Contents
Definition
Residential MBS (Also RMBS) denotes Residential Mortgage-Backed Securities, which are trust certificates (bonds) backed by a pool of residential mortgage loans. This is a broad class of Securities that package (bundle) large number of mortgages. The performance of the security is linked to the performance of the underlying loans in potentially quite intricate ways.
Structure
The main technique used in securitisation structures is the introduction of "tranches", that is distinct investable bond instruments whose access to the underlying pool cashflows is defined in a non-linear way.
The objective is to manage:
History
- RMBS have seen their first large expansion in US financial markets
Issues and Challenges
They are issued by banks and backed by an underlying pool of residential mortgages. There can be some distinctions between prime RMBS and sub-prime/non-conforming RMBS although there is no consensus about what constitutes a sub-prime/non-conforming mortgage in Europe.
External Links
References
Disclaimer
This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.
| IsDefinedBy URI of an entity that is defined via an imported vocabulary. | https://spec.edmcouncil.org/fibo/ontology/SEC/Debt/AssetBackedSecurities/MortgageBackedSecurities/index-en.html + |
