Financing Those 'Fabulous' Hollywood Homes

SANTA FE, N.M., Feb. 23 /PRNewswire-FirstCall/ -- From Tara in Gone With the Wind to Xanadu in Citizen Kane to Mr. Nebbercracker's home in Monster House, Hollywood's Academy Award nominated movies have shown film fans what Dorothy Gale learned after going over the rainbow -- there's no place like home.

In advance of this year's 79th annual Academy Awards, Thornburg Mortgage, Inc. and its team of innovative underwriters have explored the types of loan products that would be needed to finance some of cinema's most famous properties, all of which were featured in movies that have either been nominated for or received an Academy Award. What follows are a list of the properties and films as well as the scenarios that Thornburg Mortgage considered when deciding what mortgage loans and products would best fit some of the most famous homes in film history. Included were:

1) Tara from Gone With the Wind (Best Picture winner, 1939). Recommended mortgage product: Cash-out refinance. 2) Uncle Henry and Auntie Em Gale's farmhouse from The Wizard of Oz (Best Picture nominee, 1939). Recommended mortgage product: hybrid option ARM (adjustable-rate mortgage). 3) Manderley from Rebecca (Best Picture winner, 1940). Recommended mortgage product: Several, including hybrid ARMs, interest-only loans and pledged-asset loans 4) Xanadu from Citizen Kane (Best Picture nominee, 1941). Recommended mortgage product: pledged-asset loan 5) The old Granville house from It's A Wonderful Life (Best Picture nominee, 1946). Recommended mortgage product: FHA 203K loan 6) The Bates home from Psycho (Best Director nominee, 1960). Recommended mortgage product: interest-only loan with no prepayment penalty 7) The McCallister house from Home Alone (Best Score nominee, 1990). Recommended mortgage product: traditional or hybrid ARM 8) Stately Wayne Manor from Batman Begins (Best Cinematography nominee, 2005). Recommended mortgage product: cash-out refinance 9) The Fortress of Solitude from Superman Returns (Best Visual Effects nominee, 2006). Recommended mortgage product: home equity line of credit or cash-out refinance 10) Mr. Nebbercracker's home from Monster House (Best Animated Feature nominee, 2006). Recommended mortgage product: subprime loan

"As a residential mortgage lender that's primarily focused on originating jumbo and super-jumbo loans, Thornburg Mortgage understands the home financing needs of Hollywood's biggest actors and actresses as well as other affluent borrowers," says Jim Collinson, senior vice president of underwriting and credit risk manager. "At Thornburg Mortgage, we have years of experience handcrafting home loans for exceptional properties -- from condotels to beachfront villas. This year, just as in years past, Hollywood has shown us some unique properties, and Thornburg Mortgage thought it might be interesting to see what mortgage products would be available for some of the most memorable movie homes.

"In compiling our mortgage loan recommendations for "Oscar-nominated" homes," Collinson continues, "we found that most of the characters as different as Rhett Butler, Norman Bates, and Clark Kent could benefit from today's innovative mortgage products."

Below are a few scenarios explaining the rationale for each recommended mortgage product for these famed movie homes. All of the scenarios are available on-line ( http://www.thornburgmortgage.com/ ) at the Thornburg Mortgage Media Room or by contacting Suzanne O'Leary Lopez at (505) 946-9602 or Drew Ferguson at (312) 895-4704.

Financing Those "Fabulous" Hollywood Homes Thornburg Mortgage Underwriters Recommend Home Loans for 10 Properties Featured in Past and Present Academy Award Nominated Flicks Tara from Gone With the Wind

The Scenario: The "war of Northern Aggression" has left Scarlett O'Hara's beloved Tara in ruins. Although Scarlett's third husband, Rhett Butler, has a substantial income, it's from less than reputable sources -- speculating and blockade running. Scarlett's credit is questionable at best -- she's already had difficulties paying the taxes on the plantation and previously married Frank Kennedy to save it.

If Rhett wanted a home loan to help Scarlett rebuild Tara, would he find that, frankly, mortgage lenders didn't give a damn?

Not necessarily, says Jim Collinson, Thornburg Mortgage's senior vice president of underwriting.

