whooops..In an exclusive interview on "Kudlow & Company," Larry Goldstone said that "Chapter 11 does not solve our problems. In fact, it would only make them worse. We have no intention of filing Chapter 11."
"We've been able to meet all of our obligations," Goldstone said. "We've been rolling over and financing our portfolio. It's been an amazing struggle to get that done."
Thornburg shares Thornburg Mortgage IncTMA
7.61 -6.67 -46.71%
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[TMA 7.61 -6.67 (-46.71%) ] plunged 46% Tuesday after several brokerages and Moody's Investors Service downgraded the residential mortgage lender amid concerns about liquidity. The shares have lost more than three-fifths of their value this month. Thornburg bonds also fell.
Shares were halted just before the market closed, after which Thornburg said it would delay its second-quarter dividend, was was due to be paid Wednesday, for a month.
Like many rivals, Thornburg has struggled because investors, wary of rising defaults, have refused to buy many kinds of loans. Among them are loans considered high quality, including Thornburg's specialty, prime "jumbo" loans--those above $417,000.
Many bankers are also refusing to extend credit to mortgage lenders. Nonetheless, Moody's said Thornburg has "superior asset quality."
Earlier Tuesday, Thornburg said that because of "unprecedented and irrational sentiment" in the secondary market, it will not accept new requests to lock in rates for four days.
"Financing in the jumbo mortgage space is difficult," Thornburg said in the CNBC interview. "But we are navigating our way through this process."
He added: "There are so many rumors flying around the Street, particularly about Thornburg Mortgage. But 80 percent of what you're hearing just isn't true."
Asked if the Federal Reserve could accept collateral other than Treasurys or other government-backed debt, Goldstone was doubtful:
"We've actually explored this over the last several days. We've spoken to our representatives here in New Mexico. We've had communications into the Fed, the Treasury department, the president trying to communicate what we think is ia very severe issue for the housing market and it's not about Wall Street," he said.
"It's about Main Street, because Main Street is being negatively affected by mortgage interest rates for jumbo mortgages today and its all because of this dislocation that's going on in the credit markets. Apparently, the Fed cannot change their collateral requirements like the Eurpean Central Bank...But I do believe the Fed could do some jawboning. I think they could get involved in a dialogue basis with the major banks and major Wall Street dealers and begin to provide some liquidity into the system."
Paul Miller, a Friedman Billings, Ramsey analyst, downgraded Thornburg stock to "underperform" from "market perform," citing "the current liquidity crisis in the asset-backed commercial paper and repurchase markets, coupled with the freezing up of the secondary market for jumbo loans."
http://www.cnbc.com/id/20264649
