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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).


  • Counterintuitive results

    EBA consultation incentivises unfunded SRT format

    The EBA’s consultation on the determination of the weighted average maturity of a securiti...

    News Analysis    23 August 2019
  • Red ahead

    Non-resident Aussie RMBS hits the market

    Columbus Capital is prepping a rare Australian RMBS backed by fully amortising (accounting for 86.1%...

    News    20 August 2019
  • CLO ESG impact assessed

    Sector developments and company hires

    ESG impact assessed The credit impact of environmental, social and governance (ESG) investment cri...

    Market moves    19 August 2019
  • Whole biz downgrade announced

    Company developments and company hires

    Acquisitions Crescent Capital BDC is set to acquire Alcentra Capital Corp, a middle-market BDC. Th...

    Market moves    16 August 2019
  • Brexit impact gauged

    UK ABS expected to withstand no-deal

    A no-deal Brexit scenario isn’t expected to significantly affect the economics of UK ABS t...

    News Analysis    16 August 2019
  • Higher yields?

    Bluestone debuts UK RMBS

    Bluestone Mortgages is in the market with its first UK RMBS. Dubbed Genesis Mortgage Funding 2019-1,...

    News    16 August 2019
  • Syncora Guarantee acquired

    Sector developments and company hires

    Syncora sale GoldenTree Asset Management entity Star Insurance Holdings is set to acquire Syncora H...

    Market moves    15 August 2019
  • NPL disposals inked

    Sector developments and company hires

    ABSF tender The Australian Office of Financial Management is inviting tender submissions for the p...

    Market moves    14 August 2019
  • Tweaking tradition

    Dutch securitisation evolving across established sectors

    The Dutch securitisation market is seeing innovation and growth away from its traditional strong foc...

    News Analysis    13 August 2019
  • STS mirage

    "Still no level playing field" despite regulation

    Despite the high bar that issuers must clear to achieve the STS designation on securitisations, the...

    News Analysis    12 August 2019
  • SCI Start the Week - 12 August

    A review of securitisation activity over the past seven days

    SCI CRT awards Don't miss out on your chance to win: the submissions deadline for the inaugural SCI...

    News    12 August 2019
  • AM acquisition

    Sector developments and company hires

    Asset management acquisition Assured Guaranty US Holdings is set to acquire all of the outstanding...

    Market moves    9 August 2019
  • Alt credit co-head hired

    Company hires and sector developments

    Alt credit co-head nabbed Ares has hired Joel Holsinger to its credit group as c...

    Market moves    7 August 2019
  • CLO partner appointed

    Sector developments and company hires

    CLO firm partner promotion DFG Investment Advisers has promoted Timothy Milton to partner. Since j...

    Market moves    6 August 2019
  • SCI Start the Week - 5 August

    A review of securitisation activity over the past seven days

    Market commentary Portuguese RMBS outperformed other securitisation asset classes last week, booste...

    News    5 August 2019
  • CLO head hired

    Sector developments and company hires

    BUMF 6 injunctions granted Final injunctions have been granted against Greencoat Investments (GIL)...

    Market moves    2 August 2019
  • Landmark SRTs inked

    BP Bari completes capital relief trades

    Banca Popolare di Bari has completed two capital relief trades that reference respectively a &eu...

    News    2 August 2019
  • Crunching the numbers

    'Anomalous' acquisition of mortgages 'made economic sense'

    Arbuthnot Banking Group recently acquired two mortgage portfolios from the Raphael Mortgages and Mag...

    News    1 August 2019
  • Under pressure?

    UK non-prime RMBS could be tested in the autumn

    Attention in the UK RMBS market is turning to what might happen in September as the summer lull begi...

    News    1 August 2019
  • Affordable loan credit insurance risk transfer closed

    Sector developments and company hires

    Affordable CIRT closed Fannie Mae has executed a new credit insurance risk transfer (CIRT) transac...

    Market moves    31 July 2019
  • Portuguese boost

    RMBS tightens on call optionality

    Portuguese RMBS outperformed other securitisation asset classes last week, boosted by the surprise c...

    News    31 July 2019