Jumbo loan provider, Thornburg Mortgage Inc, may file for Chapter 11 bankruptcy. Thornburg mainly specializes in Jumbo loans to borrowers with good credit, at amounts of over $417,000. They first started experiencing difficulties in the summer of 2007, when their balance sheet began suffer serious blows due to the dropping values of their mortgages on file. This was soon followed by margin calls from their creditors. They lost capital when investors stopped buying their loans. If they do file for bankruptcy, they would be one of the biggest U.S. Mortgage providers to request help from creditors since the start of the housing crisis. Similar companies who have already done so are IndyMac Bancorp Inc and Washington Mutual Inc.

In a November mandatory filing, the company had reported losing $2.75 billion, or $85.71 per share, in the beginning nine months of 2..8. At the end of September, their balance sheet totaled $25.4 billion in adjustable-rate mortgage assets, and liabilities that held for example $20.4 billion in collateralized mortgage debt.

In order to maintain afloat and avoid bankruptcy, last March Thornburg had worked out a $1.35 billion bailout from MatlinPatterson Global Advisors LLC, a distressed debt investor, as well as from other investors. In related news, on March 12^th, two members of Thornburg's board of directors, that are also part of MatlinPatterson, David Matlin and Mark Patterson, stepped down reporting that their involvement in both organizations could result in conflict of interest.

Last Tuesday, Thornburg stated that they will be evaluating different strategies in order to restructure their financing, make deferred payments, and take care of their obligations with their bondholders. Many of their current lenders have agreed not to take legal action as of yet. Thornburg has also hired Kirkland & Ellis LLP, a law firm, and Houlihan Lokey Howard & Zukin Capital Inc., a restructuring firm, to help advise them in this troubled time.