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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).


  • Low losses for Japanese apartments

    Credit losses on Japanese apartment loans will remain low for Moody's-rated banks because they tend...

    News Round-up    5 November 2015
  • Euro secondary improves

    Yesterday saw further improvement in the European securitisation secondary market, but it is still y...

    SCIWire    5 November 2015
  • Grey area

    Granite casting shadow on European sentiment

    UKAR's sale of the Granite portfolio remains the hot topic in the European RMBS market, with uncerta...

    News Analysis    4 November 2015
  • Mortgage fund inks first investment

    UK Mortgages Limited (UKML), TwentyFour Asset Management's listed closed-ended fund, has signed its...

    Job Swaps    4 November 2015
  • Rating agency targets expansion

    A partnership has been formed between Kroll Bond Rating Agency, the Kroll family and Wharf Street, e...

    Job Swaps    4 November 2015
  • Euro secondary strengthens

    The positive tone in the European securitisation secondary market continues to build. "Overall, we...

    SCIWire    4 November 2015
  • MERS settlement agreed

    Bank of America has agreed to pay US$335m to settle a lawsuit, in which it allegedly misled sharehol...

    Job Swaps    3 November 2015
  • Regulation threatens market viability

    Banks' market making ability in securitised products is set to be severely affected by the Basel Com...

    News    3 November 2015
  • Euro secondary refocuses

    After a couple of quiet sessions the European securitisation secondary market looks set to refocus i...

    SCIWire    3 November 2015
  • Deutsche re-allocates trading resources

    Deutsche Bank's management board has approved a five-year plan to revamp its strategy in the hope of...

    Job Swaps    2 November 2015
  • Population growth to support RMBS

    Population growth will support housing demand and property prices in the UK, the Netherlands and Ire...

    News Round-up    2 November 2015
  • SCI Start the Week - 2 November

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

    Pipeline The number of deals joining the pipeline and staying there grew again last week. In total...

    News    2 November 2015
  • Euro secondary rolls on

    The bulk of the European securitisation secondary market took month end in its stride and continues...

    SCIWire    2 November 2015
  • Law firm expands in California

    Baker Botts is opening an office in San Francisco. It will be the firm's second office in California...

    Job Swaps    30 October 2015
  • South African affordability analysed

    South African borrowers whose mortgage debt backs RMBS are "much more likely" to make regular paymen...

    News Round-up    30 October 2015
  • APAC ratings 'stable'

    Fitch affirmed a total of 133 APAC structured finance tranches in 3Q15. No ratings...

    News Round-up    30 October 2015
  • Euro secondary mixed

    The European securitisation secondary market continues to experience mixed fortunes, though tone con...

    SCIWire    30 October 2015
  • US RMBS held

    US non-agency RMBS secondary spreads are being held at or around recent wides by a range of external...

    SCIWire    29 October 2015
  • Euro secondary stays slow

    The European securitisation secondary market saw another slow session yesterday, but tone continues...

    SCIWire    29 October 2015
  • Novel RMBS marketing

    TSB Bank has begun roadshowing its debut UK prime RMBS. Duncan Funding 2015-1 will not be i...

    News Round-up    28 October 2015
  • Euro secondary pauses

    The nascent revival in the European securitisation secondary market has come to a halt once again. ...

    SCIWire    28 October 2015