Thornburg Mortgage reports $3.31 billion first-quarter loss

Thornburg Mortgage Inc who specialise in jumbo home loans, has reported a $3.31 billion first-quarter loss, which is why they almost went bankrupt in March. The mortgage company has also reported that it has a net loss before preferred stock dividends totalled $20.64 per share; this is a stark contrast from last year as the company reported a profit of $75 million which equates to 62 cents per share. Thornburg Mortgage Inc already knew in May that they would be reporting a substantial quarterly loss; the loss they expected was $3.32 per share.

Thornburg specializes in the larger mortgage, so if you are a buyer looking for a huge home and you have good credit, then Thornburg are the people to go to. However as the market is getting more tighter and investors are holding back on purchasing new homes, it was only a matter of time before Thornburg Mortgage Inc, would start to feel the pinch. Another reason why Thornburg is losing money is because they have had demand for more collateral from their own lenders.

Larry Goldstone, Chief Executive, had said that Thornburg would not have survived these recent struggles, had they not received a $1.35 billion capital infusion from their investors. Goldstone has said “It has been an extraordinarily difficult and arduous and complicated process to get to this point.” He also went on to say “the market for mortgage securities remains “dysfunctional.”

There are a number of poor results from Thornburg, these include a $1.54 billion write-down of the value of mortgage-backed securities and securitized loans. The company has also realized a $651.6 million loss on the sale of some adjustable-rate mortgages, as well as an unreleased figure of $126.1 million loss, which is on a separate adjustable-rate mortgage transaction. Goldstone has stated that the company are cooperating with a U.S. Securities and Exchange Commission probe into its restatement of 2007 financial results.

Source

free around the world in 80 days