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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).


  • Swapless Dutch RMBS concerns raised

    Dutch RMBS featuring a partial interest rate hedge will face increased risk of interest rate shortfa...

    News Round-up    13 December 2016
  • Liquidation timelines 'declining'

    Liquidation timelines on defaulted US mortgage loans appear to have peaked, Fitch comments. While th...

    News Round-up    13 December 2016
  • Euro ABS/MBS ticks over

    The European ABS/MBS secondary market continues to tick over. As with the previous week it's been...

    SCIWire    13 December 2016
  • RMBS trader accused of fraud

    A federal grand jury in New Haven has returned an indictment charging former Cantor Fitzgerald bond...

    Job Swaps    12 December 2016
  • SCI Start the Week - 12 December

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

    PipelinePipeline entrants were mixed last week. Three ABS, four CMBS and two RMBS were newly announc...

    News    12 December 2016
  • Odd-lot strategies

    Price exploitation likely more widespread

    The US SEC recently fined PIMCO US$20m for misleading investors about the value of MBS odd lots in i...

    News Analysis    12 December 2016
  • First CSP release rolled out

    Freddie Mac has implemented the Common Securitization Platform (CSP) for certain single-family fixed...

    News Round-up    9 December 2016
  • RMBS proposals praised

    A new R&W form and a common communication platform between investors and issuers proposed by...

    News Round-up    8 December 2016
  • Disease insurance 'credit positive'

    A growing proportion of mortgages backing Japanese bank-issued RMBS include specified disease insura...

    News Round-up    8 December 2016
  • Euro secondary keeps positive

    Tone across the European securitisation secondary market continues to be positive. After a quiet s...

    SCIWire    8 December 2016
  • Mortgage-linked ABS prepped

    The £292.4m Towd Point Mortgage Funding 2016-Granite 3 has hit the market. The transaction...

    News Round-up    7 December 2016
  • RMBS 'to perform well' in 2017

    US RMBS will continue to perform well in 2017, with several trends from 2016 continuing int...

    News Round-up    7 December 2016
  • Arrow enters Italian market

    Arrow Global Group is entering the Italian market with the acquisition of Zenith Service. It will pu...

    Job Swaps    6 December 2016
  • North American outlook 'stable'

    Stability will likely remain for structured finance ratings in the US and Canada next year,...

    News Round-up    6 December 2016
  • CAS listings heading east

    Fannie Mae has listed all of its previously-issued Connecticut Avenue Securities on the Singapore Ex...

    News Round-up    6 December 2016
  • LatAm outlook 'stable'

    Latin American structured finance transactions should enjoy a stable credit environment next year, d...

    News Round-up    6 December 2016
  • Euro secondary quiet

    The European securitisation secondary market has had another quiet start to the week. Italy was un...

    SCIWire    6 December 2016
  • Chinese CLO outlook 'negative'

    The performance of assets backing Chinese auto loan ABS and RMBS will be stable throughout 2017, but...

    News Round-up    5 December 2016
  • SCI Start the Week - 5 December

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

    SCI content this week is sponsored by BNY Mellon. All content this week is being made available free...

    News    5 December 2016
  • New entrants to boost issuance

    Moody's anticipates a slight increase in issuance of European ABS and RMBS next year. The agency exp...

    News Round-up    2 December 2016
  • STACR listings to be pulled

    Freddie Mac will request that its STACR debt notes, as well as debt securities and mortgage securiti...

    News Round-up    1 December 2016