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).

  • Interest deferral supports Spanish RMBS

    Performance among S&P-rated Spanish RMBS has improved over the past 24 months, with the agen...

    News Round-up    21 June 2016
  • Euro secondary solid

    The European securitisation secondary market remains solid ahead of Thursday's UK EU referendum. T...

    SCIWire    21 June 2016
  • Trading head switches to rival

    Mehdi Kasani has joined BNP Paribas to head its European ABS trading team, based in London. He joins...

    Job Swaps    20 June 2016
  • SCI Start the Week - 20 June

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

    Pipeline The industry conference in Barcelona reduced primary market activity last week. There were...

    News    20 June 2016
  • MERS set for 'modernisation'

    ICE is set to acquire a majority equity position in MERSCORP Holdings, owner of Mortgage Electronic...

    Job Swaps    20 June 2016
  • NPL sale announced

    Fannie Mae has announced its latest sale of non-performing loans, including the fourth community imp...

    News Round-up    17 June 2016
  • MBIA Corp liquidity warning

    S&P has lowered its financial strength rating on MBIA Insurance Corp to triple-C from single...

    News Round-up    17 June 2016
  • Risk transfer trio closed

    Fannie Mae last month completed three credit insurance risk transfer (CIRT) deals, continuing its ef...

    News Round-up    17 June 2016
  • Director duo appointed

    New York Mortgage Trust has appointed Kevin Donlon and Michael Clement as directors, with the latter...

    Job Swaps    17 June 2016
  • Hatteras tender extended

    Annaly Capital Management has extended its previously announced exchange offer to purchase all of th...

    Job Swaps    16 June 2016
  • SCI Start the Week - 13 June

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

    Pipeline The total number of deals joining the pipeline remained consistent last week, although ABS...

    News    13 June 2016
  • BTL stampede

    Loan issuance surges ahead of tax deadline

    Buy-to-let (BTL) lending in the UK surged in the weeks leading up to the recent stamp duty changes,...

    News Analysis    10 June 2016
  • Non-prime RMBS debuts

    Caliber Home Loans is in the market with the first post-crisis RMBS backed by newly originated non-p...

    News    10 June 2016
  • 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