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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).


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

    Pipeline Pipeline activity picked up again last week, with ABS leading the charge. There were nin...

    News    11 July 2016
  • Brexit ratings outlook 'unchanged'

    Fitch has reassured the market that no more UK structured finance rating actions are expect...

    News Round-up    8 July 2016
  • Global issuance trends diverging

    S&P reports that that there is a clear divide in recent structured finance issuance trends,...

    News Round-up    8 July 2016
  • Single security, CSP update provided

    The FHFA has released an update on the implementation of the single security and common securitisati...

    News Round-up    8 July 2016
  • RMBS upgraded on CIFG merger

    Moody's has upgraded 11 classes of structured finance securities as a result of Assured Guaranty Cor...

    News Round-up    6 July 2016
  • RMBS deal agent costs considered

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    News Round-up    6 July 2016
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    ESMA has published a call for candidates to form a consultative working group (CWG) for its secondar...

    Job Swaps    5 July 2016
  • GSE NPL programmes 'favourable'

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    News Round-up    4 July 2016
  • Florida NPLs sold

    Freddie Mac is continuing its bulk offloading of NPLs, with its latest auction seeing it sell a comb...

    News Round-up    4 July 2016
  • SCI Start the Week - 4 July

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

    Pipeline Additions to the pipeline were limited once again last week, although two large Chinese de...

    News    4 July 2016
  • Countrywide cash benefits 'broad'

    Holders of 512 legacy Countrywide deals receiving allocated shares of US$7.7bn in settlement proceed...

    News    1 July 2016
  • Brexit MSR impact weighed

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    News Round-up    1 July 2016
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    Fitch has downgraded 18 tranches, and placed another two on rating watch negative, from six transact...

    News Round-up    1 July 2016
  • Freddie hits ACIS milestone

    Freddie Mac has recorded its largest purchase to date under its Agency Credit Insurance Structure pr...

    News Round-up    1 July 2016
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    Postal Savings Bank of China (PSB) is prepping a RMB3.82bn RMBS called Jiamei 2016-1. The transactio...

    News Round-up    1 July 2016
  • New York foreclosure boost

    New York Governor Andrew Cuomo last week signed a series of laws that could have a sweeping impact o...

    News    1 July 2016
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    News Round-up    30 June 2016
  • Rating agency increases reach

    Scope Corporation is set to acquire FERI EuroRating Services, effective from the start of August. Th...

    Job Swaps    30 June 2016
  • RFC issued on front-end CRTs

    The US FHFA is seeking input in response to two new reports it has released on Fannie Mae a...

    News Round-up    30 June 2016
  • Euro ABS/MBS normalising

    European ABS and MBS have been quick to shrug off Brexit worries, with activity building up again th...

    SCIWire    30 June 2016
  • Settlement reinvestment options weighed

    Current holders of non-agency RMBS from 512 Countrywide deals have finally received almost US$8bn in...

    News    29 June 2016