“Thornburg Mortgage Inc., the jumbo home-loan specialist, sold bonds backed by $1.44 billion of mortgages to pay down credit lines and free up financing to accelerate new lending.
The transaction was collateralized by “prime” loans, or those to borrowers with high credit scores, Santa Fe, New Mexico- based Thornburg said today in a statement. The loans carried adjustable interest rates.
Thornburg, which stopped taking new loan applications last month after having its access to short-term credit markets curtailed, resumed lending last week and now is trying to increase the pace. The company had to liquidate $20.5 billion of mortgage-backed securities to pay off short-term debt and issue $500 million of convertible preferred stock to bolster cash reserves.
“There is apparently some liquidity in the market” after investors’ bids for new mortgage-backed securities all but dried up in mid-August, Thornburg President Larry Goldstone said in an interview.
Founded in 1993 by Chief Executive Officer Garrett Thornburg, the company has survived as a mortgage-industry credit crunch forced more than 100 lenders to close operations, file for bankruptcy or put themselves up for sale since the beginning of last year.”
∙ Thornburg Completes $1.4 Billion Financing of Loans [Bloomberg]
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