RMBS


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RMBS

Residential Mortgage-Backed Security

A derivative whose value is derived from home equity loans and mortgages on properties where people live. As with all mortgage-backed securities, this entitles the owner to a claim on the principal and interest payments on the particular mortgages underpinning the security. MBS's pay an interest rate that is usually related to the interest rates the homeowners are paying on their mortgages. The equivalent of the coupon on a mortgage backed security is a percentage of the interest and principal paid on the mortgages backing the security. An obvious risk to a residential MBS is the possibility that interest rates on home loans may decline, causing homeowners to refinance their mortgages and deprive the holder of the security from future interest payments.
References in periodicals archive ?
The performance of the Irish and Greek RMBS markets continued to deteriorate over the past year, it added.
CUNA Mutual said it relied on RBS's quantitative representations in deciding to purchase 15 certificates in the10 separate RMBS offerings.
Performance varies across three segments: transactions sponsored by government entities Infonavit and Fovissste perform well; bank RMBS exhibit mixed credit metrics; and non-bank-sponsored transactions backed by Sofoles loans remain stressed.
Rating migrations are still expected, especially on the 492 tranches currently on review for downgrade and which include significant exposures to Spanish and UK Non-conforming RMBS, ABS of SME and Spanish consumer loans," cautions Mr.
RMBS Cash Flow Analysis Criteria' (April 19, 2012);
With the addition of these newest recruits the RMBS Group has grown to over 24 people.
Fitch has already incorporated the increase in resolution times and loss severities into its ratings analysis of outstanding rated RMBS bonds.
The Mexican RMBS Addendum incorporates an increased data analysis observation period, including 2008-2010, a period of significant downturn in the Mexican economy and housing market.
While the improvements in Subprime and Alt-A RMBS delinquencies are noteworthy, the portion of borrowers who were current on their mortgage the previous month and became delinquent the next (monthly current-to-delinquent roll rates) remained elevated.
RMBS Recovery Rating (RR) analysis, according to a study by Fitch's Insurance and RMBS groups of the National Association of Insurance Commissioners' (NAIC) 'RMBS Initiative' results.
Given the recent enhancements made to the ResiLogic model, which include default and loss assumptions based on home price changes between loan origination and current age as well as additional penalties to account for the higher risk attributes, the revised surveillance methodology may result in higher credit enhancement levels for prime RMBS at each rating category, particularly for those from the post-2004 vintages
subprime RMBS transactions as part of its ongoing review of subprime RMBS.