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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).


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

    News Round-up    3 September 2015
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    Blackstone has bought a significant equity stake in PMI Group through its Blackstone Tactical Opport...

    Job Swaps    3 September 2015
  • Euro secondary still slow

    Despite hopes for a post-August spike, volumes in the European securitisation secondary market are s...

    SCIWire    3 September 2015
  • Origination enhancements 'reduce risk'

    Widespread changes to US residential mortgage origination practices since the financial crisis have...

    News Round-up    2 September 2015
  • Chinese issuance quotas 'positive'

    Moody's says that the People's Bank of China's (PBOC) inaugural approval of issuance quotas for Chin...

    News Round-up    2 September 2015
  • Euro ABS/MBS struggles back to life

    The European ABS/MBS market is slowly struggling back to life after the summer lull. Secondary mar...

    SCIWire    2 September 2015
  • RMBS recoveries revealed

    August non-agency RMBS remittances show cash payouts for three DBALT deals in relation to the Monarc...

    News Round-up    1 September 2015
  • ECB 'behind OWIC increase'

    OWICs have been circulating in the European ABS secondary market in growing numbers. While their sou...

    News    28 August 2015
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    News Round-up    28 August 2015
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    Following the upgrade of the Greek sovereign's issuer default rating to triple-C and revision of the...

    News Round-up    28 August 2015
  • Euro secondary lacks conviction

    Despite an improving overall tone, the European securitisation secondary market continues to lack co...

    SCIWire    28 August 2015
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    The FHA will soon issue guidance on residential property-assessed clean energy (PACE) financing. Kro...

    News Round-up    27 August 2015
  • Aussie delinquencies diverging

    Fitch reports that Sydney's mortgage performance has benefitted the most from the rise in house pric...

    News Round-up    27 August 2015
  • Euro secondary improves

    Tone in the European securitisation secondary market is improving as broader market volatility reduc...

    SCIWire    27 August 2015
  • FHFA plots GSE paths

    The FHFA has adopted a final rule to establish single-family and multifamily housing goals for Fanni...

    News    26 August 2015
  • RMBS trust suit filed

    The FDIC has filed a lawsuit against BNY Mellon over alleged breaches that the bank made as...

    Job Swaps    26 August 2015
  • Euro secondary struggles on

    The European securitisation secondary market continues to struggle on amid broader market volatility...

    SCIWire    26 August 2015
  • US secondary slowdown

    US BWIC supply has slowed to a trickle today across asset classes. Events in China and the feared...

    SCIWire    25 August 2015
  • Euro secondary holds up

    In the face of continuing equity market volatility the European securitisation secondary ma...

    SCIWire    25 August 2015
  • Time to review

    Asset reviewer relevant beyond mandated role

    Public securitisations in the US will soon require an asset reviewer - as mandated by Reg...

    News Analysis    25 August 2015
  • Second NPL pool sold

    Fannie Mae has announced Lone Star as the winning bidder for its second NPL sale that it began marke...

    News Round-up    24 August 2015