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).

  • European ABS stands firm amid volatility

    European and UK ABS defy volatility with strong Q1 issuance,...

    Despite growing geopolitical tensions, rate uncertainties and a spike in volatility toward the end of March, European and UK ABS have proven resilient, and in some areas, remarkably buoyant, according to monthly European and UK factsheets monitored by SCI.

    TwentyFour AM Momentum Bond Fund’s managers report €11bn of issuance across ABS sectors during March, highlighting “a significant uptick” in consumer and auto .......

    News 22 April 2025

  • Job swaps weekly: 400CM promotes five as investment strategy heads

    Securitisation people moves and key promotions

    This week’s round-up of job swaps sees 400 Capital Management (400CM) beef up its securitisation strategy team with a handful of promotions. Elsewhere, Ares Management Corporation has named a co-head of Europe for alternative credit, while Taylor Wessing has strengthened its banking and finance team.

    400 Capital Management has announced five new heads of investment strategy. Portfolio manager Quinn .......

    Market Moves 17 April 2025

  • JPMorgan's latest prime RMBS blurs lines with non-QM

    Innovative transaction adds non-QM-like protections with mod...

    JPMorgan’s latest prime US RMBS deal, JPMorgan Mortgage Trust 2025-3 (JPMMT 2025-3), presents structural features typically seen in non-QM or subprime transactions. Indeed, the recently announced US$418.41m deal features a senior step-up coupon structure and a modified sequential payment waterfall – used for the first time on a publicly rated prime jumbo transaction. 

    The modified sequential structure will .......

    News 16 April 2025

  • ORDE breaks records with RMBS debut and eyes global expansion

    ORDE Financial's ceo Paul Wells, debt capital marke...

    Q: What were the key factors that contributed to the success of your inaugural A$1bn RMBS issuance?
    A: Reflecting on our inaugural A$1bn RMBS transaction, ORDE Series 2024-1 – recognised as the largest inaugural non-bank RMBS issuance in Australian history – the success of the deal was the result of a deliberate, long-term strategy focused on building scalable, transparent and trusted .......

    Provider Profile 16 April 2025

  • Tariff tensions drive unease in European securitisation amid mounting volatility

    CLOs, CMBS and SMEs flagged as first in line to feel the heat from Trump's trade war

    Escalating trade tariffs from the second Trump administration are sending shockwaves through the global financial markets – and European structured finance is no exception. While immediate credit deterioration remains unlikely, the wheels of spread widening, shifting investor sentiment and heightened uncertainty are already in motion.

    "It’s no secret that recent market turmoil has created quite a bit of .......

    News 14 April 2025

  • Enra makes first charge RMBS debut with Elstree 2025-1 1st

    Enra's inaugural first charge RMBS deal highlights disciplin...

    Enra Specialist Finance’s Elstree 2025-1 1st transaction marks a significant milestone as the firm’s inaugural securitisation of loans secured solely by first charge residential mortgages. This debut in the first charge mortgage space showcases Enra’s commitment to RMBS markets and the RMBS investor base. Well-supported by the market, the deal adds to the firm’s track record of programmatic .......

    News Analysis 14 April 2025

  • Esoterics gather steam in APAC securitisation market

    Demand for new asset classes could bring rapid expansion of securitisation in region

    Traditional asset-backed securities in the Asia Pacific (APAC) region could become overshadowed by emerging asset classes and new players, as the demand for esoteric investments increases.

    The securitisation market in the Asia Pacific (APAC) region is well stablished, particularly in countries such as China, Australia, South Korea, and Japan, where annual issuance reaches billions of dollars. With China .......

    News Analysis 7 April 2025

  • Job swaps weekly: KBRA head of CMBS surveillance and research retires

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees KBRA naming a successor to outgoing head of CMBS surveillance and research Roy Chun, who is to retire. Elsewhere, Jefferies has named a new fixed income chief risk officer, while and MDPG Advisory director and an S&C Capital founder have formed a new London-based litigation finance and advisory .......

    Market Moves 4 April 2025

  • Job swaps weekly: Morgan Lewis snaps up former SEC lawyer

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Morgan Lewis hiring a structured finance specialist and former SEC special counsel as partner. Elsewhere, Marathon Asset Management has promoted a long-standing senior portfolio manager to partner, while Close Brothers Property Finance has added two senior professionals to its new structured finance team in London.

    Morgan Lewis has hired the .......

    Market Moves 28 March 2025

  • Firstmac's 'Eagle' spreads wings in commercial SMSF market

    A$1bn transaction sees mortgage lender turn to international investors in expansion of programme

    Firstmac priced its largest RMBS deal to date earlier this month, in a deal that saw the mortgage lender expanding its investor base overseas. The A$1bn Australian prime RMBS transaction – Firstmac Mortgage Funding Trust No 4 Series Eagle No 5 – was backed by self-managed super fund (SMSF) loans and upsized from A$500m due to strong .......

    News 27 March 2025

  • Insurer appetite for SRTs on the rise

    IACPM survey shows substantial growth of unfunded protection

    Insurer provision of unfunded protection on tranches of SRT transactions has increased significantly year-on-year. The number of protections sold rose to 82 new subscriptions in 2024, versus 45 the previous year, according to the IACPM’s latest Global SRT Insurance Survey.

