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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).


  • ABS analyst brought in

    Craig Branca has joined CoreLogic as vp, strategic accounts. The securitisation data analyst moves f...

    Job Swaps    26 October 2015
  • RMBS servicers 'improving'

    US RMBS servicers are showing improvements in managing challenged portfolios amid difficult circumst...

    News Round-up    26 October 2015
  • Invitation extension in the balance

    Kroll Bond Rating Agency has placed all of its outstanding ratings for Invitation Homes 2013-SFR1 on...

    News Round-up    26 October 2015
  • Largest ACIS yet inked

    Freddie Mac has obtained its largest insurance policy to date under its ACIS programme. The transact...

    News Round-up    26 October 2015
  • Euro patterns persist

    The trading patterns seen over the past week or so in the European securitisation secondary market l...

    SCIWire    26 October 2015
  • Nuveen targets Europe

    Nuveen Investments has teamed up with TIAA-CREF Asset Management to provide three new UCITS funds to...

    Job Swaps    23 October 2015
  • Smith files Ocwen update

    A report has been filed by the monitor of the US National Mortgage Settlement, Joseph Smith, reveali...

    News Round-up    23 October 2015
  • Euro secondary solid

    The recent solid performance in the European securitisation secondary market is continuing. Yester...

    SCIWire    23 October 2015
  • US RMBS active

    Activity continues to be strong in the US non-agency RMBS secondary market. "It's been another bus...

    SCIWire    22 October 2015
  • SFR issuance hits milestone

    Morningstar reports that US single-family rental (SFR) securitisation issuance has now topped US$13b...

    News Round-up    22 October 2015
  • No sales for AOFM

    The AOFM will hold its seventh RMBS auction on 8 December, with results announced on the same day. S...

    News Round-up    22 October 2015
  • FNMA unveils actual loss deal

    Fannie Mae has priced its latest credit risk sharing transaction, which is the first to use an actua...

    News Round-up    22 October 2015
  • HAMP payment ramp begins

    In the more than six years that HAMP has been in effect, there have been eight million modifications...

    News    22 October 2015
  • Wachovia claims settled

    Wachovia has agreed to pay US$53m to resolve NCUA claims arising from losses related to purchases of...

    Job Swaps    22 October 2015
  • Euro secondary still strong

    The European securitisation secondary market is continuing to see a strong BWIC calendar and market...

    SCIWire    22 October 2015
  • French true sale RMBS debuts

    Crédit Agricole has closed FCT Crédit Agricole Habitat 2015, a self-led retained s...

    News Round-up    21 October 2015
  • Default predictors identified

    In an analysis of default frequencies of both US agency and non-agency mortgage loans originated fro...

    News Round-up    21 October 2015
  • Euro secondary retains BWIC focus

    BWICs are continuing to dominate the European securitisation secondary market. Thanks in part to a...

    SCIWire    21 October 2015
  • DOJ lawyer moves on

    Geoffrey Graber has joined Cohen Milstein Sellers & Toll as a partner. He will be part of th...

    Job Swaps    20 October 2015
  • BTL rate buffers evaluated

    The prospect of increasing interest rates in the UK is prompting a re-examination...

    News Round-up    20 October 2015
  • Barclays settles with NCUA

    Barclays has agreed to pay US$325m to settle NCUA claims that it sold faulty RMBS. It is the latest...

    Job Swaps    20 October 2015