Mortgage Daily Logo
mortgage news from industry experts

Wachovia v. Thornburg

Wachovia v. ThornburgLate payment promised today

August 27, 2007


A late payment on derivatives contracts, which Thornburg Mortgage Inc. has promised to pay today, is being litigated.

Wachovia Bank has filed a lawsuit against Thornburg, seeking more than $5.1 million plus interest and legal expenses for failure to honor derivatives contracts, including a series of interest rate swaps entered into in Oct. 2003.

The swaps agreement was terminated by Wachovia and Santa Fe-based Thornburg on Aug. 13 and Thornburg was required to return nearly $5.124 million in collateral by 6 p.m. on August 15, according to the suit, which was filed Thursday in U.S. District Court for the Southern District of New York.

The suit alleges that Santa Fe, N.M.-based Thornburg, which had to recently halt new mortgage rate locks due to a secondary market freeze up for nonconforming mortgages, has breached the agreement “by refusing to pay Wachovia” the amount due.

“Thornburg Mortgage agreed — and continues to acknowledge — that, pursuant to the agreement, it owes Wachovia $5,123,563.08,” the suit states.

But the suit alleges that on Aug. 22, “Thornburg Mortgage informed Wachovia that it intends to continue to pay other, unrelated counter parties with which it has established business relationships before it pays Wachovia.”

Thornburg, a spokeswoman for the real estate investment trust told, was “surprised by Wachovia’s complaint. As previously agreed to by both parties, Thornburg Mortgage will fulfill its obligation to Wachovia on Monday [Aug. 27].”

She would comment no further.

In its suit, Wachovia seeks payment of the $5.123 million plus legal expenses, interest, including “default interest,” and “such further relief” the court “may deem just and proper.”

A Wachovia spokeswoman told that because the suit is pending litigation she could say only that the suit was filed to “seek payment of a legitimate obligation.”

Jerry DeMuth is an award winning journalist who has been reporting for four decades.

e-mail Jerry at

Thornburg profile

Wachovia profile

next story

back to current headlines

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts