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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 stable

    The European securitisation secondary market remained stable throughout August and that looks unlike...

    SCIWire    1 September 2016
  • Second-loss CAS bonds rated

    Marking a first for the market, Fitch has assigned ratings to eight previously unrated M2 bonds from...

    News    31 August 2016
  • Colony offloads NPLs

    Colony Starwood Homes has sold a US$266m portfolio of 1,675 NPLs to an affiliate of Starwood Capital...

    News Round-up    31 August 2016
  • Coupon floor fix?

    Obvion is in the market with its latest Dutch prime RMBS - Storm 2016-II. Provisionally si...

    News    31 August 2016
  • Ocwen settles offshore charges

    Ocwen Loan Servicing has agreed to pay a US$900,000 settlement fee over allegations that it used off...

    Job Swaps    30 August 2016
  • NPL RMBS tranche pays off

    The first Fitch-rated post-crisis RMBS tranche backed partly by NPLs has paid off. The single-A rate...

    News Round-up    30 August 2016
  • HLTV refinance programme planned

    Fannie Mae and Freddie Mac are set to implement next year a new refinance offering aimed at borrower...

    News    26 August 2016
  • British steel

    Rate cut troubles for UK RMBS overstated?

    The Bank of England's decision to cut interest rates earlier this month was widely viewed as positiv...

    News Analysis    25 August 2016
  • Non-QM RMBS closed

    Angel Oak Capital Advisors has completed its second RMBS backed primarily by non-qualified mortgages...

    News Round-up    24 August 2016
  • Liquidity warning issued

    KBRA is calling for regulators and policymakers to take notice of dwindling liquidity and capital to...

    News Round-up    24 August 2016
  • Aire Valley redemptions due

    UKAR last week issued refinancing notices for Aire Valley Mortgages series 2004-1, 2005-1, 2006-1 an...

    News Round-up    22 August 2016
  • SCI Start the Week - 22 August

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

    Pipeline The outstanding deal pipeline has shrunk significantly over the past few weeks as the year...

    News    22 August 2016
  • RMBS sales, trading teams bolstered

    Hilltop Securities has made a string of changes to its RMBS trading and sales group in its New York,...

    Job Swaps    19 August 2016
  • Ex-Goldman trader barred

    The US SEC has barred a former Goldman Sachs RMBS trader from the securities industry after he was f...

    Job Swaps    17 August 2016
  • JPMorgan settlement approved

    The US$4.5bn JPMorgan RMBS settlement was last week approved by the court, which overruled the final...

    Job Swaps    17 August 2016
  • United Guaranty sale agreed

    Arch Capital Group is set to acquire United Guaranty Corporation and United Guaranty Insurance from...

    Job Swaps    16 August 2016
  • Chinese RMBS approach published

    Moody's has published its approach to rating Chinese RMBS using the MILAN framework. The agency will...

    News Round-up    16 August 2016
  • NPL RMBS approach finalised

    Fitch has finalised its approach for rating RMBS backed by non-performing loans, which leverages its...

    News Round-up    15 August 2016
  • Residential delinquencies at decade low

    The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased by 11bp...

    News Round-up    12 August 2016
  • Ocwen upgraded to 'average'

    S&P has raised its overall rankings on Ocwen Loan Servicing from below average to average as...

    News Round-up    12 August 2016
  • CRT ratings upgraded

    Moody's has upgraded the ratings of 22 tranches from four credit risk transfer RMBS backed by confor...

    News Round-up    12 August 2016