Thornburg missing margin calls is the news of the day but the less-than-subtle after effects include the jamming up of the secondary market for jumbo-backed securities and concomitant spike in jumbo rates. The issue is that Thornburg may be forced to dump their assets on the market to meet further margin calls to raise cash. According to their SEC filing the default has triggered cross-default clauses across all of its other securitized loan agreements.
From Calculated Risk:
Thornburg Mortgage filed a form 8-K with the SEC today warning of a material event: (hat tip RW)
Thornburg Mortgage, Inc. (the ?Company?) has entered into reverse repurchase agreements, a form of collateralized short-term borrowing, with various counterparties.
The Company received a letter from JPMorgan Chase Bank, N.A. (?JPMorgan?), dated February 28, 2008, after failing to meet a margin call of approximately $28 million. The letter states that an Event of Default as defined under that certain Master Repurchase Agreement, dated as of August 3, 2006, as amended on February 7, 2007 by and between the Company and JPMorgan (the ?Agreement?) exists. The letter also notified the Company that JPMorgan will exercise its rights under the Agreement. The aggregate amount of proceeds lent to the Company under the Agreement was approximately $320 million.
From Market Watch on the Thornburg margin call miss:
Thornburg shares fell 39% to close at $2.08 after the company said in a filing with the Securities and Exchange Commission that it failed to meet a margin call of about $28 million, which in turn triggered a string of cross-defaults.
It also said that JP Morgan Chase Bank, which had extended the original margin call, has notified the company that it will exercise its right. The total amount lent to Thornburg is about $320 million, according to the filing.
The Jumbo market may get a breather as HUD has announced the new FHA loan limit increases for government insured loans across the country. Our friend Matt over at the OC Register’s Mortgage Insider blog has the details on the loan limit increases which will be announced tomorrow morning.
Here are the counties affected by the loan limit increase for FHA financing:
| County | Median Home Price | New FHA Limit |
| Alameda County | $995,000 | $729,750 |
| Alpine County | $438,000 | $547,500 |
| Amador County | $355,000 | $443,750 |
| Butte County | $320,000 | $400,000 |
| Calaveras County | $370,000 | $462,500 |
| Colusa County | $318,000 | $397,500 |
| Contra Costa County | $995,000 | $729,750 |
| Del Norte County | $249,000 | $311,250 |
| El Dorado County | $464,000 | $580,000 |
| Fresno County | $305,000 | $381,250 |
| Glenn County | $230,000 | $287,500 |
| Humboldt County | $315,000 | $393,750 |
| Imperial County | $260,000 | $325,000 |
| Inyo County | $350,000 | $437,500 |
| Kern County | $295,000 | $368,750 |
| Kings County | $260,000 | $325,000 |
| Lake County | $321,000 | $401,250 |
| Lassen County | $200,000 | $271,050 |
| Los Angeles County | $710,000 | $729,750 |
| Madera County | $340,000 | $425,000 |
| Marin County | $995,000 | $729,750 |
| Mariposa County | $330,000 | $412,500 |
| Mendocino County | $410,000 | $512,500 |
| Merced County | $378,000 | $472,500 |
| Modoc County | $125,000 | $271,050 |
| Mono County | $370,000 | $462,500 |
| Monterey County | $599,000 | $729,750 |
| Napa County | $615,000 | $729,750 |
| Nevada County | $450,000 | $562,500 |
| Orange County | $710,000 | $729,750 |
| Placer County | $464,000 | $580,000 |
| Plumas County | $328,000 | $410,000 |
| Riverside County | $400,000 | $500,000 |
| Sacramento County | $464,000 | $580,000 |
| San Benito County | $790,000 | $729,750 |
| San Bernardino County | $400,000 | $500,000 |
| San Diego County | $558,000 | $697,500 |
| San Francisco County | $995,000 | $729,750 |
| San Joaquin County | $391,000 | $488,750 |
| San Luis Obispo County | $550,000 | $687,500 |
| San Mateo County | $995,000 | $729,750 |
| Santa Barbara County | $615,000 | $729,750 |
| Santa Clara County | $790,000 | $729,750 |
| Santa Cruz County | $719,000 | $729,750 |
| Shasta County | $339,000 | $423,750 |
| Sierra County | $228,000 | $285,000 |
| Siskiyou County | $235,000 | $293,750 |
| Solano County | $446,000 | $557,500 |
| Sonoma County | $530,000 | $662,500 |
| Stanislaus County | $339,000 | $423,750 |
| Sutter County | $340,000 | $425,000 |
| Tehama County | $250,000 | $312,500 |
| Trinity County | $200,000 | 271050 |
| Tulare County | $260,000 | $325,000 |
| Tuolumne County | $350,000 | $437,500 |
| Ventura County | $599,000 | $729,750 |
| Yolo County | $464,000 | $580,000 |
| Yuba County | $340,000 | $425,000 |
If you had a jumbo loan that wasn’t locked you definitely want to connect with your loan officer to find out where you stand now – hint: it’s definitely not where you were a day ago.
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