Thornburg's $11 billion application portfolio up for sale

NEW YORK – The trustee for broke U.S. mortgage lender Thornburg Mortgage Inc (THMRQ.PK) acquired cloister approval on Friday to bargain the company's $11 billion mortgage application portfolio aboriginal abutting year.

Judge Duncan Keir of the U.S. Defalcation Cloister in Baltimore active a cloister adjustment on Friday, acceptance the auction to go advanced at an expedited pace.

Thornburg, already one of the arch providers of "jumbo" residential mortgages with some $24.4 billion of assets, became one of the better casualties of the subprime apartment crisis back it filed for defalcation in May.

Since then, the aggregation has connected to account a residential mortgage accommodation portfolio with a antithesis of about $11 billion, but has not originated, purchased or securitized any added residential mortgage loans, according to cloister papers.

The auction of Thornburg's once-prized application portfolio would represent a above anniversary in its defalcation process, which has been run by a trustee back October.

According to cloister papers, Thornburg's trustee will acquire bids for the application portfolio in January. Judge Keir has set a cloister audition to accept the auction to the accomplished applicant for February 10.

The trustee, Joel Sher, was appointed in October to booty over the defalcation of Thornburg, which now goes by the name of TMST Inc, afterwards it was apparent that above admiral were application agents and accessories to barrage a start-up venture.

In cloister papers, the trustee said a auction was all-important because the application portfolio was accountable to bazaar risk, and would about abatement in amount over time back the aggregation is clumsy to add new mortgages to the portfolio.

"The Trustee believes that a targeted auction action involving abeyant servicers of the Application Portfolio is best acceptable to accomplish the accomplished and best amount for the Application Portfolio," the trustee said in cloister affidavit beforehand this month.

The case is In re: TMST Inc, U.S. Defalcation Court, District of Maryland, No. 09-17787.

(Reporting by Emily Chasan; Editing by Phil Berlowitz)