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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).


  • RPL credit factors highlighted

    The performance of reperforming mortgage loans (RPLs) since their last modification is crucial in th...

    News Round-up    23 September 2015
  • Euro secondary picks up

    The European securitisation secondary market is seeing a pick-up in activity. Amid a spike in broa...

    SCIWire    23 September 2015
  • Freddie posts record NPL sale

    Freddie Mac says it has sold 5,208 deeply delinquent NPLs worth US$1.1bn, making i...

    News Round-up    22 September 2015
  • Italian mortgage refinancing rising

    Fitch has noted a strong refinancing trend in the Italian mortgage market from end-2014 to 2Q15, whi...

    News Round-up    22 September 2015
  • Euro secondary solid

    The European securitisation secondary market is staying solid despite distractions from elsewhere. ...

    SCIWire    22 September 2015
  • SCI Start the Week - 21 September

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

    Pipeline Fewer deals joined the pipeline last week. At the final count there were three new ABS, tw...

    News    21 September 2015
  • MBS director appointed

    SFIG has hired Dan Goodwin as director of mortgage policy to focus on MBS policy issues. He will rep...

    Job Swaps    21 September 2015
  • Euro secondary mixed

    The European securitisation secondary market continues to experience mixed fortunes amid thin liquid...

    SCIWire    21 September 2015
  • Mexican model replacement mooted

    Moody's is requesting comments on a proposal to replace its rating methodology on Mexican RMBS with...

    News Round-up    18 September 2015
  • Platinum programme streamlined

    Ginnie Mae is amending its Platinum programme's guaranty fee structure and lowering the minimum amou...

    News Round-up    18 September 2015
  • RFC issued on Aussie benchmark

    Analysis undertaken by a number of market participants suggests that a more diverse range of interes...

    News Round-up    18 September 2015
  • Euro secondary keeps quiet

    The European securitisation secondary market was once again quiet yesterday and looks likely to stay...

    SCIWire    18 September 2015
  • US RMBS halted

    Activity in the US non-agency RMBS secondary market has halted this week, but is expected to pick up...

    SCIWire    17 September 2015
  • RMBS losses case settled

    RBS had agreed to pay US$129.6m to the NCUA over a case involving losses related to RMBS that the ba...

    Job Swaps    17 September 2015
  • Euro secondary stalemate

    The European securitisation secondary market stalemate is continuing as participants stay on the sid...

    SCIWire    17 September 2015
  • RMBS comparison tool debuts

    Fitch has launched the SA RMBS Compare, an Excel tool that provides access to the agency's surveilla...

    News Round-up    16 September 2015
  • Irish mortgage restructurings 'credit positive'

    Persistent high levels of late-stage arrears indicate that Ireland's mortgage arrears crisis is not...

    News Round-up    16 September 2015
  • CSP update supplied

    The FHFA has released an update on the Common Securitisation Platform (CSP), detailing progress made...

    News Round-up    16 September 2015
  • Capital markets group adds three

    Wilmington Trust has expanded its global capital markets structured finance group...

    Job Swaps    16 September 2015
  • Euro secondary lull continues

    The European securitisation secondary market's summer lull has morphed into a September one with liq...

    SCIWire    16 September 2015
  • NAIC MBS assumptions 'mixed'

    The NAIC's structured securities group (SSG) last week released recommendations for macroeconomic as...

    News    15 September 2015