Mortgage lender Thornburg Mortgage Inc said on Monday it sold $20.5 billion of assets and reduced its borrowings to cut its risk amid a difficult market for home loans.
The real estate investment trust said the actions will stabilize the company's ability to meet its financing obligations and continue its mortgage lending operations.
But the risk reduction will also result in a realized capital loss of about $930 million, Thornburg said.
Thornburg said its book value is about $12.40 per share as of August 17, compared with a book value of about $14.28 per share as of August 13.
The company sold most of its lowest-yielding assets, including unprofitable loans, and expects to remain profitable on an operating basis in the third quarter.
The company said it believes yields on mortgages it makes are now at least 1.25 percent more than its cost of funding, which should improve its lending margins.