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).

  • 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

  • FT snaps up Global ABS and ABS East

    Sale of Invisso by Delinian sees structured finance conferences come under FT Live banner

    The Financial Times has acquired Invisso, parent company of structured credit conferences Global ABS and ABS East, from Delinian. The deal will see the transfer of Invisso’s full portfolio – also including the Central & Eastern European Forum, the Covered Bond Congress and the Global Borrowers and Bond Investors Forum – to the FT Group.

    The transaction comes .......

    News 5 March 2025

  • Israel prepares for market growth

    Recently proposed law to provide certainty for securitisation

    Israel is laying the groundwork for an increase in securitisation transactions, with the recent publication of a proposed law in the Official Gazette to regulate deals. The intention is to bring legal, regulatory and tax certainty to the asset class and follows a ministerial report explicitly aimed at the promotion of securitisation in the country. 

    As a new .......

    News Analysis 3 March 2025

  • Job swaps weekly: Santander rings changes in structured finance division

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Santander making a number of appointments as part of a major reshuffle of its structured finance advisory and lending platform. Elsewhere, DLA Piper has appointed a new co-head of its structured finance practice, while Piper Sandler has snapped up a new md and co-head of its structured finance group.

    Santander has reorganised its structured .......

    Market Moves 28 February 2025

  • EIB inks Spanish resi deal

    Green and sustainable mortgages targeted

    The EIB Group has signed a new synthetic securitisation operation with Santander to provide financing for energy efficiency investments in the Spanish real estate sector, including the construction of new near zero-emission buildings and the renovation of existing residential properties to meet sustainability standards. The investment is being executed in a single securitisation, optimally structured to provide Santander with .......

    News 28 February 2025

  • Europe's solar ABS market plays catch-up

    Continent's solar ABS market trails the US, though potential Italian deal may spark growth

    The European solar ABS market is exploring innovative routes to accelerate issuance, with market insiders anticipating increased activity following last year’s debut public transaction for the continent. Yet, while the European market shares similarities with its glowing US counterpart, key structural differences and macroeconomic volatility continue to cast shade on its emergence.

    The solar ABS market is still .......

    News Analysis 26 February 2025

  • Job swaps weekly: Reckoner launches with backing from RedBird

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees the launch of Reckoner Capital Management, an alternative credit asset manager led by a former Panagram Structured Asset Management ceo and cio. Elsewhere, a former Goldman Sachs partner and securitisation specialist has joined One William Street Capital Management as deputy cio and partner, while Chorus Capital has snapped up a former senior exec .......

    Market Moves 21 February 2025

  • European and UK ABS: strong start, mixed views

    January saw €8.1bn in ABS issuance, with strong de...

    The European ABS market has delivered a dynamic start to the year, with strong issuance activity and robust investor demand, according to monthly European and UK factsheets monitored by SCI.

    TwentyFour AM Momentum Bond Fund’s managers note that January witnessed significant issuance volumes, with €8.1bn in ABS transactions coming to market. The ABS market was particularly diverse, with .......

    News Analysis 20 February 2025

  • Balance sheet expansion eyed

    ABF commoditisation set to boost sector adoption

    Regulatory clarity will be a major theme this year as banks adapt to new capital rules under Basel 4. Investors are closely watching whether banks expand their balance sheets or shift assets into the non-bank sector, particularly in the asset-backed finance (ABF) space.

    Alongside broader regulatory clarity, the potential lifting of Wells Fargo’s US$1.95trn asset cap - .......

    News Analysis 20 February 2025
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