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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).


  • CIRT programme diversifies

    Fannie Mae has completed its tenth Credit Insurance Risk Transfer (CIRT) transaction of 2016. For th...

    News Round-up    18 November 2016
  • RMBS, re-REMIC criteria updated

    Fitch has updated its criteria for analysing outstanding US RMBS and new and outstanding re-REMICs....

    News Round-up    17 November 2016
  • Euro ABS/MBS unchanged

    There's been little movement in the European ABS/MBS secondary market this week, so far. While sen...

    SCIWire    17 November 2016
  • Fresh faces

    New breed of RMBS issuer steps up

    A slew of issuance from private equity companies and other non-traditional issuers is changing the f...

    News Analysis    16 November 2016
  • Positive review after error

    Fitch has placed 12 classes of notes issued by Salisbury 2015-1 on rating watch positive. The move r...

    News Round-up    16 November 2016
  • UK inflation to affect ABS, RMBS

    Brexit-driven inflation in the UK will be credit negative for securitisations backed by mortgages, a...

    News Round-up    15 November 2016
  • GSE issuance calendars released

    Fannie Mae and Freddie Mac have released 2017 issuance calendars for the Connecticut Avenue Securiti...

    News Round-up    15 November 2016
  • Euro secondary softens

    Declines in the bond market have begun to feed into the European securitisation secondary market. ...

    SCIWire    15 November 2016
  • Dutch RMBS criteria tweaked

    Fitch has updated its criteria addendum for Netherlands residential mortgage assumptions. The change...

    News Round-up    14 November 2016
  • SCI Start the Week - 14 November

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

    Upcoming SCI event Panellists are being finalised for SCI's latest Capital Relief Trades Seminar, '...

    News    14 November 2016
  • GSE RPLs beating private-label

    Re-performing loans (RPLs) owned, guaranteed or securitised by Fannie Mae and Freddie Mac will conti...

    News Round-up    10 November 2016
  • Dutch arrears 'lowest since 2009'

    Dutch mortgages in late-stage arrears are at the lowest levels since 2009, due to an improved macroe...

    News Round-up    10 November 2016
  • BTL lending standards 'credit positive'

    The UK Prudential Regulation Authority's new lending standards should improve the credit quality of...

    News Round-up    10 November 2016
  • Spanish RPL correlation examined

    Default driver analysis for Spanish re-performing (RPL) loans shows a positive correlation between t...

    News Round-up    10 November 2016
  • Euro secondary stable

    The European securitisation secondary market remains stable despite wider market volatility. The c...

    SCIWire    10 November 2016
  • Simultaneous servicer ratings action

    Fitch has simultaneously affirmed and withdrawn Seneca's US RMBS servicer ratings. It has affirmed t...

    News Round-up    9 November 2016
  • Ocwen rankings affirmed

    Moody's has affirmed its master servicer assessment and servicer quality (SQ) assessments for Ocwen...

    News Round-up    9 November 2016
  • Reperforming loan bid wins

    Towd Point Master Funding (Cerberus) has been confirmed as the winning bidder on two pools of reperf...

    News Round-up    9 November 2016
  • Debut Italian RMBS priced

    Banca del Mezzogiorno has issued and retained its inaugural RMBS transaction, dubbed MCC RM...

    News Round-up    8 November 2016
  • HMBS disclosures enhanced

    Ginnie Mae is enhancing the disclosures relating to HECM reverse mortgage pools data in the existing...

    News Round-up    8 November 2016
  • Foreign national risks highlighted

    Mortgage loans made to foreign nationals in the US present some unique risks, Moody's notes. The age...

    News Round-up    8 November 2016