Thornburg Mortgage (NYSE:TMA) was one of the larger mortgage lenders in the US. Its stock now trades at $.65, down from almost $27 a year ago. That means it market cap was $5 billion then.

According to The Wall Street Journal, TMA said in a federal filing that "the future of the home-mortgage finance company as a viable business remains in doubt." The company is trying to raise over $1.3 billion, but, by many accounts, that is not going well.

One of the issues that the Thornburg problems opens, again, is why Bank of America (NYSE:BAC) is so anxious to buy Countrywide (NYSE:CFC). While the largest mortgage lender may have problems which are not quite as severe as Thornburg's, it still faces a growing number of customer defaults.

Many on Wall St. would argue that Countrywide would trade well below its current price of $4.67,down from its 52-week high of $38.89, if BAC had not made its offer. It has traded as low as $3.95. CFC has had trouble with regulators, write-offs and in being probed for its lending practices.

Could Countrywide have fallen below $1 if it did not have a firm buy-out offer? Certainly.

Douglas A. McIntyre is an editor at 247wallst.com.