SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* MATLIN DAVID J (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol THORNBURG MORTGAGE INC [ TMA ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director X 10% Owner Officer (give title below) Other (specify below)
	3. Date of Earliest Transaction (Month/Day/Year) 12/29/2008
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock, par value $0.01 per share	12/29/2008		J(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)		200,479(1)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)	A	(6)(7)(8)(9)(10)(11)(12)(13)	120,762,291(1)(9)(10)(11)(12)(13)(14)(15)(16)	I	See footnotes(9)(10)(11)(12)(13)(14)(15)(16)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* MATLIN DAVID J (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* PATTERSON MARK R (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MatlinPatterson Global Partners III LLC (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MATLINPATTERSON GLOBAL ADVISERS LLC (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MATLINPATTERSON ASSET MANAGEMENT LLC (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MATLINPATTERSON LLC (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MatlinPatterson Global Opportunities Partners III LP (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* MP TMA L.P. (Last) (First) (Middle) 520 MADISON AVENUE, 35TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. All share figures contained in this Form 4 have been adjusted to reflect Thornburg Mortgage, Inc.'s (the "Issuer") one-for-ten reverse split of its common stock, par value $0.01 per share (the "Common Stock"), that was effected on September 26, 2008.

2. On March 31, 2008, the Issuer raised an aggregate of $1.15 billion from the sale of Senior Subordinated Secured Notes due 2015 ("Senior Subordinated Notes"), detachable Class B warrants exercisable for 16,860,705 shares of Common Stock ("Initial Warrants") and interests in the Principal Participation Agreement, dated March 31, 2008 ("Principal Participation Agreement"), in a private placement to qualified institutional buyers under Section 4(2) of the Securities Act of 1933, as amended, with MP TMA L.P. and MP TMA (Cayman) L.P. and their affiliates (collectively, "MatlinPatterson") as the lead investor. In addition, $200 million was originally placed in escrow by investors, of which approximately $11.4 million was withdrawn on June 30, 2008 (the "Escrowed Funds") and the Issuer placed detachable Class B Warrants exercisable into 2,932,336 shares of Common Stock (the "Escrowed Warrants") (cont'd)

3. (cont'd) (prior to giving effect to any anti-dilution adjustments pursuant to the Warrant Agreement dated as of March 31, 2008, among the Issuer and the warrantholders party thereto (the "Warrant Agreement")) (cont'd)

4. (cont'd) in escrow with the Wilmington Trust Company on behalf of such purchasers. Pursuant to the Purchase Agreement (as defined below), for an aggregate purchase price of $475 million, (i) MP TMA L.P. and MP TMA (Cayman) L.P. acquired 5,365,882 and 1,598,303, respectively, of the 16,860,705 Initial Warrants (which have been fully exercised into shares of Common Stock), (ii) TMA Ltd., MP TMA L.P. and MP TMA (Cayman) L.P. acquired rights to receive certain additional warrants, including the Escrowed Warrants and the Additional Warrants (as defined below), as provided in the Purchase Agreement, (iii) TMA Ltd. received interests in the Principal Participation Agreement, and (iv) MP TMA L.P. and MP TMA (Cayman) L.P. acquired $475 million aggregate principal amount of Senior Subordinated Notes.

5. On October 1, 2008, due to failure to satisfy certain conditions in the Purchase Agreement, dated March 31, 2008 ("Purchase Agreement") on or prior to September 30, 2008, the remaining $188.6 million of Escrowed Funds was released to the escrow subscribers and, in connection with the release of the Escrowed Funds, the holders of the Senior Subordinated Notes became entitled to receive the Escrowed Warrants. MP TMA L.P. and MP TMA (Cayman) L.P. received 1,024,161 and 305,061 shares of Common Stock, respectively, upon the exercise of their Escrowed Warrants on November 19, 2008. The Escrowed Warrants were exercised at $0.01 per share of Common Stock received for an aggregate purchase price of $10,241.61 paid by MP TMA L.P. and $3,050.61 paid by MP TMA (Cayman) L.P. for the underlying shares of Common Stock.