    Respondents insured €2.8bn of European SRT transactions last year, compared to €1.2bn in 2023. The average insured amount .......

    News 27 March 2025

  • SCI In Conversation Podcast: Jason Smilovitz and Midroog's Moty Citrin (part 2)

    We discuss the hottest topics in securitisation today...

    In the second part of this episode of the SCI In Conversation podcast, SCI’s Selvaggia Cataldi continues her discussion about Israel’s securitisation market with Moty Citrin, head of financial institutions and structured finance at Moody’s subsidiary Midroog, and independent senior securitisation consultant Jason Smilovitz.

    Citrin and Smilovitz discuss the impact of the country's recent legislative changes, investor sentiment, market liquidity, .......

    News Analysis 27 March 2025

  • Finance Ireland's second auto ABS signals growing EV momentum

    Latest deal strengthens issuer's ABS framework, boosts investor demand, and drives EV exposure

    Finance Ireland has recently priced its second auto ABS transaction, marking another milestone in its securitisation program. Following its debut deal in October 2023, the latest issuance reflects refinements based on investor feedback and past performance, further solidifying the issuer's presence in the European ABS market.

    The structuring of the new deal closely mirrors Finance Ireland’s previous auto .......

    News Analysis 25 March 2025

  • Job swaps weekly: Gandy returns to the SRT fold

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees SRT veteran Steve Gandy return to the industry as a board member at an SRT-focused fintech business. Elsewhere, Simpson Thacher & Bartlett has appointed a New-York-based securitisation-focused partner, while Trafigura Group has named a new global head of structured finance.

    Iconicchain, a Finnish fintech specialising in SRT services for issuers, .......

    Market Moves 21 March 2025

  • SCI In Conversation Podcast: Moty Citrin, Midroog, and Jason Smilovitz, independent consultant

    We discuss the hottest topics in securitisation today...

    In this episode of the SCI In Conversation podcast, SCI’s Selvaggia Cataldi speaks to Moty Citrin, head of financial institutions and structured finance at Moody’s subsidiary Midroog, and independent senior securitisation consultant Jason Smilovitz about the evolution of Israel’s securitisation market. In light of a new law aligning the country with global standards, Citrin and Smilovitz discuss how the legislative .......

    News Analysis 21 March 2025

  • European and UK ABS robust in February amid diverging outlooks

    European and UK ABS and MBS markets maintain their...

    February proved to be a strong month for European and UK ABS and MBS markets, with spreads tightening and issuance levels exceeding the previous year, according to monthly fact-sheets monitored by SCI.

    Aegon reports that European ABS markets performed strongly despite broader market volatility, noting that non-senior tranches saw higher demand than senior tranches. TwentyFour echoes this, stating that mezzanine ABS .......

    News 20 March 2025

  • SCI in Focus: Specialist RMBS set for robust 2025

    Non-bank lenders to see continued growth amid strong investor appetite and ongoing innovation

    The UK’s specialist lender RMBS market saw a year of strong activity in 2024, with new issuers entering the space, solid investor demand and attractive spreads – a trend that is expected to persist in 2025. In particular, niche lending to underserved borrower segments is expected to see growth.

    Total European RMBS issuance reached €122.6bn last year, .......

    News Analysis 20 March 2025

  • TwentyFour rides Aussie ABS wave to new highs

    Australia's securitisation market soared to A$80.3bn in 2024...

    A new report from TwentyFour Asset Management underscores the rapid transformation of the Australian securitisation market, which reached a record-high issuance of A$80.3bn (€46.6bn) in 2024. According to the firm, strong growth across all sectors, particularly in RMBS, has cemented Australia’s position as an increasingly attractive market for global investors.

    "Non-bank lenders significantly increased RMBS issuance, benefiting .......

    News 18 March 2025

  • Job swaps weekly: Wellington launches private real estate credit platform

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Wellington Management make a number of appointments to its newly launched private real estate credit platform. Elsewhere, KBRA Analytics has named a new chief strategy officer, while Marsh has appointed a head of political risk and structured credit.

    Wellington Management has expanded its private investing capabilities with the formation of .......

    Market Moves 14 March 2025

  • Paragon's covered bond revives BTL RMBS HQLA debate

    JP Morgan questions regulatory inconsistencies as covered bo...

    Paragon Bank’s recent foray into the covered bond market has reignited the debate over High-Quality Liquid Asset (HQLA) eligibility for BTL RMBS. While Paragon’s new covered bond enjoys HQLA Level 1 status under the Liquidity Coverage Ratio (LCR), senior BTL RMBS bonds remain ineligible, even if they meet STS criteria.

    The UK lender, historically a major issuer of .......

    News 14 March 2025

  • Job swaps weekly: Accunia bolsters Copenhagen team

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Accunia Credit Management adding two structured finance pros to its Copenhagen office. Elsewhere, Pallas Partners has snapped up two partners from Kasowitz Benson Torres, while fintech firm Inbank has elected a senior structured finance executive from Spectrum Principal Asset Management to its supervisory board.

    Accunia Credit Management has hired two .......

    Market Moves 7 March 2025
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