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


  • 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
  • SCI Start the Week - 8 February

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

    Pipeline Pipeline additions were heavily skewed to ABS last week. A total of 11 ABS deals were ad...

    News    8 February 2016
  • HSBC settles over mortgage practices

    The US Justice Department, the Department of Housing and Urban Development and the CFPB, along with...

    Job Swaps    8 February 2016
  • Countrywide verified petition filed

    Bank of New York Mellon, as trustee for all 530 RMBS involved in the Countrywide settlement, last we...

    News Round-up    8 February 2016
  • Euro secondary lacklustre

    Friday saw another lacklustre session in the European securitisation secondary market. Macro marke...

    SCIWire    8 February 2016
  • Repo RMBS debuts

    Jefferies Funding is in the market with an RMBS backed by a one-year revolving warehouse facility gu...

    News    5 February 2016
  • Euro secondary varies

    Volumes continue to be light in the European securitisation secondary market with performance still...

    SCIWire    5 February 2016
  • STS expected losses highlighted

    Preferential capital treatment for simple, transparent and standardised (STS) securitisations would...

    News Round-up    4 February 2016
  • Dispute resolution framework inked

    Fannie Mae and Freddie Mac have implemented a new independent dispute resolution (IDR) process for h...

    News    4 February 2016
  • Euro secondary difficult

    Wider market weakness continues to make life difficult in the European securitisation secondary mark...

    SCIWire    4 February 2016
  • Morgan Stanley settlement reached

    Morgan Stanley has agreed to pay the FDIC nearly US$63m regarding claims over the sale of RMBS to th...

    Job Swaps    3 February 2016
  • Business development leader added

    ZAIS Group has appointed Gregory Barrett as head of client relations and business development. He re...

    Job Swaps    3 February 2016
  • Euro ABS/MBS stifled

    The European ABS/MBS secondary market continues to be stifled by wider market weakness. Activity w...

    SCIWire    3 February 2016
  • UKAR servicing transfer agreed

    Computershare has been appointed preferred supplier in the tender process to undertake the mortgage...

    Job Swaps    2 February 2016
  • Risks weighed for modified RMBS

    The scheduled increase in interest rates on certain US RMBS-linked modified loans is seen by Moody's...

    News Round-up    2 February 2016
  • Euro secondary still slow

    It continues to be a slow start to the month for the European securitisation secondary market. "It...

    SCIWire    2 February 2016
  • SCI Start the Week - 1 February

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

    Pipeline The pipeline was slightly quieter last week as fewer deals joined and fewer deals left. At...

    News    1 February 2016
  • Catalonia law irks NPL buyers

    A new Catalonian law on housing emergencies could deter potential purchases of Spanish mortgage NPLs...

    News Round-up    1 February 2016
  • MI analysis updated

    Morningstar Credit Ratings has published an updated methodology for US RMBS ratings, including an ex...

    News Round-up    1 February 2016
  • Euro secondary quiet

    Month-end made for a relatively quiet session on Friday for the European securitisation secondary ma...

    SCIWire    1 February 2016