The Solution: "Since Tara fared a lot better than Ashley Wilkes' Twelve Oaks, Rhett and Scarlett should be able to find a lender that would offer a cash-out refinance to help rebuild Tara. Of course, with Rhett's 'interesting' income sources, it might be best for him to look for a stated income loan." Collinson explains that Thornburg Mortgage could offer Rhett and Scarlett a cash-out refinance with an escrow holdback of 1 1/2 times the contractor estimate for the repairs to Tara. The work would need to be completed ideally within 45 days but no longer than 90 days from closing. As for Rhett's stated income loan, he would need to show 12 months of the stated income in liquid assets after closing costs are paid and excluding any of the cash out from the refinance.

The farmhouse from The Wizard of Oz

The Scenario: After troubles with their neighbor Miss Gulch and an odd tornado-related injury sent their young niece Dorothy "over the rainbow," Kansas farmers Henry and Emily Gale are considering retiring to a more weather- and pet-friendly community.

Since the Gales are on a fixed income and may have to help Dorothy with medical and psychiatric expenses stemming from her time with the twister, Collinson indicates that a hybrid option ARM (adjustable-rate mortgage) product might make for an ideal home loan for the Gales.

The Solution: "While hybrid option ARMs aren't for every borrower," notes Collinson, "it's clear that Uncle Henry and Auntie Em are sensible, hard- working people who could benefit from a hybrid option ARM product where, depending on their cash flow every month, they can pay the fully amortizing payment or choose a lower fixed payment based on a temporarily low interest rate.

"During months where Dorothy wasn't seeing wizards, witches, flying monkeys, dancing scarecrows and the like, Thornburg Mortgage would recommend that Henry and Em make the fully amortizing payment. But if Dorothy's hallucinations were to return and Dorothy needed more couch time with a therapist, the Gales might opt to use the low fixed payment."

Collinson also notes that Dorothy's aunt and uncle would need to qualify for a home based on the fully amortized payment which may limit the home price they could purchase.

Xanadu from Citizen Kane

The Scenario: To please his second wife, Susan Alexander, newspaper magnate and mine owner Charles Foster Kane plans to build Xanadu, which is being called by others, "the costliest monument a man has built to himself" since the Pyramids. The mountain on which it will stand boasts 100,000 trees and 20,000 tons of marble alone and it is said that property will includes "the largest private zoo since Noah."

Would Kane's deed to a Gold mine and his ownership of The New York Inquirer be enough collateral for a mortgage loan on an estate of this size? If Kane wanted to use someone else's money to build his stately pleasure dome, what kind of mortgage products might he use?

The Solution: "Mr. Kane will probably find that financing loans for unique properties can often be challenging for most lenders. One of the biggest challenges Charles is likely to face is establishing the value of the home, because of a lack of comparable sales for this type of property. While Thornburg Mortgage has the resources to underwrite a loan for Xanadu, we may limit our loan exposure depending on the outcome of the appraisal and the types of comparables found. Due to the loan size, we would require Mr. Kane to present full documentation on both income sources and liquid assets."

Collinson says that Thornburg Mortgage's pledged-asset loan program offer an additional means to finance Xanadu. Mr. Kane could obtain up to 100% of the appraised value of Xanadu as long as he has the liquid assets to offer as collateral. Pledged assets must be in the form of cash, stocks (publicly traded), bonds or mutual funds. In any case, Mr. Kane's loan would only be available post-construction, as Thornburg Mortgage does not offer construction financing.

Thornburg Mortgage is a leading single-family residential mortgage lender focused principally on the jumbo segment of the adjustable rate mortgage market. Backed by a balance sheet of $52.7 billion in high-quality assets, the company seeks to deliver attractive dividend income and steady growth for its shareholders by acquiring high-quality mortgage-backed securities and growing its share of the mortgage loan origination business. Capitalizing on its innovative portfolio lending model, REIT tax structure and leading-edge technology, Thornburg Mortgage is a highly efficient provider of specialized mortgage loan products for borrowers nationwide with excellent credit, and is positioned to become one of the top 50 mortgage lenders in the country. We invite you to visit the company's Web site at http://www.thornburgmortgage.com/ .

Thornburg Investment Management, a separate investment management company founded in 1982, advises a series of eight laddered-maturity bond mutual funds, four equity mutual funds and separately managed equity and fixed income portfolios for institutional and high net worth clients and sub-advisory services.

Both companies share three core attributes: high-quality operations, innovative strategies for achieving their goals, as well as a disciplined approach to managing and controlling risk.