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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    The US FHFA has released its first report covering the progress and results from Fannie Mae and Fred...

    News Round-up    4 July 2016
  • Florida NPLs sold

    Freddie Mac is continuing its bulk offloading of NPLs, with its latest auction seeing it sell a comb...

    News Round-up    4 July 2016
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    Holders of 512 legacy Countrywide deals receiving allocated shares of US$7.7bn in settlement proceed...

    News    1 July 2016
  • Brexit MSR impact weighed

    The UK's vote to leave the EU last week could hurt valuations for some US residential mortgage servi...

    News Round-up    1 July 2016
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    Fitch has downgraded 18 tranches, and placed another two on rating watch negative, from six transact...

    News Round-up    1 July 2016
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    Freddie Mac has recorded its largest purchase to date under its Agency Credit Insurance Structure pr...

    News Round-up    1 July 2016
  • Chinese RMBS announced

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    News Round-up    1 July 2016
  • New York foreclosure boost

    New York Governor Andrew Cuomo last week signed a series of laws that could have a sweeping impact o...

    News    1 July 2016
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    Freddie Mac is offering its first structured sale of seasoned loans by offloading a US$199m pilot de...

    News Round-up    30 June 2016
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    Scope Corporation is set to acquire FERI EuroRating Services, effective from the start of August. Th...

    Job Swaps    30 June 2016
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    The US FHFA is seeking input in response to two new reports it has released on Fannie Mae a...

    News Round-up    30 June 2016
  • Euro ABS/MBS normalising

    European ABS and MBS have been quick to shrug off Brexit worries, with activity building up again th...

    SCIWire    30 June 2016
  • Settlement reinvestment options weighed

    Current holders of non-agency RMBS from 512 Countrywide deals have finally received almost US$8bn in...

    News    29 June 2016
  • SF upgrades keep momentum

    The global structured finance upgrade rate reached a record high in 2015, according to S&P....

    News Round-up    28 June 2016
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    Fitch has commented on the proposed representations and warranties (R&Ws) included in the St...

    News Round-up    28 June 2016
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    News Round-up    28 June 2016
  • Euro secondary sidelined

    Most participants are waiting on the sidelines in the European securitisation secondary market amid...

    SCIWire    28 June 2016
  • MBIA-wrapped RMBS hit

    S&P has lowered its ratings on 112 classes from 58 US RMBS transactions. The affected securi...

    News Round-up    27 June 2016
  • GSE risk model update praised

    Fannie Mae last week announced an update to its credit risk assessment model, Desktop Under...

    News Round-up    27 June 2016
  • SCI Start the Week - 27 June

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

    Pipeline Pipeline additions were limited last week. The only ABS was €1bn Silver Arrow...

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