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).


  • SCI Start the Week - 21 March

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

    PipelineThe pipeline was dominated by auto-related ABS entrants last week. A couple of CMBS and RMBS...

    News    21 March 2016
  • SFR exposure encouraged

    SFR transactions offer value to STACR, CAS, legacy RMBS and consumer ABS deals, argue Wells Fargo an...

    News    18 March 2016
  • Euro secondary upswing

    The European securitisation secondary market is seeing an upswing in activity once again. Yesterda...

    SCIWire    18 March 2016
  • Aussie arrears push up

    The 30-plus day delinquency rate for Australian prime RMBS increased in from 1.14% in 3Q15 ...

    News Round-up    17 March 2016
  • Euro secondary partly pauses

    The bulk of the European securitisation secondary market took a pause yesterday, but CLOs continue t...

    SCIWire    17 March 2016
  • Resi, CRE auction platforms launched

    Ten-X, formerly known as Auction.com, has launched two new transaction platforms for buying and sell...

    News Round-up    16 March 2016
  • Euro secondary mixed

    The European securitisation secondary market is seeing mixed activity and results as the&am...

    SCIWire    16 March 2016
  • ECB suggests regulatory tweaks

    The ECB has suggested changes to the new securitisation package proposed by the European Commission...

    News Round-up    15 March 2016
  • HPF reaping RMBS emergence

    S&P says that China's turn towards securitisation has supported economic and financial initi...

    News Round-up    15 March 2016
  • Safe harbour RMBS debuts

    JPMorgan is in the market with what is believed to be the first US RMBS structured to comply with th...

    News    15 March 2016
  • Indian distressed opportunities targeted

    The Canada Pension Plan Investment Board (CPPIB) and Kotak Mahindra Group have signed an agreement t...

    News Round-up    15 March 2016
  • Italian SPV rules amended

    The Bank of Italy has updated its supervisory instructions for banks and financial intermediaries co...

    News Round-up    14 March 2016
  • SCI Start the Week - 14 March

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

    Pipeline Last week's pipeline additions were heavily weighted toward ABS. There were seven new ABS,...

    News    14 March 2016
  • Euro secondary sluggish

    Despite last week ending strongly in wider credit the European securitisation secondary market remai...

    SCIWire    14 March 2016
  • Strategic review nears completion

    In its financial results for the three and twelve months ended 31 December, ZAIS Financial Corp disc...

    Job Swaps    11 March 2016
  • ECB looks to provide boost

    A new set of measures announced by the ECB could boost ABS supply. The central bank is launching a s...

    News    11 March 2016
  • AnaCap makes Dutch purchase

    AnaCap Financial Partners and Arrow Global have acquired a portfolio of Dutch residential and commer...

    News Round-up    10 March 2016
  • Italian tax exemption boosts market

    An Italian law decree introducing a flat tax on auction properties is credit positive for RMBS, ABS...

    News Round-up    10 March 2016
  • Deleveraging drives UK RMBS

    Deleveraging will be the main driver of UK non-conforming RMBS in 2016, says Moody's. Collateral per...

    News Round-up    10 March 2016
  • Dutch origination platform debuts

    Venn Partners has launched its own Dutch mortgage brand and origination platform. Called Venn Hypoth...

    News Round-up    10 March 2016
  • Euro secondary stable

    The European securitisation secondary market remains stable despite signs of an uptick in volume. ...

    SCIWire    10 March 2016