Thornburg Hit by $300 Million in Margin Calls

In a 10-K filing with the Securities and Exchange Commission filed on Thursday, ultra-prime mortgage lender Thornburg Mortgage Inc. said that it has been hit with margin calls on roughly $2.9 billion of Alt-A mortgage-backed securities held in its portfolio. The hit came as the company faced what it called a “sudden adverse change in mortgage market conditions” beginning on February 14. The lender said it had met about $300 million of the margin calls since that time, leaving the company with “reduced readily available liquidity” for any future margin calls it faces. Cue up the next round of the mortgage industry liquidity crisis, it seems. Thornburg, for its part, seems unsure about what lies ahead. “Given the current uncertainty regarding these market conditions, we are unable to offer any additional factual information on the situation and how it will impact us other than to disclose what we are currently seeing in the mortgage market,” the company said it its regulatory filing. Earlier this month, the Santa Fe, New Mexico-based lender said it returned to profitability during the fourth quarter of 2007, posting earnings of $64.8 million. The company had lost $1.1 billion during the quarter as it dealt with the crippling effects of the first wave of the mortgage credit crunch. Disclosure: The author held no positions in Thornburg when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.