Thornburg Mortgage, a lender which specialized exclusively in high credit quality Jumbo (loans greater than $417K) loans has announced it will file bankruptcy and liquidate. Bloomberg reports:
“Our dissolution was created by one issue – the inability to support the equity requirements for financing our mortgage securities portfolio, given the continued decline in mortgage- backed securities prices,” she said.
In english, the comment above, from a Thornburg Spokeswoman, means essentially that they could not find any buyers for mortgage bonds based on Jumbo mortgages, which unlike conforming loans, have no government backing of any kind.
Thornberg has been walking dead for at least a year – a bigger surprise would have been their survival – but it is interesting to note that Thornburg was one of the more “sane” lenders in this space, and their product was highly regarded. That was then, this is now.