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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).


  • 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
  • Aussie CMBS has RMBS elements

    Think Tank Group is in the market with a CMBS deal which includes features more typically found in R...

    News Round-up    26 October 2016
  • UKAR sells as BAWAG preps

    UKAR has launched the sales process for the Bradford & Bingley assets. Coinciding with the a...

    News Round-up    26 October 2016
  • Russian RMBS risks recognised

    High LTV Russian RMBS loans are twice as likely to default as lower LTV loans, says Moody's. There a...

    News Round-up    26 October 2016
  • Loan origination tool enhanced

    Freddie Mac is set to add new capabilities to its Loan Advisor Suite in the spring. The GSE says tha...

    News Round-up    25 October 2016
  • New CIRT structure trialled

    Fannie Mae has secured commitments for a new front-end credit insurance risk transfer (CIRT) structu...

    News Round-up    25 October 2016
  • Euro secondary starts slow

    It was a slow start to the week in the European securitisation secondary market, but a large CDO liq...

    SCIWire    25 October 2016
  • SCI Start the Week - 24 October

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

    Pipeline The balance appeared to shift last week, as fewer deals joined the pipeline and far more d...

    News    24 October 2016
  • SFIG files CRT opinions

    SFIG has responded to the FHFA's request for information on Fannie Mae and Freddie Mac's credit risk...

    News Round-up    21 October 2016
  • Japan condo payments 'positive'

    The high loan prepayment rate for condominiums backing Japanese RMBS is credit positive for the asse...

    News Round-up    20 October 2016
  • Euro secondary unmoved

    The European securitisation secondary market remains unmoved by continuing strong new issue volumes....

    SCIWire    20 October 2016
  • SFR deal's unique structure assessed

    The unique structure of Amherst's inaugural single-family rental securitisation (SCI 6 October) pres...

    News Round-up    19 October 2016
  • Enhanced CMO reporting due

    FINRA is set to implement changes to TRACE trade reporting and dissemination for CMO securities on 2...

    News Round-up    19 October 2016
  • Euro secondary patterns persist

    Trading patterns in the European securitisation secondary market seen towards the end of la...

    SCIWire    18 October 2016
  • Multi-borrower SFR loan transferred

    The US$4m Delavaco loan, securitised in FirstKey 2015-SFR1, has been transferred to special servicin...

    News Round-up    17 October 2016
  • SCI Start the Week - 17 October

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

    Pipeline The long list of additions to the pipeline last week was once more driven by auto ABS. The...

    News    17 October 2016
  • Recovery rates set to improve

    Securities backed by defaulted Italian mortgage loans may benefit from legislation aimed at expediti...

    News Round-up    14 October 2016
  • Risk-transfer re-REMIC announced

    The first-ever re-REMIC securitising GSE credit risk-transfer securities has hit the market. The US$...

    News Round-up    14 October 2016
  • Euro RMBS shelves debut

    The inaugural rated deals from two new European RMBS programmes have been announced. Both platforms...

    News    13 October 2016
  • Model-implied tool launched

    Fitch has launched a new online tool that will enable investors to conduct their own model-implied r...

    News Round-up    13 October 2016
  • Euro ABS/MBS active

    The European ABS/MBS secondary market is staying active this week. "The busy primary market is tak...

    SCIWire    13 October 2016