Structured Credit Investor


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).

  • MSR portfolio sold

    First South Bank has purchased a US$84.6m mortgage servicing rights portfolio from Freddie Mac and F...

    News Round-up    26 July 2016
  • CRT ratings bolstered

    Fitch has taken various positive rating actions on 152 classes from 26 GSE credit risk-sharing (CRT)...

    News Round-up    26 July 2016
  • Call for claims issued

    The administrator of the Credit Suisse Bulk Settlement Practice (BSP) Fair Fund has called for eligi...

    Job Swaps    26 July 2016
  • Euro secondary slow

    The summer slowdown is manifesting itself across the bulk of the European securitisation secondary m...

    SCIWire    26 July 2016
  • Capital markets pro tapped

    LeaderOne Financial has hired Todd Leddon as svp of capital markets. In the role, he will focus on i...

    Job Swaps    25 July 2016
  • SCI Start the Week - 25 July

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

    Pipeline Last week's pipeline activity was largely in line with the week before it. There were four...

    News    25 July 2016
  • Indian lending risks outlined

    The underwriting practices of lenders will be vital to controlling credit risk in Indian affordable...

    News Round-up    25 July 2016
  • Placed issuance up

    €74.5bn of securitised product was issued in Europe in 2Q16, according to AFME's latest da...

    News Round-up    22 July 2016
  • Negative coupon impact examined

    About 190 rated European RMBS and ABS tranches had coupons at negative levels, as of 1Q16, Moody's r...

    News Round-up    21 July 2016
  • Deal agents to benefit weaker RMBS

    The inclusion of deal agents is credit positive for future US RMBS transactions, Moody's says. Deal...

    News Round-up    21 July 2016
  • Volume growing

    ABS issuance heading up Down Under

    Australian primary ABS issuance has climbed steadily since 2008 - with a brief dip in 2012...

    News Analysis    21 July 2016
  • Euro secondary firm

    Spreads across the European securitisation secondary market are remaining firm. Wider market posit...

    SCIWire    21 July 2016
  • Granite sale examined

    The UK National Audit Office (NAO) has praised the British government for its £13.3bn sale...

    News Round-up    20 July 2016
  • Spanish full-recourse eyed

    Conditions that guarantee the payment of a Spanish mortgage loan if the sale of the property at auct...

    News Round-up    20 July 2016
  • Aussie merger agreed

    Homeloans has entered into a scheme implementation agreement (SIA) with RESIMAC, which provides for...

    Job Swaps    20 July 2016
  • Clydesdale braves Brexit uncertainty

    Clydesdale is in the market with the UK's first post-Brexit vote RMBS. The Lanark 2016-1 transaction...

    News Round-up    20 July 2016
  • RMBS originator pays to settle

    Syncora Guarantee has settled a dispute with an originator of an RMBS for a cash payment of US$40m....

    News Round-up    19 July 2016
  • SCI Start the Week - 18 July

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

    Pipeline Last week's pipeline additions included a decent mix of MBS names. In the end there were s...

    News    18 July 2016
  • FNMA completes NPL sale

    Fannie Mae has completed its sixth NPL sale, this time consisting of around 9,300 loans totalling US...

    News Round-up    15 July 2016
  • Euro secondary stays light

    Flows in the European securitisation secondary market continue to be light though sentiment remains...

    SCIWire    14 July 2016
  • Progress 2014-SFR1 to prepay

    Progress Residential plans to prepay the US$465.9m loan that serves as collateral for the Progress 2...

    News Round-up    12 July 2016