Structured Credit Investor SCI’s 5th Annual Capital Relief Trades Seminar 17 October 2019, London
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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).


  • Performance blueprint

    Positive predictions for NPL securitisations

    Northern Italian non-performing loan portfolios are performing better than Southern Italian portfoli...

    Talking Point    19 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    Alternatives alliance DWS Group and Tikehau Capital have entered into an alliance, following Tike...

    Market moves    18 October 2018
  • Primary energy

    European ABS primary market update

    The European primary RMBS market has come to life after the BPCE Home Loans FCT 2018 priced today (1...

    Market Reports    18 October 2018
  • Latest SCI podcast now live

    SCI podcast episode two has been released

    SCI’s latest podcast is now live. This month the team discuss the African Development Bank...

    News    18 October 2018
  • Steady subscription

    European ABS primary market update

    European primary ABS activity continues to be robust. In the RMBS sector, the BPCE Home Loans FCT 20...

    Market Reports    17 October 2018
  • Market moves update

    Company hires and sector developments in structured finance

    CRT poll results The results from SCI’s ‘What’s in a name?’...

    Market moves    17 October 2018
  • 'Aggressive' underwriting eyed

    UK RMBS remains 'robust' in face of Brexit

    While the UK buy-to-let (BTL) sector has suffered under new regulatory policies and Brexit uncertain...

    Talking Point    17 October 2018
  • Hurdle cleared

    First post-crisis RMBS for Wells Fargo

    Wells Fargo is in the market with its first post-crisis prime US RMBS. Named Wells Fargo Mortgage Ba...

    News    15 October 2018
  • Market moves update

    OFS equity investment OFS Credit Company has disclosed that it has invested in the equity tranches...

    Market moves    15 October 2018
  • SMBC debuts

    Structured covered bond programme readied

    Sumitomo Mitsui Banking Corp (SMBC) is prepping a €20bn dual-recourse structured covered bo...

    News    15 October 2018
  • SCI Start the Week - 15 October

    A review of securitisation activity over the past seven days

    Market commentary Robust demand was seen in both the European and US CLO markets last week (SCI 9 O...

    News    15 October 2018
  • Market moves - 12 October

    Company hires and sector developments in structured finance

    Cliff edge concerns ISDA has published a paper highlighting widespread concerns in Europe that the...

    Market moves    12 October 2018
  • Secondary ticking up

    European securitisation market update

    A handful of BWICs are out for the bid today as activity in the European ABS secondary market picks...

    Market Reports    12 October 2018
  • Trading opportunities

    Credit risk transfer continues to evolve

    Freddie Mac’s recent STACR 2018-DNA3 RMBS marked a further evolution of its credit risk tr...

    News Analysis    9 October 2018
  • Primary surge

    European ABS primary market update

    European primary ABS activity is finally picking up. The PBD Germany Auto ABS transaction is expecte...

    Market Reports    8 October 2018
  • SCI Start the Week - 8 October

    A review of securitisation activity over the past seven days

    Market commentary The European ABS primary market saw a lull in activity last week, which left some...

    News    8 October 2018
  • Market moves - 5 October

    New hires and company developments in the structured finance sector

    Europe Apollo Global Management has named Brigitte Posch md, head of emerging markets in London. S...

    Market moves    5 October 2018
  • Heavy supply?

    European primary ABS market update

    A new RMAC UK non-conforming RMBS has been announced, while the BPCE Home Loans 2018 deal is expecte...

    Market Reports    5 October 2018
  • ABS lull

    European ABS primary market update

    The European ABS primary market is seeing a lull in activity, which is leaving some traders uncertai...

    Market Reports    3 October 2018
  • Automated validation

    Mobile app streamlines RMBS underwriting

    Atom Bank is readying its debut UK prime RMBS. Dubbed Elvet Mortgages 2018-1, the £571.58m...

    News    2 October 2018
  • SCI Start the Week - 1 October

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

    Conference SCI’s 4th Annual Capital Relief Trades Seminar is taking place on 16 October...

    News    1 October 2018