Mortgage Daily Logo

Crisis Deepens at Thornburg

Mortgage News

Thornburg Mortgage Inc. has reported that one of its lenders will begin liquidating some of its assets because the company defaulted on a credit line — triggering cross-defaults with other lenders.

A letter dated Feb. 28 was sent by JPMorgan Chase Bank N.A. to Thornburg indicating an event of default had occurred on a reverse repurchase agreement dated Aug. 2, 2006, according to a Form 8-K filing with the Securities and Exchange Commission yesterday. The amount of that agreement was around $320 million.

The event was triggered by Thornburg’s failure to meet a $28 million margin call after securities it holds that are backed by Alt-A mortgages declined between 10 percent and 15 percent in value. The real estate investment trust reported Monday that although it had met $300 million in margin calls since Feb. 14, it faced another $270 million in margin calls on its reverse repurchase agreement borrowings outstanding as of Feb. 29.

Meeting last month’s margin calls left Thornburg strapped for case, and the company warned that its inability to meet the latest round of margin calls “would have a material adverse effect on the company’s ability to continue its business in the current manner.”

In its Feb. 28 letter, JPMorgan told the Santa Fe, N.M.-based company it “will exercise its rights under the agreement.”

“The company’s receipt of the notice of an event of default has triggered cross-defaults under all of the company’s other reverse repurchase agreements and its secured loan agreements,” the SEC filing stated. “The company’s obligations under those agreements are material.”

Related:

Liquidity Crisis at Thornburg
Jumbo mortgage lender Thornburg Mortgage Inc. warned today it is facing margin calls that could materially impact its ability to carry on.

Alt-A Liquidity Worsens
Thornburg Mortgage Inc. is facing margin calls on its Alt-A investments.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

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 paperwork has 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 furniture need to...

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...

Newsletter

Don’t worry, we don’t spam