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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).


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    SCIWire    29 January 2016
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    Job Swaps    28 January 2016
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    The European securitisation secondary market is holding on to the positive tone of the past few sess...

    SCIWire    28 January 2016
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    News Round-up    27 January 2016
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    News Round-up    27 January 2016
  • JPMorgan settles RMBS dispute

    Ambac Assurance Corporation and its segregated account have settled their RMBS disputes and litigati...

    Job Swaps    27 January 2016
  • Euro secondary on the up

    Activity and pricing levels are on the up in some sectors of the European securitisation secondary m...

    SCIWire    27 January 2016
  • Loan re-classification resolved

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    News Round-up    26 January 2016
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    National Economic Research Associates submitted their allocable share calculations earlier this mont...

    News Round-up    26 January 2016
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    News Round-up    26 January 2016
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    Patterns in the European securitisation secondary market remain similar despite the continuing volat...

    SCIWire    26 January 2016
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    Eleven banks have agreed on a US$63m settlement with the Commonwealth of Virginia and the Virginia R...

    Job Swaps    25 January 2016
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    Tone in the European securitisation secondary market continued to strengthen into the last week's cl...

    SCIWire    25 January 2016
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    Certain operational risk fundamentals for property managers in the single-family rental space are on...

    News Round-up    22 January 2016
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    News Round-up    22 January 2016
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    News Round-up    22 January 2016
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    SCIWire    22 January 2016
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    News Round-up    21 January 2016
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    News Round-up    21 January 2016
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    SCIWire    21 January 2016