Thornburg Mortgage Inc Reports $3.3B Loss In 1Q

Santa Fe, NM (AHN) - Thornburg Mortgage Inc., a lender of residential mortgage, on Thursday reported a net loss in the first quarter this year compared with a profit last year led by unrealized market-value losses and financing-related charges.

The company swung a quarterly loss before preferred stock dividends of $3.31 billion or $20.64 per share, compared to net income of $75 million or $0.62 per share reported a year earlier.

The latest three-month results include unrealized market value losses of $1.542 billion at the company's mortgage-backed securities and securitized loan portfolios.

While, the firm recorded $949.1 million in charges related to a March 31 financing deal that helped the firm avert bankruptcy.

The company's net interest income was reported to $42 million in the quarter, a decrease of 54 percent from $90.7 million last year.

"During the first quarter, we were significantly and negatively impacted by conditions impacting the entire mortgage market, including, among others, declining home prices and substantial declines in mortgage securities and mortgage loan prices," Thornburg Mortgage CEO and president Larry Goldstone said in a statement.

He added that the unprecedented market conditions led to an inability to meet resulting margin calls, a need to sell assets and other financing problems.

Overall the subprime mortgage crisis has forced the major banks and brokerages in the U.S. to post close to $400 billion in losses and writedowns, since last summer.

"The industry is suffering from a continued decline in housing prices, a mortgage securities market that cannot easily value mortgage-backed securities due to lack of trading activity, a banking sector that is lacking capital and deleveraging, and continued rating agency downgrades of mortgage-backed securities," Goldstone said.

So far the financial services companies have managed to raise as much as $285 billion to cover the losses, according to the reports.

The firm that specializes in lending big mortgages to individuals with good credit has managed to raise $1.35 billion through selling bonds, warrants to purchase its common shares and interests in certain mortgage assets.