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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).


  • 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
  • SCI Start the Week - 22 August

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

    Pipeline The outstanding deal pipeline has shrunk significantly over the past few weeks as the year...

    News    22 August 2016
  • RMBS sales, trading teams bolstered

    Hilltop Securities has made a string of changes to its RMBS trading and sales group in its New York,...

    Job Swaps    19 August 2016
  • Ex-Goldman trader barred

    The US SEC has barred a former Goldman Sachs RMBS trader from the securities industry after he was f...

    Job Swaps    17 August 2016
  • JPMorgan settlement approved

    The US$4.5bn JPMorgan RMBS settlement was last week approved by the court, which overruled the final...

    Job Swaps    17 August 2016
  • United Guaranty sale agreed

    Arch Capital Group is set to acquire United Guaranty Corporation and United Guaranty Insurance from...

    Job Swaps    16 August 2016
  • Chinese RMBS approach published

    Moody's has published its approach to rating Chinese RMBS using the MILAN framework. The agency will...

    News Round-up    16 August 2016
  • NPL RMBS approach finalised

    Fitch has finalised its approach for rating RMBS backed by non-performing loans, which leverages its...

    News Round-up    15 August 2016
  • Residential delinquencies at decade low

    The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased by 11bp...

    News Round-up    12 August 2016
  • Ocwen upgraded to 'average'

    S&P has raised its overall rankings on Ocwen Loan Servicing from below average to average as...

    News Round-up    12 August 2016
  • CRT ratings upgraded

    Moody's has upgraded the ratings of 22 tranches from four credit risk transfer RMBS backed by confor...

    News Round-up    12 August 2016
  • FNMA markets more NPLs

    Fannie Mae is marketing its latest batch of NPLs, including the fifth community impact pool that the...

    News Round-up    11 August 2016
  • Morgan Stanley begins RMBS payments

    Morgan Stanley has begun fulfilling its consumer relief obligations under the terms of its settlemen...

    News Round-up    11 August 2016
  • Investors rally to Ocwen

    RMBS investors in deals serviced by Ocwen are holding meetings in the wake of the publication of an...

    News    10 August 2016
  • Investment property underwriting eyed

    Investment property mortgages underwritten to property cashflows pose unique risks relative to simil...

    News Round-up    10 August 2016
  • MI cancellation rates examined

    Mortgage insurance (MI) cancellation rates across GSE credit risk transfer (CRT) RMBS remain low, ac...

    News Round-up    10 August 2016
  • MSR partnership inked

    New Residential Investment Corp and Walter Investment Management Corp have entered into a strategic...

    Job Swaps    10 August 2016
  • CFPB issues final rule on servicing

    The CFPB has amended its mortgage servicing rules to ensure mortgage servicers treat homeowners and...

    News Round-up    8 August 2016
  • MSR pro picked up

    Incenter has hired capital markets expert Al Qureshi as md, analytics, to build upon its existing mo...

    Job Swaps    8 August 2016
  • SCI Start the Week - 8 August

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

    Pipeline A further 11 deals joined the pipeline last week. This was split into three ABS, three RMB...

    News    8 August 2016
  • REIT reduces RMBS footprint

    Five Oaks Investment Corp disclosed in its latest 8K filing that it has reduced the aggregate capaci...

    News Round-up    5 August 2016