THE BASIS POINT

Thornburg Hangs Up Margin Calls, Back To Business

Thornburg Mortgage, a key player in A-paper jumbo lending, has secured new lines of credit from Bear Stearns, Citigroup, Credit Suisse, Greenwich Capital, Royal Bank of Scotland, and UBS in order to continue buying loans from mortgage bankers and funding wholesale loans. These banks have also agreed to freeze any margin calls on Thornburg until March 2009.

This is a return to common sense for credit markets in that Thornburg has a sterling reputation for originating jumbo paper with high credit score borrowers with strong assets and income. It’s the kind of paper that the credit markets need to rebuild, and it seems Thornburg’s funding sources are setting their panic aside, at least for now, and recognizing that. They are expected to begin purchasing loans from mortgage banks as soon as this week.