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

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 improves

    Tone in many European securitisation secondary market sectors continues to improve in line with broa...

    SCIWire    17 February 2016
  • Euro secondary stalemate

    With the US absent and continuing improvements in broader markets, it was stalemate in the European...

    SCIWire    16 February 2016
  • FNMA aims for liquidity

    Fannie Mae has priced its latest credit risk sharing transaction under the Connecticut Avenue Securi...

    News Round-up    15 February 2016
  • SCI Start the Week - 15 February

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

    Pipeline As with the previous week, pipeline additions last week were dominated by ABS. There were...

    News    15 February 2016
  • P2P lender poaches ABS pro

    Dipesh Mehta has joined Funding Circle as a director in its capital markets team following a&nbs...

    Job Swaps    15 February 2016
  • Euro secondary stronger

    After a relatively benign close to last week, today is opening with a stronger tone across the bulk...

    SCIWire    15 February 2016
  • Fourth set of FNMA NPLs sold

    Fannie Mae has revealed the winning bidders from its fourth NPL sale, whi...

    News Round-up    12 February 2016
  • Latest toxic MBS case settled

    Morgan Stanley has agreed to pay out on another settlement involving fail...

    Job Swaps    12 February 2016
  • Potential PMI boost for RMBS

    The recovery of the private mortgage insurance (PMI) industry suggests that there is value to be fou...

    News    12 February 2016
  • German loan terms decreasing

    Average German residential mortgage loan terms are falling as the amortisation portion of instalment...

    News Round-up    12 February 2016
  • Euro secondary slides

    Activity and pricing levels are sliding across the European securitisation secondary market. Prime...

    SCIWire    12 February 2016
  • Right to return

    Non-prime mortgages set for US comeback?

    Attempts to reinvigorate the US non-prime RMBS market appear to be gaining traction. However, the se...

    News Analysis    11 February 2016
  • Broker-dealer adds RMBS trader

    First Empire Securities has hired RMBS trader Richard Liao. He was most recently an agency RMBS trad...

    Job Swaps    11 February 2016
  • Euro ABS/MBS switchback

    Yesterday was a better day in the European ABS/MBS secondary market, but today looks set to see a sw...

    SCIWire    11 February 2016
  • Servicing penalties imposed

    The OCC has terminated mortgage servicing-related consent orders against US Bank and Santander, and...

    Job Swaps    10 February 2016
  • Florida servicer payments 'credit positive'

    The payments made on delinquent loans by servicers in Florida are credit positive for the RMBS backe...

    News Round-up    10 February 2016
  • CMBS originations business closed

    Redwood Trust is repositioning its commercial mortgage business to focus solely on investing activit...

    Job Swaps    10 February 2016
  • CAF 2015-1 workout progressing

    The first loan default in the US$251.6m Colony American Finance 2015-1 multi-borrower single-family...

    News Round-up    10 February 2016
  • Euro secondary struggles

    The European securitisation secondary market continues to struggle amid wider market volatility, but...

    SCIWire    10 February 2016
  • Loan loss model changes mooted

    Fitch has proposed changes to its US RMBS loan loss model criteria and is seeking market feedback. T...

    News Round-up    9 February 2016
  • Euro secondary sidelined

    The European securitisation secondary market remains quiet as participants continue sit out wider ma...

    SCIWire    9 February 2016