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).


  • REMIC guidance provides clarity

    REMICs have long operated with only limited tax guidance, but two significant pieces of guidance hav...

    News    9 June 2016
  • Euro secondary stable

    The European securitisation secondary market continues to show stability. Secondary spreads across...

    SCIWire    9 June 2016
  • Euro secondary liquidity 'healthy'

    Around 80% of European ABS BWICs have successfully traded over the last year, a sign that liquidity...

    News    8 June 2016
  • Vacancy decline supporting SFR deals

    Nationwide rental vacancy in the US is presently 7%, down from 11% in 2009, according to the US Cens...

    News Round-up    8 June 2016
  • Russian regs choking issuance

    S&P expects Russian structured finance issuance to dampen for the rest of the year due to re...

    News Round-up    8 June 2016
  • Brazilian trustees feeling squeeze

    Smaller trustees will have to exit the Brazilian securitisation market or merge with larger competit...

    News Round-up    8 June 2016
  • UK BTL portfolio sale planned

    UKAR plans to follow last year's £13bn Granite portfolio sale (SCI 15 November 2015) with t...

    News    7 June 2016
  • REIT pro snapped up

    Hunton & Williams has hired Robert Smith as a partner to its real estate capital markets pra...

    Job Swaps    7 June 2016
  • Euro ABS/MBS defies concerns

    Steady primary supply and a firm European ABS/MBS secondary market are providing cause for optimism....

    SCIWire    7 June 2016
  • SCI Start the Week - 6 June

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

    Pipeline The holiday-shortened week resulted in a slowing of the pace of pipeline additions. As wel...

    News    6 June 2016
  • China RMBS steady so far

    Chinese RMBS has been performing well in its early stages, according to Fitch. This has been attribu...

    News Round-up    3 June 2016
  • Eight institutions settle RMBS claims

    The FDIC has achieved a US$190m settlement of certain RMBS claims with Barclays Capital, BNP Paribas...

    Job Swaps    3 June 2016
  • UK mortgage servicing to change

    The lack of growth in traditional third-party business for UK mortgage servicers will continue to dr...

    News Round-up    2 June 2016
  • Euro secondary stays positive

    The European securitisation secondary market is retaining its positive tone and momentum. Despite...

    SCIWire    2 June 2016
  • Alt-A recasts to test defaults

    The looming recast to full payment of principal and interest for the remaining interest-only Alt-A l...

    News Round-up    1 June 2016
  • Ginnie fraud settled

    California-based First Mortgage Corporation (FMC) and six of its senior executives have agreed to pa...

    Job Swaps    1 June 2016
  • Third community NPL pool sold

    Fannie Mae has auctioned off its latest community impact pool of non-performing loans to New Jersey...

    News Round-up    31 May 2016
  • Ex-SEC counsel joins law firm

    BakerHostetler has added Walter Van Dorn to its New York office as a partner. He was most recently a...

    Job Swaps    31 May 2016
  • Further Freddie NPLs auctioned

    Freddie Mac is auctioning off its third batch of NPLs this year, a US$783m collection of seasoned re...

    News Round-up    27 May 2016
  • Rochester notes sold off

    OneSavings Bank (OSB) is selling off its investment interest in the Rochester Financing 1 deal. Morg...

    News Round-up    27 May 2016
  • ACIS innovates again

    Freddie Mac has obtained its first Agency Credit Insurance Structure (ACIS) policy that transfers ri...

    News Round-up    26 May 2016