Mortgage Daily Logo

Massive Loss at Thornburg

Mortgage News

Thornburg Mortgage Inc. reported a massive quarterly loss and disclosed that it temporarily halted new loan originations recently. Shareholder equity has been wiped out.

The Santa Fe, N.M.-based company had a $3.3 billion first-quarter loss, according to a filing today with the Securities and Exchange Commission. The huge loss compares to a profit of $65 in the fourth quarter million and a profit of $75 million a year earlier.

Unrealized market value losses as a result of a decline in the value of its mortgage-backed securities and securitized loan portfolios accounted for $1.5 billion of the quarterly loss. Declining home prices were also blamed for the dismal results.

“Despite modestly increasing delinquencies in our loan portfolio and some additional downgrades of our mortgage-backed securities assets, the overall credit performance of our portfolio continues to perform well,” President and Chief Executive Officer Larry Goldstone said in the report. “In the first quarter, as disclosures about the continued deterioration of the credit performance and supply imbalance of mortgage securities became known, we faced a sudden downward spiral in prices on our AAA-rated mortgage assets.”

First quarter originations were $549 million, reflecting a “rapid recovery in loan origination activity” during January and February, Thornburg said. But by March, liquidity concerns forced the company to halt new originations — the second time it has done so since August 2007.

The real estate investment trust has since reinstated originations, funding $239 million since March.

Loans delinquent at least 60 days, including real estate owned, were 0.65 percent as of March 31, climbing from 0.44 percent on Dec. 31 “but still significantly below the industry’s conventional prime ARM loan delinquency ratio of 5.54% at Dec. 31.”

Thornburg reported stockholder equity of $2.0 billion on Dec. 31. Given the $3.3 billion first quarter loss and the $1.35 billion raised in March through a private placement of senior subordinated secured notes, warrants for common stock, and participations in the principal payments on a specific MBS portfolio, the company has virtually wiped out all shareholder equity and may even have a negative net worth.

Company officials were not immediately available to clarify its net worth position.

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Mortgage Servicer Portfolios

servicing news | mortgages outstanding statistics | foreclosure news   Servicing Portfolios as of 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 Residential Servicing Portfolios by Servicer Last Updated December 14, 2018...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Fannie Mae Profile

Last Updated December 27, 2018 7:38 PM Central   full list | other directories | bank search | SEC filings | execs | m&a | production   Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move --...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Freddie Mac Profile

Government Takes Over Fannie, Freddie Sept. 8, 2008 The government has seized control of Fannie Mae and Freddie Mac. The move -- which is likely to push mortgage rates lower and provide a sense of stability for the more than 10,000 employees at both companies -- is a...

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...

Newsletter

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