Thornburg Mortgage Inc. has sold $20.4 billon or 35.5% of its portfolio of highly rated jumbo mortgage securities at a loss in an effort to ride out the market's liquidity squeeze and resume lending again.The publicly traded real estate investment trust will realize a $930 million loss as a result of the mortgage sales that involved assets with the lowest yields that were trading at negative spreads. It was "painful," Thornburg president and chief operating officer Larry Goldstone said during an interview on TV-CNBC. "But essentially, we just solved the repricing risk of our portfolio over the course of the last week." The sales helped the Santa Fe, NM, mortgage REIT raise cash and reduce its funding needs. Now it is planning to reopen its loan lock desk and resume normal lending operations over the next two weeks. "Going forward, we can be somewhat optimistic," Mr. Goldstone said.

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