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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).


  • UK mortgage tool launches

    Moody's Analytics has launched UK Mortgage Portfolio Analyser (UK-MPA), a tool to assess and manage...

    News Round-up    29 April 2016
  • Irish RMBS delinquencies dropping

    Severe delinquencies among S&P-rated Irish RMBS transactions have declined over the past fou...

    News Round-up    29 April 2016
  • European placements trending down

    Only €14.3bn of securitised product was placed in Europe in 1Q16, according to AF...

    News Round-up    28 April 2016
  • Towd debuts WAC cap

    Towd Point Mortgage Funding 2016-Granite 1 is the first European securitisation to place a cap on it...

    News Round-up    28 April 2016
  • Rate floor ruling assessed

    A recent Madrid court ruling on interest rate floor clauses within retail mortgages should not pose...

    News Round-up    27 April 2016
  • Euro secondary picks up

    The European securitisation secondary market saw an increase in activity yesterday to go with the im...

    SCIWire    27 April 2016
  • Liquidity tops investor concerns

    While investor fears over China-related uncertainty have subsided, concerns regarding liquidity and...

    News    26 April 2016
  • FNMA to issue reperforming deals

    Fannie Mae will later this year begin securitising reperforming loans held on its balance sheet. Rep...

    News Round-up    26 April 2016
  • South Korean issuance up again

    South Korean ABS issuance was up by 16.8% in 1Q16 from 1Q15, according to the country's Financial Su...

    News Round-up    26 April 2016
  • Euro secondary steady

    The European securitisation secondary market continues to move steadily ahead. Tone continued to b...

    SCIWire    26 April 2016
  • Record Philippines deal prepped

    8990 Holdings has mandated China Bank Capital to arrange and underwrite a PHP5bn securitisation, whi...

    News Round-up    25 April 2016
  • SCI Start the Week - 25 April

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

    Pipeline Last week's pipeline additions were concentrated in ABS. There were six new ABS announced,...

    News    25 April 2016
  • RMBS hit by error

    Moody's has downgraded an RMBS Mexican certificate after correcting an error in its cashflow modelli...

    News Round-up    22 April 2016
  • China hurdles laid out

    Moody's says that the Chinese securitisation market could gain valuable traction once a number of hu...

    News Round-up    22 April 2016
  • FNMA brings fresh CIRT transaction

    Fannie Mae has completed its tenth Credit Insurance Risk Transfer transaction. CIRT 2016-3 shifts a...

    News Round-up    22 April 2016
  • High costs hit non-bank servicers

    Of the three largest US non-bank mortgage servicers - Nationstar, Ocwen and Walter Investme...

    News Round-up    22 April 2016
  • RMBS research head hired

    Vipul Jain has joined Wells Fargo's research and economics department as md and head of residential...

    Job Swaps    21 April 2016
  • Euro secondary scrappy

    Activity continues to be scrappy in the European securitisation secondary market. Sentiment remain...

    SCIWire    21 April 2016
  • Special situations analyst added

    TCW Group has appointed Steven Purdy to its fixed income credit research group as md and special sit...

    Job Swaps    20 April 2016
  • Euro ABS/MBS picks up

    Tone and volumes are on the rise across the European ABS/MBS secondary market. "The market has bee...

    SCIWire    20 April 2016
  • ATR claims 'non-existent'

    Fitch says that borrower claims against major US residential mortgage servicershave been non-existen...

    News Round-up    19 April 2016