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).
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Australian ABS undergoing period of transition
Bank retreat diversifying securitisation landscape
The Australian ABS market is undergoing a period of transition, driven by reduced activity from major banks, growing participation from non-bank lenders and a slow but steady evolution in green securitisation. These themes were discussed during the Australian Securitisation Forum’s recent London Investor Seminar, during which speakers discussed funding dynamics, environmental risk considerations and consumer resilience amid tightening financial .......
News 16 June 2025
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Job swaps weekly: RenaissanceRe promotes senior SRT executives
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees RenaissanceRe elevating two SRT leaders in a round of senior executive promotions. Elsewhere, Bayview Asset Management is building out its ABF capabilities with the addition of a senior advisor in its insurance asset management business, while AlbaCore Capital Group has appointed an md and portfolio manager for its European CLO platform.
Market Moves 13 June 2025
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Views from Barcelona: EC vote, positive CLO outlook and fintech considerations
Global ABS participants anticipate smoother sailing ahead fo...
Securitisation markets may benefit from increased stability in the months ahead, according to speakers at FT Live Fixed Income Events' Global ABS conference. Practitioners broadly expressed hope that turbulence surrounding Trump’s Liberation Day tariffs was easing, and looked ahead as the European Commission prepares to vote on the joint committee proposals for EU securitisation regulation.
The new proposed .......
News 11 June 2025
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Job swaps weekly: Howden acquires Granular Investments to bolster CRT capabilities
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Howden make a major acquisition to strengthen its European credit risk transfer capabilities, which will see two vendor founders work closely with its global credit and political risk team. Elsewhere, the TCW Group has named three co-portfolio managers to lead its newly launched private asset-backed finance interval fund, while a former .......
Market Moves 6 June 2025
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European DataWarehouse expands to India with Bangalore office
New hub to serve global clients and develop securitisation products
European DataWarehouse (EDW) has started its operations in India by opening a new office in Bangalore. The goal of the company’s new centre for IT operations is to provide round-the-clock service for clients operating in non-European time zones, with software development and support for EDW’s flagship platforms on securitisation.
Dr Christian Thun, ceo at EDW, tells .......
News 4 June 2025
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SCI In Conversation Podcast: Scott Frame, Bank Policy Institute
We discuss the hottest topics in securitisation today...
In this episode of SCI In Conversation, Scott Frame, senior vice president and deputy head of research, at the Bank Policy Institute in Washington DC, talks to US editor Simon Boughey about how post-GFC regulation capped growth in the securitisation market and what types of beneficial changes might emanate from the current administration.
This episode can be accessed News Analysis 30 May 2025
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Job swaps weekly: Lane42 names senior execs for new strategy launch
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Lane42 Investment Partners naming six senior executives to spearhead the launch of its capital opportunities investment strategy. Elsewhere, K&L Gates has promoted a structured finance partner to global managing partner, while DunPort Capital Management has followed the launch of its strategic partnership with Vertis Capital Partners by making three senior leadership .......
Market Moves 30 May 2025
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'Strong comeback' for European ABS market
Managers highlight mezz demand amid Liberation Day volatility
The European and UK ABS/MBS market was last month dominated by volatility from the US Liberation Day tariff announcements, which significantly disrupted global trade and financial markets. Monthly fund factsheets monitored by SCI suggest that asset managers are repositioning to mitigate losses from anticipated macroeconomic impacts and identifying where demand is now concentrated.
The wider macroeconomic issues tested .......
News 23 May 2025
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TAMI 2 marks new phase for UK ERM securitisations
Issuance of MA-compliant RMBS expected to rise in 2H25 as regulations evolve
The UK’s equity release mortgage (ERM) securitisation market is gaining traction, with the latest deal - TAMI Senior Securitisation 2 - marking a new phase and a repeatable model for Matching Adjustment (MA)-compliant structures. Following the blueprint set by its predecessor, LMF1, TAMI 2 reflects growing institutional appetite and regulatory momentum ahead of an expected uptick in ERM .......
News 23 May 2025
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Job swaps weekly: LGT names leadership team for European CLO platform
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees LGT Capital Partners making senior appointments to support the launch of dedicated European CLO management platform Legato. Elsewhere, Reed Smith has hired a new partner to serve as head of its Asia-Pacific corporate trust and agency practice, while Ogier has recruited a counsel in its Luxembourg-based banking and finance team.
Market Moves 23 May 2025
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Job swaps weekly: MUFG snaps up Barclays head of CLO primary
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees MUFG hiring Barclays’ head of CLO primary as md and head of CLO. Elsewhere, Starwood Capital Group has appointed a cio for its newly launched Starwood Insurance Strategies platform, while Obra Capital has promoted from within, as it also names a new cio.
MUFG has appointed Barclays’ John Clements as .......
Market Moves 9 May 2025
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European structured finance sees strongest Q1 since GFC, driven by record CLOs
Momentum from late 2024 carries into Q1, led by CLOs and SME deals amid steady investor demand
European securitisation markets began 2025 with robust momentum, according to Morningstar DBRS’s latest quarterly outlook, underpinned by record-breaking issuance volumes and significant growth in the CLO segment. Total securitisation issuance for Q1 2025 reached €67.5bn, a 5.0% increase from the €64.3bn recorded in Q4 2024. Notably, investor-placed issuance surged to €38.3bn—marking the highest Q1 volume since .......
News Analysis 30 April 2025
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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
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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
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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
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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?
Provider Profile 16 April 2025
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 .......
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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
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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
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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