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Non-Tech : Bill Wexler's Trading Cabana
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To: The Reaper who wrote (2597)8/14/2007 2:55:04 PM
From: RockyBalboa  Read Replies (1) of 6370
 
The next death sentence: Thornburg TMA

"Not locking in rates" == not doing business???

AP
FBR: Thornburg Not Locking Rates
Tuesday August 14, 2:46 pm ET
Thornburg Mortgage Halts Locking in Interest Rates for Four Days, Analyst Says

NEW YORK (AP) -- Shares of Thornburg Mortgage Inc., a real estate investment trust and originator of jumbo mortgages, plummeted Tuesday as an analyst said the company halted locking in any rates on potential mortgages for the next four days.

With the pressure of a series of downgrades from other analysts as well, Thornburg shares fell 37 percent to $8.99.

FBR analyst Paul Miller dropped his price target for Thornburg to $5 from $10, based on its inability to fund mortgages in the coming days, coupled with both Standard and Poor's and Moody's Investors Service downgrading the credit ratings for the company.

"This could mean that Thornburg Mortgage is not funding any current loans requests and could be the beginning of large liquidity issues for the company," Miller wrote in the note.

The company did not return calls for comment.

Thornburg Mortgage relies on capital markets to sell originated mortgages to get cash to fund new loans. Without a market for those loans, Thornburg Mortgage has no way to create liquidity.

Thornburg Mortgage could also be facing margin calls as the value of the loans it originates declines, thus putting a further crunch on the company's value and liquidity position, Miller wrote in the note.
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