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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).


  • Co-ceo named

    Sector developments and company hires

    Co-ceo named Värde Partners has named Ilfryn Carstairs as co-ceo, alongside co-founder Ge...

    Market moves    19 July 2019
  • Fast track

    ING RMBS turbo kicks in

    Moody's has upgraded three tranches from ING’s Orange Lion 2013-10 RMBS, reflectin...

    News    19 July 2019
  • Additional resources for disclosure published

    Sector developments and company hires

    Agri-investing appointment Arable Capital Partners has appointed Matt Reus a vp in the Bellevue, W...

    Market moves    18 July 2019
  • Bank fined over MBS trading failures

    Company hires and sector developments

    Agency heads announced Morningstar Credit Ratings (MCR) has named Erin Stafford as head of the com...

    Market moves    17 July 2019
  • Fund founder guilty of fraud

    Company hires and sector developments

    African solar plan approved The African Development Bank Group has approved an innovative multinat...

    Market moves    15 July 2019
  • Green investment partnership launched

    Company hires and sector developments

    Green investment Amundi and the EIB have signed a partnership to launch the Green Credit Continuum...

    News    12 July 2019
  • Pros and cons

    STS conversion benefits weighed

    The incentives for converting pre-2019 securitisations into STS-compliant deals differ across seller...

    News Analysis    12 July 2019
  • Novel approach

    UTPs drive ReoCo rethink

    Investors and servicers in the Italian non-performing loan market are targeting a new approach to Re...

    News Analysis    11 July 2019
  • Investment chief appointed

    Sector developments and company hires

    Business Mortgage Finance 6 update Business Mortgage Finance 6, the issuer, has informed noteholde...

    Market moves    10 July 2019
  • New deals surge

    Quarterly SCI data update

    2Q19 saw a surge in new issuance volume across securitisation markets either side of the Atlantic. T...

    News Analysis    10 July 2019
  • Spanish exposure

    Rare NPL RMBS prepped

    Rarely seen Spanish assets are behind the latest non-performing loan RMBS currently marketing. At th...

    News    10 July 2019
  • Greencoat Investments notice received

    Sector developments and company hires

    BUMF 6 application discontinued A notice of discontinuance from Greencoat Investments has been rec...

    Market moves    5 July 2019
  • EBRD appoints Greece, Cyprus lead

    Company hires and sector developments

    EBRD hires NPL vet The EBRD has appointed Andreea Moraru to lead its operations in Greece and Cypr...

    Market moves    4 July 2019
  • Pre-summer rush

    European ABS market update

    Activity levels are currently high across the European ABS/MBS and CLO markets and that looks set to...

    Market Reports    3 July 2019
  • CLO firm boosts research team

    Company hires and sector developments

    CEDE made public AIR Worldwide has published its Catastrophe Exposure Data Exchange (CEDE) databas...

    Market moves    2 July 2019
  • ReoCo impact assessed

    Company hires and sector developments

    CMIP acquisition Investcorp Credit Management US has entered into a definitive interest purchase a...

    Market moves    28 June 2019
  • Increasing diversity

    Competition, TFS exit driving UK RMBS volume

    The UK mortgage market is furiously price competitive, with ring-fenced high street banks crowding o...

    News Analysis    28 June 2019
  • Compliance challenges

    STS requirements raise regulatory liability concerns

    The securitisation market now appears to be embracing the new Securitisation Regulation and adapting...

    News Analysis    28 June 2019
  • GSE reform study released

    Sector developments and company hires

    Private credit double announced Solar Capital Partners has hired two senior private credit investm...

    Market moves    27 June 2019
  • CMBS auditing upset

    Sector developments and company hires

    Auditing issue The JUNO (ECLIPSE 2007-2) CMBS failed to file its financial statements for 2017, to...

    Market moves    26 June 2019
  • Forward-mortgage first prepped

    Global investor markets 'unique' RMBS

    Blackstone is marketing an inaugural, US$264.5m forward-mortgage RMBS featuring unique collateral ch...

    News    26 June 2019