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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).


  • 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
  • Euro ABS/MBS distracted

    Activity in the European ABS/MBS secondary market continues to be light with participants focusing e...

    SCIWire    8 November 2016
  • SCI Start the Week - 7 November

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

    Pipeline There was another pickup in pipeline additions last week, as four new ABS, three RMBS and...

    News    7 November 2016
  • Roll-rate analysis updated

    DBRS is requesting comments on its proposed update to the RMBS Insight 1.2: US Residential Mortgage-...

    News Round-up    4 November 2016
  • Nomura settles over RMBS

    Nomura Asset Acceptance Corp and Nomura Home Equity Loan have agreed to pay the NCUA more than US$3m...

    Job Swaps    4 November 2016
  • Pooling requirements to boost confidence

    Recent changes announced by Ginnie Mae to pooling requirements of streamline refinanced loans are lo...

    News    3 November 2016
  • UK ratings addendum released

    DBRS has published a European RMBS Insight-UK Addendum methodology. The UK Addendum, together with t...

    News Round-up    3 November 2016
  • Error results in review

    Fitch has placed the class A notes - currently rated single-A - of Atlantes Mortgages No 2...

    News Round-up    3 November 2016
  • Jumbo RMBS 'could see growth'

    Should lenders start offering jumbo mortgages to a greater number of creditworthy borrowers, the US...

    News Round-up    2 November 2016
  • Euro secondary patchy

    Activity in the European securitisation secondary market continues to be patchy. After a primarily...

    SCIWire    2 November 2016
  • GSEs announce validation frameworks

    Both Fannie Mae and Freddie Mac have announced new validation tools aimed at making the mortgage ori...

    News    1 November 2016
  • Loan repurchase planned

    Banca Popolare di Vicenza (BPVi) and Banca Nuova (BN) are set to repurchase on 1 November all the lo...

    News Round-up    31 October 2016
  • Leek redemption due

    UK non-conforming RMBS Leek Finance Number 18 is set to be redeemed on 21 December, five years after...

    News Round-up    31 October 2016
  • SCI Start the Week - 31 October

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

    Pipeline As with the preceding week, last week's additions to the pipeline were relatively modest....

    News    31 October 2016
  • Deleveraging programme completed

    Permanent TSB has finalised the sale of £2.29bn worth of loans by its UK subsidiary, Landsd...

    News Round-up    28 October 2016
  • Above par pricing anticipated

    Achmea Bank is in the market with its second swapless RMBS. The €690.5m Dutch Residential...

    News Round-up    27 October 2016
  • Spanish special servicers 'key'

    Loss severities on Spanish mortgage foreclosures have increased again this year, says Fitch, despite...

    News Round-up    27 October 2016
  • SFR refi incentive boosted

    Total home equity has increased by 27% since issuance across the 71,955 properties underlying the 18...

    News    27 October 2016
  • Euro ABS/MBS quiet

    This week has continued to be slow across the European ABS/MBS secondary market. "There's nothing...

    SCIWire    27 October 2016