Months Later, Thornburg Servicing Portfolio to Sell

In Charles Dickens’ A Christmas Carol, the shrewd and penny-pinching money lender, Ebeneezer Scrooge, faces the reality of his life’s legacy as he watches his possessions sold off after his death. Similarly, now-bankrupt Thornburg Mortgage left behind significantly more valuable assets months after the credit crisis took its toll on the ultra-prime jumbo mortgage lender. One of these assets — a $11.1bn of residential loan servicing rights portfolio — is going up for sale by Interactive Mortgage Advisers (IMA) as part of the sale of assets under Thornburg’s bankruptcy. The portfolio is made perhaps more valuable because of the high underwriting standards used by the ultra-prime jumbo lender. “Without question, this is one of the more attractive offerings available to the market for some time,” said Tom Piercy, managing member of IMA. “Thornburg maintained quality underwriting standards throughout their history as evidenced by the performance of this portfolio and its corresponding vintage. In an industry sector overwhelmed by Agency repurchase demands, the risk of servicing this asset is far less than any other portfolio offered.” The portfolio consists of nearly 17,000 loans with an unpaid principal balance of $11.1bn, which bear a weighted average note rate of 5.87% with a seasoning of 43 months and weighted average service fee of 24.03bps. The loans in the portfolio is 3.79% delinquent while another 2.87% of loans are in foreclosure and/or bankruptcy. Bid procedures on the portfolio’s sale will be released Dec. 21, IMA said. The sale is procedural, but a grim reminder of Thornburg’s long year of troubles. Thornburg filed for bankruptcy protection in May. The company had warned in April of the possible bankruptcy after finding itself in violation of numerous covenants on various credit facilities with the likes of UBS AG (UBS) and JP Morgan Chase (JPM). Thornburg said at the time that its creditors had agreed to forbear demanding payment under deficiency claims, but said that its various creditors would begin to seize collateral ahead of any bankruptcy filing by the company. Thornburg said it would begin the transfer mortgage servicing rights back to respective creditors. Write to Diana Golobay.