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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).


  • Aussie auctions progress

    The AOFM has released details of its sixth RMBS auction, to be held on 23 November. Securities up fo...

    News Round-up    15 September 2015
  • Loan-level data reveals GSE differences

    The loan-level data recently disclosed by Fannie Mae (SCI 4 August) reveals similarities between his...

    News Round-up    15 September 2015
  • Euro ABS/MBS keeps BWIC focus

    The European ABS/MBS secondary market is continuing to revolve around BWICs "We've been fairly bus...

    SCIWire    15 September 2015
  • Spanish house prices stabilising

    Recent data indicates that the decline in Spanish home prices has bottomed out, according t...

    News Round-up    14 September 2015
  • Nevada rulings support FHFA position

    The US District Court for Nevada recently issued three rulings that Moody's believes are credit posi...

    News Round-up    14 September 2015
  • Interest capitalisation mods scrutinised

    The increasing use of interest capitalisation modifications is credit negative for US RMBS due to th...

    News Round-up    14 September 2015
  • SCI Start the Week - 14 September

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

    Pipeline It was another active week for the pipeline, with four new ABS and six CMBS added. There w...

    News    14 September 2015
  • US, European issuance forecast

    S&P projects that US securitisation issuance levels for 2015 and 2016 will...

    News Round-up    14 September 2015
  • Euro secondary stays stable

    The European securitisation secondary market closed out Friday fairly quietly but with spreads still...

    SCIWire    14 September 2015
  • Dutch RMBS delinquencies drop

    The Dutch RMBS market saw a continued decrease in delinquencies but a modest increase in cumulative...

    News Round-up    11 September 2015
  • SFR servicing scarcity underlined

    The limited number of special servicers available to administer US single-family rental (SFR) proper...

    News Round-up    10 September 2015
  • MBS guide rules updated

    Ginnie Mae has made a number of updates to its issuer business status criteria in its MBS g...

    News Round-up    9 September 2015
  • Rates masking RMBS risk

    Moody's suggests that low interest rates are currently masking key drivers of Australian mortgage de...

    News Round-up    9 September 2015
  • Traders charged with RMBS fraud

    The SEC has charged three traders over lying to customers with regard to ...

    Job Swaps    9 September 2015
  • Real estate legal pro tapped

    Allen & Overy has appointed Lucy Oddy to its real estate finance group. Joining fro...

    Job Swaps    9 September 2015
  • SCI Start the Week - 7 September

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

    Pipeline Last week six ABS, five RMBS, one CMBS and two CLOs were added to the pipeline. The CMBS w...

    News    7 September 2015
  • RMBS tail risk protections examined

    All post-crisis US jumbo RMBS have credit enhancement floor protections built in to protect...

    News Round-up    4 September 2015
  • CRT rating upgrades begin

    Moody's is the first rating agency to upgrade CRT bonds after taking action on CAS 2014-C01 M1, STAC...

    News Round-up    4 September 2015
  • Euro secondary ticks up

    Broader market improvement on the back of the message from the ECB and the Chinese holiday has exten...

    SCIWire    4 September 2015
  • US RMBS on hold

    The US non-agency RMBS secondary market is effectively on hold until after the long weekend. "It's...

    SCIWire    3 September 2015
  • Rates hold back Aussie arrears

    Relatively low arrears for housing loans underlying prime RMBS in Australia are due to borrowers ben...

    News Round-up    3 September 2015