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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).


  • 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
  • Freddie offloads more NPLs

    Freddie Mac has sold off a further US$1.4bn of seriously delinquent loans serviced...

    News Round-up    24 March 2016
  • RPL, NPL approach updated

    Moody's has made updates to its rating methodology for securitisations backed by N...

    News Round-up    24 March 2016
  • Pepper RMBS largest for decade

    Pepper Group has priced a new A$700m-equivalent non-conforming RMBS, the largest to hit the Australi...

    News Round-up    24 March 2016
  • Modification behaviour gauged

    One in every three US mortgages liquidated today has been modified at least once, so deciphering whe...

    News    23 March 2016
  • Euro secondary steady

    Activity in the European securitisation secondary market is steady rather than spectacular at presen...

    SCIWire    23 March 2016
  • RMBS rating revision for trio

    S&P is requesting feedback on revisions it has made to rating RMBS and covered bonds backed...

    News Round-up    22 March 2016
  • GSEs auctioning bulk MSRs

    Fannie Mae and Freddie Mac have put a US$6.2bn bulk mortgage servicing rights portfolio up for aucti...

    News Round-up    22 March 2016
  • TRID error treatment progressing

    A SFIG industry working group focused on the treatment of TRID errors in the US RMBS secondary marke...

    News Round-up    22 March 2016
  • London calling

    GLA sets sights on RMBS

    The Greater London Authority (GLA) has announced its intention to invest in senior UK RMBS, signalli...

    News Analysis    21 March 2016
  • Mortgage lender names leader

    Venn Partners has named Marc de Moor as head of Venn Hypotheken (SCI 10 March). Based in Breda, he h...

    Job Swaps    21 March 2016
  • Auto deals driving ABCP

    A recent surge in outstanding ABCP has been driven by increased auto issuance, according to...

    News Round-up    21 March 2016
  • FNMA completes largest CIRTs

    Fannie Mae has completed its latest set of Credit Insurance Risk Transfer deals, the largest cumulat...

    News Round-up    21 March 2016
  • SCI Start the Week - 21 March

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

    PipelineThe pipeline was dominated by auto-related ABS entrants last week. A couple of CMBS and RMBS...

    News    21 March 2016
  • SFR exposure encouraged

    SFR transactions offer value to STACR, CAS, legacy RMBS and consumer ABS deals, argue Wells Fargo an...

    News    18 March 2016
  • Euro secondary upswing

    The European securitisation secondary market is seeing an upswing in activity once again. Yesterda...

    SCIWire    18 March 2016
  • Aussie arrears push up

    The 30-plus day delinquency rate for Australian prime RMBS increased in from 1.14% in 3Q15 ...

    News Round-up    17 March 2016
  • Euro secondary partly pauses

    The bulk of the European securitisation secondary market took a pause yesterday, but CLOs continue t...

    SCIWire    17 March 2016
  • Resi, CRE auction platforms launched

    Ten-X, formerly known as Auction.com, has launched two new transaction platforms for buying and sell...

    News Round-up    16 March 2016
  • Euro secondary mixed

    The European securitisation secondary market is seeing mixed activity and results as the&am...

    SCIWire    16 March 2016
  • ECB suggests regulatory tweaks

    The ECB has suggested changes to the new securitisation package proposed by the European Commission...

    News Round-up    15 March 2016