Thornburg raises $1.44B to relaunch loans

Residential mortgage lender announces deal backed by ARMs; amount is enough to let firm repay what it owes and start issuing mortgages again.

SANTA FE, N.M. (AP) -- Thornburg Mortgage, a residential mortgage lender, said Tuesday it raised $1.44 billion in a deal backed by adjustable-rate mortgages, giving it enough money to start making loans again.

Thornburg (Charts), which specializes in adjustable-rate mortgages of more than $417,000, said the financing allows it to repay $1.37 billion in borrowings, clearing the way for new loan originations.

Mortgage lenders originate loans and then typically package them together for sale to bigger banks, who then slice them into securities. Demand on this so-called secondary market has waned, making it difficult for lenders to raise money to initiate mortgages.

Thornburg said the money it raised is backed by $1.44 billion in prime-rated ARM loans in the publicly registered Thornburg Mortgage Securities Trust.