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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).


  • Everbank servicing rights sold

    Everbank has sold the servicing rights of 4,682 loans in ten Alt-A RMBS transactions to Nat...

    News Round-up    22 December 2015
  • Software firm acquired

    CoreLogic is set buy software firm FNC for US$475m. The agreement will see it inherit FNC's...

    Job Swaps    22 December 2015
  • Freddie sells NPLs to non-profit

    Freddie Mac has sold via auction 103 deeply delinquent NPLs serviced by Wells Fargo from its mortgag...

    News Round-up    22 December 2015
  • RPL approach updated

    Fitch has updated its approach for rating RMBS backed by seasoned and reperforming loan (RPL) collat...

    News Round-up    21 December 2015
  • Payment allocation scrutinised

    Kroll Bond Rating Agency has placed its ratings related to 34 classes from RPMLT 2014-1 Trust on wat...

    News Round-up    21 December 2015
  • Granite redemptions scheduled

    NRAM has exercised its seller call option for Granite Mortgages 2003-2, 2003-3, 2004-1, 2004-2, 2004...

    News Round-up    21 December 2015
  • SCI Start the Week - 21 December

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

    Pipeline The pipeline grew very quiet last week. The only deal to be added without disappearing bef...

    News    21 December 2015
  • Innovative CIRT issued

    Fannie Mae has completed its final Credit Insurance Risk Transfer deal of 2015 - the first...

    News Round-up    18 December 2015
  • Italian regs boost ABS

    The Bank of Italy's regulatory framework enacted in 2015 for financial intermediaries carrying out s...

    News Round-up    18 December 2015
  • FHFA scorecard heralds change

    The FHFA has released its 2016 scorecard for the GSEs and Common Securitization Solutions (CSS). Hig...

    News    18 December 2015
  • Delavaco performance triggers breached

    The underperformance of the Delavaco loan backing FirstKey Lending 2015-SFR1 - the first multi-borro...

    News Round-up    18 December 2015
  • Euro secondary stalls

    Activity in the European securitisation secondary market has stalled. Year-end illiquidity was ful...

    SCIWire    18 December 2015
  • Bloomberg to buy BRAIS

    Bloomberg has agreed to acquire the Barclays Risk Analytics and Index Solutions (BRAIS) business&...

    Job Swaps    17 December 2015
  • Greek foreclosure effect limited

    A new foreclosure framework will only offer limited benefit to Greek RMBS transactions, says Fitch....

    News Round-up    17 December 2015
  • Fed to maintain MBS policy

    In a unanimous decision by the FOMC, the US Fed announced yesterday that it is mov...

    News Round-up    17 December 2015
  • Counterparty rating actions inked

    S&P has taken various credit rating actions on 74 tranches in 33 European RMBS and ABS trans...

    News Round-up    17 December 2015
  • Euro secondary chugs along

    Despite wider credit market volatility the European securitisation secondary market is still maintai...

    SCIWire    17 December 2015
  • Aussie equity cushions increase

    Rising house prices have pushed down Australian RMBS LTV ratios, says Moody's. The additional equity...

    News Round-up    16 December 2015
  • Litvak case set for retrial

    The Second Circuit Court of Appeals has reversed the conviction of former Jefferies md Jesse Litvak...

    Job Swaps    16 December 2015
  • Liquid launch

    Agency RMBS favoured ahead of Fed lift-off

    A 25bp increase in the Fed funds target rate is widely expected to be announced later today. The pac...

    News Analysis    16 December 2015
  • Euro secondary split

    Activity and price direction in the European securitisation secondary market is currently split in t...

    SCIWire    16 December 2015