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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).


  • Rate rises threaten RMBS performance

    Increased default risk for US RMBS is a potential result of the reduced mortgage prepayments expecte...

    News    27 January 2017
  • CA bringing RMBS 'first'

    Credit Agricole has mandated its first public French RMBS (see SCI's pipeline). It is Credit Agricol...

    News Round-up    27 January 2017
  • Placed issuance up

    €59bn of securitised product was issued in Europe in 4Q16, an increase of 26.9% from 3Q16...

    News Round-up    27 January 2017
  • CRT variances examined

    Fannie Mae's latest risk-sharing RMBS - the US$1.4bn CAS 2017-C01 - offered class 1B1 bond...

    News    26 January 2017
  • Non-prime issuance 'to double'

    Fitch suggests that 2017 could be a watershed year, with a more large-scale return of new US non-pri...

    News Round-up    26 January 2017
  • Extra RMBS cash set aside

    RBS is setting aside a further £3.1bn provision for various investigations and litigation m...

    Job Swaps    26 January 2017
  • Decree may impact RMBS

    Following recent court decisions, the Spanish government has announced a Royal Decree 1-2017, which...

    News Round-up    24 January 2017
  • Weak pools blunt Countrywide boost

    The positive credit effects of the US$7.35bn settlement proceeds distributed to outstanding Countryw...

    News Round-up    24 January 2017
  • Euro secondary still seeks supply

    Demand continues to outstrip supply in the European securitisation secondary market. Tone remains...

    SCIWire    24 January 2017
  • Dutch market strengthening

    The recent STORM 2017-I involved the sale of the largest publicly distributed senior Dutch RMBS tran...

    News    23 January 2017
  • SCI Start the Week - 23 January

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

    Pipeline There was a clear skew towards auto ABS additions for the pipeline last week. As...

    News    23 January 2017
  • CMBS pro named president

    ReadyCap Commercial has named Anuj Gupta as president, responsible for loan originations, affinity r...

    Job Swaps    23 January 2017
  • Representations claims resolved

    Société Générale has agreed to pay a US$50m civil penalty to the...

    Job Swaps    23 January 2017
  • Duration risk

    Rate rises hurt Fed's MBS book

    The December interest rate hike in the US reflected the increasing health of the economy, but it als...

    News Analysis    20 January 2017
  • FHFA seeks GSE mortgage feedback

    The FHFA is requesting public input on chattel loan pilot initiatives for Fannie Mae and Freddie Mac...

    News Round-up    19 January 2017
  • Market risk highlighted

    Fitch highlights Delft 2017 (SCI 12 January), which it hasn't rated, as an example of an RMBS that c...

    News Round-up    19 January 2017
  • Euro ABS/MBS accelerates

    Activity has accelerated in the European ABS/MBS secondary market after a slow start to the week. ...

    SCIWire    19 January 2017
  • Net negative

    GSE reform could have widespread impact

    Privatisation of Fannie Mae and Freddie Mac could have widespread negative consequences for the US R...

    News Analysis    19 January 2017
  • Modelling head named

    MSCI has recruited David Zhang as head of securitised products research. In this newly created role,...

    Job Swaps    18 January 2017
  • Euro secondary slow

    It's been slow start to the week so far for the European securitisation secondary markets. Partici...

    SCIWire    17 January 2017
  • Ratings suits settled

    The US Department of Justice, 21 states and the District of Columbia have reached a nearly US$864m s...

    Job Swaps    16 January 2017