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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).


  • Fifth community impact NPL pool sold

    Fannie Mae has successfully sold its fifth community impact pool of NPLs. The winning bidder on the...

    News Round-up    28 September 2016
  • Flow-basis deal debuts

    Freddie Mac is rolling out a new front-end credit risk transfer offering dubbed Freddie Mac Deep MI...

    News Round-up    27 September 2016
  • Treasure hunt

    Investors seek other assets as UK RMBS shrinks

    The UK RMBS universe is set to shrink throughout 2016, exacerbated by limited supply and the redempt...

    News Analysis    27 September 2016
  • Euro ABS/MBS starts slowly

    The European ABS/MBS secondary market has started the week slowly. Softer broader markets meant a...

    SCIWire    27 September 2016
  • SCI Start the Week - 26 September

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

    Pipeline Pipeline activity seemed elevated again last week. There were eight new ABS added, along...

    News    26 September 2016
  • Chinese NPL trio prepped

    Three Chinese issuers are in the market with NPL securitisations (see SCI pipeline). One of them &am...

    News Round-up    26 September 2016
  • Mexican RMBS ratings amended

    Moody's has changed the ratings on several Mexican RMBS transactions to reflect a correction to its...

    News Round-up    23 September 2016
  • Bank shuffles SF pros

    Credit Suisse has made a series of changes to its asset finance team, with a number of structured fi...

    Job Swaps    23 September 2016
  • Settlement talks watched closely

    Final settlements reached by European banks with the US Department of Justice (DoJ) for the issuance...

    News Round-up    22 September 2016
  • Record involvement for new CIRTs

    Fannie Mae has completed two more credit insurance risk transfer (CIRT) transactions, worth US$14.4b...

    News Round-up    22 September 2016
  • GS meeting settlement requirements

    Goldman Sachs is meeting its consumer relief requirements as part of its US$5bn RMBS settlement, say...

    News Round-up    21 September 2016
  • South African RMBS 'robust'

    South African RMBS will remain robust despite subdued growth expected for the country's economy, acc...

    News Round-up    20 September 2016
  • RFC on RMBS methodology

    DRBS has issued a request for comment on the proposed UK addendum to its European RMBS methodology,...

    News Round-up    20 September 2016
  • Australian mortgage arrears rise

    Mortgage arrears in Australia have risen 4bp to 1.14% in 2Q16, which comes as a surprise to the mark...

    News Round-up    19 September 2016
  • SCI Start the Week - 19 September

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

    Pipeline After the flood of additions in the week before, last week's pipeline activity was calmer....

    News    19 September 2016
  • Brazil RMBS RFC issued

    Moody's has published a request for comment on its proposed approach to Brazilian RMBS, to be submit...

    News Round-up    16 September 2016
  • DB enters RMBS settlement talks

    Deutsche Bank has commenced negotiations with the US Department of Justice (DoJ) to settle civil cla...

    News Round-up    16 September 2016
  • Ocwen steps up loan mods

    Ocwen's loan modification activity has doubled beginning in July with the implementation of...

    News Round-up    16 September 2016
  • Horizontal interest

    Sponsors assess horizontal risk retention benefits

    An increasing number of US sponsors are expected to retain a horizontal rather than a vertical risk...

    News Analysis    16 September 2016
  • STACR hits tightest price

    Freddie Mac has priced its sixth STACR offering of the year, with the senior M1 notes printing at th...

    News Round-up    15 September 2016
  • Second SFR deal repaid

    American Homes 4 Rent (AH4R) has repaid the US$342.1m loan that backs the American Residential Prope...

    News Round-up    13 September 2016