6. On November 26, 2008, pursuant to the Purchase Agreement, the Issuer issued 276,519,943 detachable Class B Warrants exercisable for 276,519,943 (prior to giving effect to any anti-dilution adjustments pursuant to the Warrant Agreement) shares of Common Stock (the "Additional Warrants") to certain participants, with TMA Ltd. receiving 114,249,521 of such Additional Warrants. On December 18, 2008, pursuant to the Override Agreement dated March 17, 2008 between the Issuer and the other parties thereto (as amended, the "Override Agreement"), the Issuer issued warrants exercisable for 14,176,464 shares of Common Stock (the "Override Warrants") to the Counterparties (as defined in the Override Agreement, which definition does not include MatlinPatterson), resulting in an anti-dilution increase of 6,470,645 in the aggregate number of (cont'd)

7. (cont'd) Additional Warrants outstanding. This anti-dilution adjustment was made on a pro-rata basis to all holders of Additional Warrants. Taking into consideration the issuance of such anti-dilution Additional Warrants and the exercises of some of the Additional Warrants following November 24, 2008, a total of 153,277,110 Additional Warrants were outstanding following such anti-dilution adjustments. On December 23, 2008, TMA Ltd. exercised on a cashless basis the Additional Warrants it held, which were exercisable for 119,285,180 shares of Common Stock with a market value of $0.17 per share at an exercise price of $0.01 per share. Pursuant to such cashless exercise, TMA Ltd. received a net number of 112,268,405 shares of Common Stock. After such cashless exercise, TMA Ltd. held a total of 112,268,405 shares of Common Stock. Each of the Purchase Agreement, the Warrant Agreement and the Escrow Agreement was filed as an exhibit to the Issuer's Current Report on (cont'd)

8. (cont'd) Form 8-K/A dated April 4, 2008, and the amendments to each of the Purchase Agreement, the Warrant Agreement and the Escrow Agreement was filed as an exhibit to the Issuer's Current Report on Form 8-K on July 3, 2008. Each of these agreements is hereby incorporated herein by reference.

9. On December 24, 2008, TMA Ltd. distributed all of its assets to its shareholders: TMA (Cayman) L.P. and MatlinPatterson Global Opportunities Partners (Cayman) III L.P. As a result, TMA (Cayman) L.P. became the direct owner of an additional 86,504,469 shares of Common Stock and MatlinPatterson Global Opportunities Partners (Cayman) III L.P. became the direct owner of an additional 25,765,936 shares of Common Stock (collectively, the "Additional Warrant Shares"). Subsequently, on December 24, 2008, (i) TMA Ltd. was dissolved, (ii) MatlinPatterson Global Opportunities Partners (Cayman) III L.P. contributed all of its Additional Warrant Shares to MP TMA (Cayman) L.P. in return for additional equity interests therein, (iii) TMA (Cayman) L.P. distributed all of its interest in the Additional Warrant Shares to TMA (Cayman) L.P.'s limited (cont'd)

10. (cont'd) Opportunities Partners III L.P. in return for additional equity interests therein, (v) TMA (Cayman) L.P. was dissolved and (vi) MatlinPatterson Global Opportunities Partners III L.P. contributed all of its Additional Warrant Shares to MP TMA L.P. in return for equity interests therein (collectively, the "Reorganization"). As a result of the Reorganization, TMA Ltd. and TMA (Cayman) L.P. ceased to be 10% owners of the Common Stock. However, the reporting persons for whom this Form 4 is being filed remained subject to the reporting requirements under Section 16 of the Securities Exchange Act of 1934 ("Section 16").

