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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).


  • Pricing source to expand

    Barclays is set to incorporate third-party pool-level prices into the pricing for MBS index generics...

    News Round-up    10 November 2015
  • Euro secondary stays positive

    Market tone remains broadly positive in the European securitisation secondary market. "Tone remain...

    SCIWire    10 November 2015
  • Invitation chooses to extend

    Invitation Homes has decided to exercise its one-year optional term extension on t...

    News Round-up    9 November 2015
  • Slovak RMBS rating approach published

    Moody's has published its approach to rating Slovakian RMBS, using its MILAN framework. The rating a...

    News Round-up    9 November 2015
  • SCI Start the Week - 9 November

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

    Pipeline The pipeline continued to grow last week as a raft of new deals were announced. In total t...

    News    9 November 2015
  • Mexican RMBS approach published

    Moody's has published its transitioned approach for rating Mexican RMBS using its MILAN fra...

    News Round-up    9 November 2015
  • Euro secondary quiet

    The European securitisation secondary market closed last week quietly and looks set to start today i...

    SCIWire    9 November 2015
  • Amherst welcomes mortgage team

    Standish Mellon Asset Management has strengthened ties with subsidiary Amherst Capital Management by...

    Job Swaps    6 November 2015
  • Broker-dealer adds RMBS trio

    Nathan Hale Capital has made three hires to strengthen its institutional agency RMBS team. The new a...

    Job Swaps    6 November 2015
  • Euro secondary firms up

    Tone in the European securitisation secondary market continues to firm up. Despite the large numbe...

    SCIWire    6 November 2015
  • US RMBS distracted

    Macro concerns are distracting the US non-agency RMBS secondary market. "The market has been fairl...

    SCIWire    5 November 2015
  • AOFM auctions put on hold

    The AOFM has cancelled its previously planned RMBS auctions for November and December. The decision&...

    News Round-up    5 November 2015
  • Low losses for Japanese apartments

    Credit losses on Japanese apartment loans will remain low for Moody's-rated banks because they tend...

    News Round-up    5 November 2015
  • Euro secondary improves

    Yesterday saw further improvement in the European securitisation secondary market, but it is still y...

    SCIWire    5 November 2015
  • Grey area

    Granite casting shadow on European sentiment

    UKAR's sale of the Granite portfolio remains the hot topic in the European RMBS market, with uncerta...

    News Analysis    4 November 2015
  • Mortgage fund inks first investment

    UK Mortgages Limited (UKML), TwentyFour Asset Management's listed closed-ended fund, has signed its...

    Job Swaps    4 November 2015
  • Rating agency targets expansion

    A partnership has been formed between Kroll Bond Rating Agency, the Kroll family and Wharf Street, e...

    Job Swaps    4 November 2015
  • Euro secondary strengthens

    The positive tone in the European securitisation secondary market continues to build. "Overall, we...

    SCIWire    4 November 2015
  • MERS settlement agreed

    Bank of America has agreed to pay US$335m to settle a lawsuit, in which it allegedly misled sharehol...

    Job Swaps    3 November 2015
  • Regulation threatens market viability

    Banks' market making ability in securitised products is set to be severely affected by the Basel Com...

    News    3 November 2015
  • Euro secondary refocuses

    After a couple of quiet sessions the European securitisation secondary market looks set to refocus i...

    SCIWire    3 November 2015