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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).


  • Euro secondary settled

    The European securitisation secondary market is continuing in the settled pattern seen of late. Th...

    SCIWire    12 October 2015
  • Euro secondary stays on track

    Ever-improving broader markets are driving increasingly positive sentiment in the European securitis...

    SCIWire    9 October 2015
  • US RMBS stabilises

    The US non-agency RMBS secondary market has stabilised and activity is slowly increasing again. "I...

    SCIWire    8 October 2015
  • Lack of action puts RMBS on watch

    S&P has placed 22 tranches of 11 European RMBS on creditwatch negative. The move follows var...

    News Round-up    8 October 2015
  • Vice chair steps up

    Walter Investment Management has appointed Denmar Dixon ceo and president, effective from 10 October...

    Job Swaps    8 October 2015
  • Euro secondary return continues

    Activity and prices in the European securitisation secondary market continue to return to normal, bu...

    SCIWire    8 October 2015
  • Euro secondary accelerates

    The pick-up in activity and pricing levels in the European securitisation secondary market is accele...

    SCIWire    7 October 2015
  • SEC raps HLSS over accounts

    The US SEC has charged Home Loan Servicing Solutions (HLSS) for making material misstatements about...

    Job Swaps    6 October 2015
  • Euro secondary slowly improves

    Tone and activity are slowly picking up in the European securitisation secondary market. Bolstered...

    SCIWire    6 October 2015
  • SCI Start the Week - 5 October

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

    Pipeline The number of deals joining the pipeline picked up again last week, with CMBS leading the...

    News    5 October 2015
  • Euro secondary mixed

    Activity in the European securitisation secondary market continues to be mixed. For the most part...

    SCIWire    5 October 2015
  • ESMA reports on rating agencies

    ESMA has published two sets of technical advice and a report on the regulation of credit rating agen...

    News Round-up    2 October 2015
  • RMBS settlement progress tracked

    JPMorgan paid US$3.555bn in consumer relief to 158,107 borrowers through 31 March 2015, according to...

    News Round-up    2 October 2015
  • Agency seeks above-currency comments

    S&P is requesting comments on proposed changes to its methodology for assigning ratings abov...

    News Round-up    2 October 2015
  • US RMBS cautious

    Caution is prevailing in the US non-agency RMBS secondary market. "It's been a very quiet week wit...

    SCIWire    1 October 2015
  • SCI conference line-up unveiled

    Panellists have been confirmed for SCI's 8th Annual Securitisation Pricing, Trading and Risk Seminar...

    News Round-up    1 October 2015
  • Greek RMBS paying 'on time'

    The capital controls that the Greek government imposed in June have had no impact on the timing of i...

    News Round-up    1 October 2015
  • New fund targets SF investment

    Franklin Templeton Investments has launched the Franklin K2 Long Short Credit Fund, which will inves...

    News Round-up    1 October 2015
  • Agency proposes new rating type

    S&P has issued a request for comment on its proposed criteria for assigning a new rating typ...

    News Round-up    1 October 2015
  • Euro secondary improves

    Tone in the European securitisation secondary market is improving in line with broader market sentim...

    SCIWire    1 October 2015
  • Euro secondary drifts

    European securitisation secondary spreads are continuing to drift wider. "Yesterday was very quiet...

    SCIWire    30 September 2015