Writedown Thumps Thornburg

Thornburg specializes in originating jumbo mortgages -- loans above $417,000, which cannot be sold to Fannie Mae or Freddie Mac. Thornburg and rivals such as Countrywide Financial (CFC) were hit hard this past summer when the market for mortgage-backed securities seized up.

Besides the loan sales of its highest quality assets, Thornburg also raised cash this summer by selling $575 million in preferred stock and borrowing funds against $1.44 billion of mortgage assets in order to finance its lending business.

Thornburg also said that its current reserves for loan losses "will be adequate to cover expected and potential future credit losses on its loan portfolio." The company said it has not experienced "any material deterioration" in the credit performance of its loan portfolio since the end of July.

So-called seriously delinquent loans represented 0.27% of the loan portfolio at the end of the third quarter.

Shares fell $1.16 to $12.30.

>To order reprints of this article, click here: Reprints