Thornburg Mortgage of Santa Fe, N.M., filed for bankruptcy protection late last week, listing debts of more than $1 billion.

The filing had been anticipated. The company's fate is now in the hands of its bondholders who are expected to liquidate its assets which include on-balance sheet jumbo mortgages and bonds of at least $17 billion.

Its lenders include Credit Suisse, JPMorgan Chase, Greenwich Capital, and Royal Bank of Scotland. Up until last year Thornburg was a publicly traded REIT.

Its shares now trade on the "pink sheets" for about one penny. It stopped funding loans last year but continued to service jumbo and super jumbo assets held on its balance sheet.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.