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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).


  • Short-duration MBS fund offered

    BPV Capital Management has added a sixth fund to its line-up of mutual fund products - the BPV High...

    News Round-up    1 December 2015
  • Asian delinquency trends to diverge

    Moody's forecasts that delinquency rates for structured assets in Asia (ex-Japan) will diverge in 20...

    News Round-up    1 December 2015
  • Euro secondary lull continues

    The lull in activity seen at the end of last week in the European securitisation secondary market ca...

    SCIWire    1 December 2015
  • SCI Start the Week - 30 November

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

    Pipeline The pace of pipeline additions slowed last week due to Thanksgiving. The final count consi...

    News    30 November 2015
  • Property market sensitivity weighed

    A 20% decline in Australian property values would affect only a small proportion of triple-A rated p...

    News Round-up    27 November 2015
  • Euro secondary slumbers

    The European securitisation secondary market is taking it easy through the US public holiday but mar...

    SCIWire    27 November 2015
  • Spanish repossession recovery to continue

    Moody's expects recoveries on repossessed Spanish properties to continue rising. Recovery rates have...

    News Round-up    26 November 2015
  • Aussie ABS, RMBS defaults to inch up

    The delinquency and default rates for Australian ABS and RMBS will rise slightly next year from thei...

    News Round-up    26 November 2015
  • Euro secondary activity fades

    Activity in the European securitisation secondary market is fading away thanks to the US public holi...

    SCIWire    26 November 2015
  • NPL, RPL RFC issued

    Moody's is requesting feedback on proposed changes to its methodology for rating securities backed b...

    News Round-up    25 November 2015
  • GE portfolio sold off

    GE Capital has agreed to sell a £3.8bn portfolio of first lien mortgage loans from its UK H...

    News Round-up    25 November 2015
  • Bank's LatAm exit raises concerns

    Deutsche Bank's decision to close its operations in Argentina and Mexico is credit negative for the...

    News Round-up    25 November 2015
  • Euro secondary stays strong

    Despite weaker global markets and reduced volumes the European securitisation secondary market is st...

    SCIWire    25 November 2015
  • US RMBS restricted

    Activity and transparency in the US non-agency RMBS secondary market is restricted in this shortened...

    SCIWire    24 November 2015
  • Marketing head brought in

    Clayton Holdings has hired Mark Hughes as evp of sales and marketing. He will be responsible for sal...

    Job Swaps    24 November 2015
  • Euro secondary UK focused

    The heightened focus on UK RMBS is continuing in the European securitisation secondary market. "Ov...

    SCIWire    24 November 2015
  • SCI Start the Week - 23 November

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

    Pipeline Last week it was RMBS and CMBS which dominated the pipeline's additions. In contrast to th...

    News    23 November 2015
  • Largest ACIS deal inked

    Freddie Mac has obtained the largest insurance policy to date under its Agency Credit Insurance Stru...

    News Round-up    23 November 2015
  • Aussie affordability deteriorating

    Moody's reports that housing affordability in Australia has deteriorated significantly over the 12 m...

    News Round-up    23 November 2015
  • Euro secondary undented

    A typically quiet Friday has failed to dent the positive tone in the European securitisation seconda...

    SCIWire    23 November 2015
  • Fighting Irish

    RMBS fundamentals trending up

    The performance of Irish RMBS continues to improve against the backdrop of a stable economy. A poten...

    News Analysis    23 November 2015