Jumbo lender Thornburg Mortgage Inc. said Tuesday the company bounced back from a billion-dollar third-quarter loss to turn a profit in the final quarter of 2007, and plans to originate loans at a faster pace this year than it did during the housing boom.

Santa Fe, N.M.-based Thornburg said fourth-quarter net income totaled $64.8 million — a remarkable turnaround from a $1.09 billion third-quarter loss that was driven by the fire sale of $21.9 billion of securities backed by adjustable-rate mortgages (see Inman News story).

Originations fell to $516.7 million in the fourth quarter, down from $1.3 billion in the previous quarter and also in the fourth quarter of 2006. But Thornburg executives said the company is on track to originate $6.1 billion in loans this year, surpassing the past high mark of $5.6 billion in 2006.

Although the Mortgage Bankers Association projects that total mortgage originations will fall about 16 percent in 2008, Thornburg says it’s now well capitalized and in a position to seize a larger chunk of the jumbo and "super jumbo" loan market.

"We anticipate that our unique approach to loan originations — with our focus on providing jumbo and super-jumbo ARM loans to prime borrowers with superior credit directly and through our lending partners — will allow us to continue to grow and gain market share," Thornburg’s chief lending officer, Paul Decoff, said in a statement.

Decoff said Thornburg expects 33 percent of loan origination to take place through the wholesale channel, where the average loan size in 2007 was $1.2 million. Thornburg has 18 wholesale account executives working with 684 mortgage brokerage firms, Decoff said.

He said Thornburg also grew the number of corresponding lending partners it works with by 12 percent, to 306, while average correspondent loan size grew from $818,000 in 2006 to $984,000 last year.

Thornburg said its focus on making large loans to borrowers with good credit has limited losses in its portfolio. At the end of the year, loans that were delinquent by 60 days or more and real estate-owned properties totaled 0.44 percent of the company’s $24.6 billion portfolio. That’s up from 0.27 percent at the end of the third quarter, but well below the industry average of 4.23 percent.

At the end of the year, Thornburg had a $17.6 million allowance for loan losses, or just 0.07 percent of the total portfolio, which the company believes is appropriate given "the exemplary characteristics" of the portfolio.

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