are set to implement next year a new refinance offering aimed at borrower...

    News    26 August 2016
  • British steel

    Rate cut troubles for UK RMBS overstated?

    The Bank of England's decision to cut interest rates earlier this month was widely viewed as positiv...

    News Analysis    25 August 2016
  • Non-QM RMBS closed

    Angel Oak Capital Advisors has completed its second RMBS backed primarily by non-qualified mortgages...

    News Round-up    24 August 2016
  • Liquidity warning issued

    KBRA is calling for regulators and policymakers to take notice of dwindling liquidity and capital to...

    News Round-up    24 August 2016
  • Aire Valley redemptions due

    UKAR last week issued refinancing notices for Aire Valley Mortgages series 2004-1, 2005-1, 2006-1 an...

    News Round-up    22 August 2016