11. On December 29, 2008, the Issuer recalculated the cashless exercise price applicable to the Additional Warrants previously held by TMA Ltd. based on a market value of $0.175 per share rather than the $0.17 per share market value which was incorrectly used to calculate the cashless exercise price on December 23, 2008--the date on which TMA Ltd. exercised on a cashless basis the Additional Warrants it held. As a result of such recalculation, MP TMA L.P. and MP TMA (Cayman) L.P. were issued an additional 154,469 and 46,010 shares of Common Stock, respectively. As of the date hereof, MP TMA L.P. was the direct owner of 93,046,981 shares of Common Stock and MP TMA (Cayman) L.P. was the direct owner of 27,715,310 shares of Common Stock. MatlinPatterson Global Opportunities Partners III L.P. holds 100 percent of the ownership interests in (cont'd)

12. (cont'd) MP TMA L.P. MatlinPatterson Global Opportunities Partners (Cayman) III L.P. (together with MatlinPatterson Global Opportunities Partners III L.P., the "Funds") holds 100 percent of the ownership interests in MP TMA (Cayman) L.P. MatlinPatterson Global Partners III LLC is the general partner of each of the Funds, MP TMA L.P. and MP TMA (Cayman) L.P. and, as a result, has the power to vote or to direct the vote, and to dispose or to direct the disposition, of the shares of Common Stock beneficially owned by MP TMA L.P. and MP TMA (Cayman) L.P. MatlinPatterson Global Advisers LLC (the "Adviser") is the investment adviser to the Funds and, as a result, has the power to vote or to direct the vote, and to dispose or to direct the disposition, of the shares of Common Stock beneficially owned by (cont'd)

13. (cont'd) MP TMA L.P. and MP TMA (Cayman) L.P. MatlinPatterson Asset Management LLC holds 100 percent of the voting interest in and equity of the Adviser and holds 100 percent of the voting interest in MatlinPatterson Global Partners III LLC. MatlinPatterson LLC holds 100 percent of the equity of MatlinPatterson Asset Management LLC.

14. Other than MP TMA L.P. to the extent it is the direct holder of Common Stock, each of the reporting persons disclaims beneficial ownership of the shares held by MP TMA L.P. and MP TMA (Cayman) L.P., except to the extent such reporting person holds an indirect pecuniary interest therein, and the inclusion of these shares in this report shall not be deemed an admission of beneficial ownership of all of the reported shares for purposes of Section 16 or for any other purpose.

15. David J. Matlin and Mark R. Patterson serve as members of the board of directors of the Issuer pursuant to MatlinPatterson's rights to designate up to three directors to the board of directors of the Issuer if it meets certain ownership requirements. MatlinPatterson retains the right to designate a third director at any time during which it meets the relevant ownership requirement. David J. Matlin and Mark R. Patterson each is a holder of 50 percent of the membership interests in MatlinPatterson LLC. David J. Matlin and Mark R. Patterson may be deemed to have indirect pecuniary interests in the Common Stock held by MP TMA L.P. and MP TMA (Cayman) L.P.

16. Their exact pecuniary interests therein are not readily determinable because they are subject to several variables, including without limitation, the internal rates of return of the Funds overall and with respect to their indirect investment in the Issuer. David J. Matlin and Mark R. Patterson disclaim beneficial ownership of any of the reported securities except to the extent of their pecuniary interests therein.

	David J. Matlin /s/ Lawrence M. Teitelbaum, as attorney-in-fact for David J. Matlin	12/30/2008
	Mark R. Patterson /s/ Lawrence M. Teitelbaum, as attorney-in-fact for Mark R. Patterson	12/30/2008
	MatlinPatterson Global Partners III LLC, /s/ Lawrence M. Teitelbaum, Authorized Person	12/30/2008
	MatlinPatterson Global Advisers LLC, /s/ Lawrence M. Teitelbaum, as attorney-in-fact for David J. Matlin, Chief Executive Officer	12/30/2008
	MatlinPatterson Asset Management LLC By: MatlinPatterson LLC, its Manager, /s/ Lawrence M. Teitelbaum, as attorney-in-fact for David J. Matlin, Member	12/30/2008
	MatlinPatterson LLC, /s/ Lawrence M. Teitelbaum, as attorney-in-fact for David J. Matlin, Member	12/30/2008
	MatlinPatterson Global Opportunities Partners III L.P., By: MatlinPatterson Global Advisers LLC, its Investment Adviser, /s/ Lawrence M. Teitelbaum, Authorized Person	12/30/2008
	MP TMA L.P., By: MatlinPatterson Global Partners III LLC, its General Partner, /s/ Lawrence M. Teitelbaum, Authorized Person	12/30/2008
	** Signature of Reporting Person	Date
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