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Thornburg's Goldstone: Mortgage Markets Still Not Functioning

Thornburg Mortgage'spresident Larry Goldstone told CNBC that mortgage markets are still not functioning properly and that he's concerned that the housing slump could usher in a recession.

"I am definitely concerned about it," said Goldstone. "What I see right now is a very steady and persistent tightening of credit standards across the entire consumer spectrum. Ultimately, at the end of the day, that's not going to be a good thing."

"I'm not a fan of easy credit, but I'm also not a believer that extremely tight credit. I'm afraid the pendulum is going to swing too far in the other direction - that's what concerns me," he said.

Those sentiments echo concerns that Countrywide CEO Angelo Mozilo expressed to CNBC's Maria Bartiromo earlier today.

Last week Thornburg was forced to sell over $20 billion of its mortgage-backed securities to improve its financial position.

Goldstone said "clearly our situation has improved since we took those actions last week."

But he was quick to point out that "the situation is not all the much better in the mortgage markets."

"These markets are still not functioning all the well today. We still need some help here as there is a substantial increase in delinquent loans for many lenders - thank goodness not us," continued to Goldstone.

He also said Thornburg is not interested in selling a stake in itself as Countrywide Financial has to Bank of America.

"Their situation is very different from ours. We are very comfortable with our niche. I don't think we have quite the same degree of problems from a credit perspective in our portfolio as does Countrywide."

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