Yesterday’s New York Times had an interesting but somewhat problematic story about Goldman Sachs’ habit of betting against its own clients—a strategy the firm calls “embracing conflicts.” As in, conflicts of interest.

Guess which Santa Fe company was among the many that got screwed by Goldman?

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This week’s Indicators on the $1,052,157,000 in Thornburg Mortgage securities held by the Federal Reserve Bank of New York spun off of this April 1 story by Bloomberg News. The Fed acquired the Thornburg securities in 2008, during the first of the big bank bailouts. That was the Fed-managed sale of Bear Stearns, the investment bank where Garrett Thornburg got his start, and which he continued to do business with.

While Thornburg—one of Santa Fe’s largest employers—didn’t directly get a bailout, the US government still got stuck with its junk.

Nailing down the details of these transactions isn’t simple; many of the deals leading up to and following the 2008 financial crisis were constructed as confusingly as possible, in part to deter scrutiny by outsiders. For a brief how-to in financial sleuthing, this post shows how to re-report the Indicators item on Thornburg and the Fed.

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According to today’s Wall Street Journal (subscription required), Thornburg Mortgage’s $11 billion loan portfolio has found a buyer:

Select Portfolio Servicing Inc., a Salt Lake City mortgage-servicing business owned by Credit Suisse Group (CS), won the auction for Thornburg’s portfolio with a winning bid of about $95 million, according to Joel Sher, the failed lender’s Chapter 11 trustee.

If this summary of the Better Business Bureau file on Select is accurate, the sale could be bad news for homeowners who took out loans with Thornburg, which before its bankruptcy last year had a pretty good reputation for customer service:

“Based on BBB files, this company has unsatisfactory record with the BBB due to unanswered and unresolved complaints.

“The BBB processed a total of 136 complaints about this company in the last 36 months, our standard reporting period. Of the total of 136 complaints closed in 36 months, 59 were closed in the last year.”

The news agency today follows up on the sell-off of Thornburg Mortgage’s $11 billion-plus in servicing rights, which SFR mentioned in its year-end wrapup:

NEW YORK, Jan 4 (Reuters) – Bankrupt U.S. mortgage lender Thornburg Mortgage Inc (THMRQ.PK) is seeing “wide interest” in the auction for its $11 billion mortgage servicing portfolio…

Dozens of traditional mortgage banks, banks, hedge funds, private equity firms, and special servicers have expressed interest in the portfolio.

Of that group, more than 20 are likely to meet qualifications to bid on the portfolio this week…

Interesting tidbits keep turning up in the Thornburg Mortgage bankruptcy case, one of the largest in US history.

Court documents show that in October, the company, now known as TMST, had $24 million in the bank (or rather, banks—foremost among them being New Mexico Bank & Trust). That month alone, TMST made a gross profit of $2.2 million from servicing mortgages—and has made $19.9 million since filing for bankruptcy in May. After legal fees and “general and administrative” costs, TMST has netted $816,773 since the bankruptcy. Of course, all that belongs to its creditors.

The case is also shedding light on what kind of tax burden one of Santa Fe’s largest private employers faces, or rather, doesn’t.

Since filing for bankruptcy, the company has paid a $107,850 in combined state and federal taxes—or 13 percent of its net profit in that time. For comparison’s sake, check out the federal income tax brackets. A married couple making the median income in Santa Fe is going to pay 15 percent. Such a couple is likely to pay property taxes, as well—unlike TMST, which pays no property taxes on its corporate HQ, thanks to a clever deal with the city of Santa Fe.

Click on the image below for a breakdown of TMST’s tax payments.

Note that TMST, which laid off 130 workers in April and more since, has paid all of $973 in unemployment taxes in the months since its bankruptcy. Two years ago, Gov. Bill Richardson—who has received many thousands in campaign contributions from company founder Garrett Thornburg over the years—signed into law a bill that cut employer unemployment tax payments to the lowest rate allowed by federal law, saving corporations an estimated $26 million in 2008.

More on Thornburg after the cut.

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