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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).


  • 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
  • GSEs continue risk transfer innovation

    Fannie Mae and Freddie Mac have both priced innovative risk transfer deals. The deals build on&n...

    News Round-up    20 November 2015
  • RMBS uses new servicing fee structure

    Mill City Mortgage Loan Trust 2015-1 has introduced a fee-for-service structure which is un...

    News Round-up    20 November 2015
  • HECM deal rated

    Nationstar Mortgage is marketing an RMBS backed by inactive home equity conversion mortgages (HECM),...

    News Round-up    20 November 2015
  • SFIG proposals 'credit positive'

    SFIG has proposed a transaction parties framework for private-label RMBS which contains a pair of fe...

    News Round-up    20 November 2015
  • Euro secondary accelerates

    The recent uptick in the European securitisation secondary market accelerated further yesterday. A...

    SCIWire    20 November 2015
  • US RMBS steady

    The US non-agency RMBS secondary market is keeping steady. "Anticipation of year-end is increasing...

    SCIWire    19 November 2015
  • Euro HPA 'RMBS positive'

    Recovering house prices in the UK, Ireland, Spain and the Netherlands will help to suppress RMBS dea...

    News Round-up    19 November 2015
  • Aussie arrears at record low

    Australian nonconforming RMBS arrears fell to a record low of 3.99% in September, according...

    News Round-up    19 November 2015
  • Euro secondary tight

    Spreads across the European securitisation secondary market are holding up, but liquidity remains ti...

    SCIWire    19 November 2015
  • Winning NPL bidders named

    Fannie Mae has announced the winning bidders for its third non-performing loan (NPL) sale of approxi...

    News Round-up    18 November 2015
  • CRT deals upgraded on performance

    Moody's has upgraded the ratings of 37 tranches from six credit risk transfer transactions backed by...

    News Round-up    18 November 2015
  • MBS efforts bolstered

    Palmer Square Capital Management has recruited Vesta Marks as a portfolio manager focused on buildin...

    Job Swaps    18 November 2015
  • Euro secondary on the up

    Activity and sentiment are on the up in the European securitisation secondary market. Bolstered by...

    SCIWire    18 November 2015
  • Structured debt chief moves on

    Paul Hastings is set to add Paul Severs to its London office as a partner in its corporate practice....

    Job Swaps    17 November 2015
  • High RMBS severity warning

    Smaller loan balances will keep liquidation severities on US RMBS loans high over the next few years...

    News Round-up    17 November 2015
  • LatAm structured leader added

    Nomura has made three appointments to its emerging markets business in the Americas. Karan Madan, JP...

    Job Swaps    17 November 2015