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).


  • STS-compliant ABS issuance to be 'higher than expected'

    Lack of certainty continues around areas of Securitisation Regulation

    The EU Securitisation Regulation came into force as of 1 January this year, despite several parts of...

    News Analysis    16 January 2019
  • First steps

    Manufactured housing RMBS to re-emerge?

    The assignment by Fitch of a primary manufactured housing (MH) specialty servicing rating of RPS3- t...

    News Analysis    16 January 2019
  • SCI Start the Week - 14 January

    A review of securitisation activity over the past seven days

    Transaction of the week BBVA has completed an innovative transaction that synchronises credit event...

    News    14 January 2019
  • US firms see flurry of hires

    Sector developments and company hires

    US Bay Crest Partners has bolstered its fixed income business with a trio of senior hires: Tadeusz...

    Market moves    10 January 2019
  • UK tax partner pinched

    Sector developments and company hires

    UK Hunton Andrews Kurth has recruited David Klass as a partner in its London office. Klass brings...

    Market moves    8 January 2019
  • Banca Carige placed into temporary administration

    NPL disposals 'could be accelerated'

    Banca Carige has been placed into temporary administration by the European Central Bank (ECB) follow...

    News Analysis    4 January 2019
  • GSE footprint

    FHFA changes to bring housing market reform?

    President Trump’s nomination of Mark Calabria, currently chief economist for Vice Presiden...

    News Analysis    20 December 2018
  • Japanese dependence

    European ABS market update

    European ABS markets have effectively closed for the year. Deals in the pipeline are now expected to...

    Market Reports    19 December 2018
  • Cerberus explores RMBS options

    Sector developments and company hires

    Granite alternatives Cerberus European Residential Holdings is exploring strategic alternatives wi...

    Market moves    17 December 2018
  • Landmark transaction launched

    UK RMBS is first securitisation tied to SONIA rate

    The first securitisation with liabilities tied to the Sterling Overnight Index Average (SONIA) rate...

    News    17 December 2018
  • SCI Start the Week - 17 December

    A review of securitisation activity over the past seven days

    Market commentary European CMBS BWIC activity swelled after the Taurus 2018-3 DEU deal priced last...

    News    17 December 2018
  • STS guidelines published

    Sector developments and company hires

    P2P head hired Dynamic Credit has hired Giles Andrews as chairman of its supervisory board. The bo...

    Market moves    13 December 2018
  • Bid scarcity

    European ABS market update

    A major UK bank is focusing efforts of European NPLs in the coming weeks, as spreads continue to wid...

    Market Reports    7 December 2018
  • BTL securitisation planned

    Sector developments and company hires

    Europe Accunia has promoted Mads Romild as head of Accunia’s CLO platform. Romild will c...

    Market moves    6 December 2018
  • Split-mortgages securitised

    PTSB completes second NPL transaction

    Permanent TSB last week completed its second major transaction to reduce its non-performing loan rat...

    News    5 December 2018
  • Enforcement uncertainty

    Set-back for STS-eligible issuance

    The recent statement issued by the Joint Committee of the ESAs (SCI 4 December) is unlikely to be su...

    News    5 December 2018
  • Proportional approach

    ESAs tackle delay in transparency requirements

    The joint European Supervisory Authorities (ESAs) - which consist of the EBA, ESMA and the European...

    News    4 December 2018
  • SCI Start the Week - 3 December

    A review of securitisation activity over the past seven days

    Market commentary European ABS activity remained subdued last week, with spreads drifting wider, du...

    News    3 December 2018
  • Funding boost for online lender

    Sector developments and company hires

    Alesco CDOs transferred The collateral management agreements for the Alesco Preferred Funding X to...

    Market moves    29 November 2018
  • Term leveraging

    European ABS market update

    The European primary ABS market is still drifting wider, due to concentration of supply. &ldqu...

    Market Reports    29 November 2018
  • Green wave

    International RMBS market update

    A pair of RMBS bid-lists comprising mostly senior non-conforming and prime collateral are set to hit...

    Market Reports    27 November 2018