Structured Credit Investor SCI’s 5th Annual Capital Relief Trades Seminar 17 October 2019, London
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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 secondary starts slowly

    The quarter has begun slowly in the European securitisation secondary market. "It's been a slow st...

    SCIWire    6 April 2016
  • STS alarm bells ring

    A list of potential pitfalls in the European Commission's STS framework has been published in a lett...

    News    5 April 2016
  • California AG targets RMBS

    The California Attorney General Kamala Harris has filed a lawsuit against Morgan Stanley over RMBS t...

    News Round-up    5 April 2016
  • Granite resurfaces in unique RMBS

    Cerberus European Residential Holdings is bringing to market a deal which is essentially a ...

    News    5 April 2016
  • SCI Start the Week - 4 April

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

    Pipeline The week following Easter marked a slow-down in the pace of deals joining the pipeline. At...

    News    4 April 2016
  • Countrywide initial releases identified

    A severance order and partial final judgment was last week filed in the New York State Supreme Court...

    News Round-up    4 April 2016
  • Wolters enhances mortgage capabilities

    Wolters Kluwer is set to add digital transaction management firm eOriginal's eVaulting and eClosing...

    News Round-up    1 April 2016
  • AMI outlines TRID grievances

    The Association of Mortgage Investors (AMI) has sent a letter to the CFPB outlining a number of conc...

    News Round-up    1 April 2016
  • Countrywide trustee plan 'ratings neutral'

    There will be no negative impact on ratings for Countrywide RMBS from a change of custodial file ven...

    News Round-up    1 April 2016
  • Rating agency adds sales chief

    Scope Ratings has appointed Sven Janssen to the newly-created role of chief sales and marketing offi...

    Job Swaps    1 April 2016
  • QM RMBS loan criteria updated

    Fitch has updated its criteria for analysing loans securing US RMBS under the ability-to-repay (ATR)...

    News Round-up    1 April 2016
  • Repo clearing blockchain considered

    The DTCC has teamed up with Digital Asset Holdings to develop a distributed ledger solution which wo...

    News Round-up    31 March 2016
  • Whole loans offloaded

    Rabobank has sold a €1bn portion - representing 0.5% - of its mortgage portfolio...

    News Round-up    31 March 2016
  • Euro secondary stifled

    Sentiment continues to be strong across the European securitisation market but technicals are stifli...

    SCIWire    31 March 2016
  • RMBS rating changes proposed

    DBRS is requesting comments on its proposed European RMBS insight model and rating methodology. The...

    News Round-up    30 March 2016
  • Euro secondary returns

    After a quiet few sessions surrounding the long weekend the European securitisation secondary market...

    SCIWire    30 March 2016
  • GSE merger proposed

    A paper written by key architects of the Obama administration's housing policy has been released out...

    News Round-up    29 March 2016
  • Goldberg bolsters commercial practice

    Goldberg Segalla has brought in Louis Russo as partner and a member of its business and commercial p...

    Job Swaps    29 March 2016
  • Credit Suisse settles RMBS charges

    The NCUA has achieved its latest settlement from a series of cases surrounding faulty pre-c...

    News Round-up    29 March 2016
  • Japanese rating upgrades increase

    The upgrade rate for Japanese structured finance securities rose in 2015, notes S&P. S&a...

    News Round-up    29 March 2016
  • Chinese ABS expansion 'to continue'

    China's securitisation market will continue to grow this year, albeit at a slower pace than in 2015,...

    News Round-up    29 March 2016