Thornburg outlook gets rosier

One bright spot in Tuesday’s stock-market swoon was Thornburg Mortgage Associates (TMA), the jumbo mortgage lender that like a number of other housing-finance firms endured a brush with insolvency when the mortgage securities market collapsed this past summer. Unlike rival Countrywide (CFC) - which promised a return to profit but posted a big loss instead - Thornburg returned to profitability in its fourth quarter, after reporting a billion-dollar third-quarter loss following a fire sale of part of its mortgage portfolio. Thornburg made $65 million, or 34 cents a share, down from the year-ago $80 million, or 68 cents a share.

 The company also said it could be a beneficiary of the push to boost the size of loans eligible for purchase by government-sponsored investors Fannie Mae (FNM) and Freddie Mac (FRE). Measures being considered in Congress would raise the so-called conforming loan limit to $625,000 or more from the current $417,000 - a move that could allow Thornburg to sell loans that until recently have had no buyers.

“With the potential for expanded agency guidelines raising the conforming loan limit, the company would expect to benefit from this market change as a notable percentage of its pipeline and existing unsecuritized loan portfolio would qualify under the increased loan limit,” Thornburg said Tuesday. “The company would then be able to create agency securities as well as the private label securities in order to further diversify its portfolio financing strategies.” Thornburg’s experience over the past year shows why investment advisers are always advocating a more diversified portfolio.