Thornburg back from the brink, and old mortgage folks don’t die, they just start new companies

March 25th, 2008 · 1 Comment


Yesterday Thornburg Mortgage announced, in a filing with the SEC, it will allow an investor to acquire up to $300 million worth of stock in the company’s offering of $1 billion of convertible debt. The purchaser would have to provide assurances that the ownership would not jeopardize the company’s REIT qualification. The news is a sign that the company is likely able to raise the rest of the necessary cash and Thornburg Mortgage appears to have staved off bankruptcy in satisfying its creditors by raising almost a third of the cash it needed to preserve its standing. Given Thornburg’s focus on full doc loans, and away from stated deals, many feel that they “deserve” to continue buying loans.

Former Countrywide COO Sandy Kurland has created a mortgage company that will focus on buying loans from financial companies trying to reduce their mortgage exposure. Nine other former Countrywide officials (Kurland, the managing director of production technologies, the president of Countrywide Bank, the managing director and chief of staff for the executive office of the president, the CFO & treasurer of Countrywide Bank, the chief of emerging technology & innovation, chief strategy & governance officer of Countrywide Bank, and the chief lending officer of Countrywide Bank) joined him at “Private National Mortgage Acceptance Co.” PennyMac said its focus is on “investing and servicing residential mortgage assets on behalf of private investors”, and is sponsored by BlackRock, Inc and Highfields Capital Management

Let’s see. The Federal Government has enacted laws, the Federal Reserve has lowered rates and added capital, and OFHEO has loosened up Fannie & Freddie’s requirements. Now all we need is some price appreciation and some less-stringent underwriting criteria, right? And maybe some investor interest in mortgage-backed securities. Yesterday the FHLB’s regulator said that the FHLB (Federal Home Loan Bank) could increase their purchase of MBS by about $150 billion. Last week’s move by OFHEO appears to be the most substantial move (given the lack of enthusiasm about the new loan limits) to get the mortgag