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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).


  • Wolters enhances mortgage capabilities

    Wolters Kluwer is set to add digital transaction management firm eOriginal's eVaulting and eClosing...

    News Round-up    1 April 2016
  • AMI outlines TRID grievances

    The Association of Mortgage Investors (AMI) has sent a letter to the CFPB outlining a number of conc...

    News Round-up    1 April 2016
  • Countrywide trustee plan 'ratings neutral'

    There will be no negative impact on ratings for Countrywide RMBS from a change of custodial file ven...

    News Round-up    1 April 2016
  • Rating agency adds sales chief

    Scope Ratings has appointed Sven Janssen to the newly-created role of chief sales and marketing offi...

    Job Swaps    1 April 2016
  • QM RMBS loan criteria updated

    Fitch has updated its criteria for analysing loans securing US RMBS under the ability-to-repay (ATR)...

    News Round-up    1 April 2016
  • Repo clearing blockchain considered

    The DTCC has teamed up with Digital Asset Holdings to develop a distributed ledger solution which wo...

    News Round-up    31 March 2016
  • Whole loans offloaded

    Rabobank has sold a €1bn portion - representing 0.5% - of its mortgage portfolio...

    News Round-up    31 March 2016
  • Euro secondary stifled

    Sentiment continues to be strong across the European securitisation market but technicals are stifli...

    SCIWire    31 March 2016
  • RMBS rating changes proposed

    DBRS is requesting comments on its proposed European RMBS insight model and rating methodology. The...

    News Round-up    30 March 2016
  • Euro secondary returns

    After a quiet few sessions surrounding the long weekend the European securitisation secondary market...

    SCIWire    30 March 2016
  • GSE merger proposed

    A paper written by key architects of the Obama administration's housing policy has been released out...

    News Round-up    29 March 2016
  • Goldberg bolsters commercial practice

    Goldberg Segalla has brought in Louis Russo as partner and a member of its business and commercial p...

    Job Swaps    29 March 2016
  • Credit Suisse settles RMBS charges

    The NCUA has achieved its latest settlement from a series of cases surrounding faulty pre-c...

    News Round-up    29 March 2016
  • Japanese rating upgrades increase

    The upgrade rate for Japanese structured finance securities rose in 2015, notes S&P. S&a...

    News Round-up    29 March 2016
  • 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