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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).


  • STS mirage

    "Still no level playing field" despite regulation

    Despite the high bar that issuers must clear to achieve the STS designation on securitisations, the...

    News Analysis    12 August 2019
  • SCI Start the Week - 12 August

    A review of securitisation activity over the past seven days

    SCI CRT awards Don't miss out on your chance to win: the submissions deadline for the inaugural SCI...

    News    12 August 2019
  • AM acquisition

    Sector developments and company hires

    Asset management acquisition Assured Guaranty US Holdings is set to acquire all of the outstanding...

    Market moves    9 August 2019
  • Alt credit co-head hired

    Company hires and sector developments

    Alt credit co-head nabbed Ares has hired Joel Holsinger to its credit group as c...

    Market moves    7 August 2019
  • CLO partner appointed

    Sector developments and company hires

    CLO firm partner promotion DFG Investment Advisers has promoted Timothy Milton to partner. Since j...

    Market moves    6 August 2019
  • SCI Start the Week - 5 August

    A review of securitisation activity over the past seven days

    Market commentary Portuguese RMBS outperformed other securitisation asset classes last week, booste...

    News    5 August 2019
  • CLO head hired

    Sector developments and company hires

    BUMF 6 injunctions granted Final injunctions have been granted against Greencoat Investments (GIL)...

    Market moves    2 August 2019
  • Landmark SRTs inked

    BP Bari completes capital relief trades

    Banca Popolare di Bari has completed two capital relief trades that reference respectively a &eu...

    News    2 August 2019
  • Crunching the numbers

    'Anomalous' acquisition of mortgages 'made economic sense'

    Arbuthnot Banking Group recently acquired two mortgage portfolios from the Raphael Mortgages and Mag...

    News    1 August 2019
  • Under pressure?

    UK non-prime RMBS could be tested in the autumn

    Attention in the UK RMBS market is turning to what might happen in September as the summer lull begi...

    News    1 August 2019
  • Affordable loan credit insurance risk transfer closed

    Sector developments and company hires

    Affordable CIRT closed Fannie Mae has executed a new credit insurance risk transfer (CIRT) transac...

    Market moves    31 July 2019
  • Portuguese boost

    RMBS tightens on call optionality

    Portuguese RMBS outperformed other securitisation asset classes last week, boosted by the surprise c...

    News    31 July 2019
  • QM revisited

    Private mortgage market to fill the void?

    The CFPB’s ANPR in relation to the GSEs’ temporary qualified mortgage provision...

    News Analysis    31 July 2019
  • Winding up order issued for Clifden

    Company hires and sector developments

    Clifden wind up A winding-up order has been issued by the High Court of Justice of the Isle of Man...

    Market moves    29 July 2019
  • Mortgage firm completes residuals sale

    Company hires and sector developments

    Residual sale Charter Mortgages is set to sell its residual economic interest in the Precise Mortg...

    Market moves    26 July 2019
  • Benchmark SRT inked

    Bank of Scotland completes unusual synthetic UK RMBS

    Bank of Scotland has launched its first post-crisis synthetic UK RMBS. Dubbed Syon Securities 2019,...

    News Analysis    25 July 2019
  • Italian renaissance?

    Spike in new issuance supported for now

    The uptick in Italian ABS/MBS primary issuance in the past month or so gives the impression of a lon...

    News Analysis    24 July 2019
  • Esoteric ABS head announced

    Sector developments and company hires

    Esoteric ABS head named MUFG has hired Keith Allman as md and head of esoteric ABS, effective Augu...

    Market moves    23 July 2019
  • ABS head named

    Company hires and sector developments

    Euro ABS head appointed Santander has hired Francesco Dissera as head of continential Europe, secu...

    Market moves    22 July 2019
  • Offshore investment in Chinese ABS soars

    Investors find relative value in second largest ABS market

    Foreign investment in the Chinese ABS market is increasing exponentially, as routes to entr...

    News Analysis    22 July 2019
  • Co-ceo named

    Sector developments and company hires

    Co-ceo named Värde Partners has named Ilfryn Carstairs as co-ceo, alongside co-founder Ge...

    Market moves    19 July 2019