The obvious debacle over Freddie Mac and Fannie Mae have indeed lead the media in the recent credit crisis craze. The anticipation of government bailouts of the two dwindling lenders has driven Wall Street to drive the stock's down to ridiculous lows. The lows currently are still much better than the anticipated value of Fannie and Freddie post government bail out: Zero Equity.
What seems to have been forgotten or rather deferred away from the media's attention is Thornburg Mortgage. Not only did the company's stock plummet to all time lows from $.75 to $.21 in a matter of days, but it did so weeks before Fannie and Freddie. Thornburg taking a massive dive to the low of $.17 closed Tuesday up $.09 to a market price of $.49. There has been very little media commentary regarding this mortgage lender and yet such a profound recovery has occurred and looks to continue it's crawl back to a respectable price.
Tuesdays recovery can be attributed to a better-than-expected earnings report due to sale off assets and new accounting procedures. In focus, Thornburg reported $412.3 million, or 84 cents per share, compared to the $78.1 million, or 66 cents per share in the previous year.
My bottom line is, and although Thornburg isn't even in the same weight class as Freddie and Fannie, perhaps the Thornburg story is a good model for the two lenders to follow and not allow the Fed to bail them out, and let the market refinance them. At least that way, it gives the investors a better chance to retain their investments rather than wipe them out without a chance. We shall see.
Keep an eye out for Thornburg (NYSE:TMA)
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