Thornburg Mortgage said its survival is at stake because it is unable to meet $610 million of margin calls.
The company also said it will restate 2007 results and take a $427.8 million charge as of Dec. 31 for its holdings of adjustable-rate mortgages.
Thornburg said falling mortgage prices together with liquidity imperiled by a surge of margin calls from its own lenders "have raised substantial doubt about the company's ability to continue as a going concern."
It said the margin calls "significantly exceeded" its available liquidity. Some analysts have said the company might need to file for bankruptcy protection.
Shares were down more than 20 percent on the New York Stock Exchange Friday.
Santa Fe, N.M.-based Thornburg has suffered as the housing slump and tight credit caused investors to stop buying securities they no longer consider safe. These include the large, adjustable-rate mortgages in which it specializes.
Thornburg on Wednesday said its failure to meet a margin call from JPMorgan Chase & Co triggered defaults under other loan agreements, and that its obligations under those agreements were "material." Margin calls force borrowers to pay back loans or post more collateral.
Chief Executive Larry Goldstone said Thornburg is working to meet its obligations so it can "continue as a going concern, and ensure stability."
Thornburg shares closed at $11.54 on Feb 27, the last day before it began disclosing a series of margin calls that began in mid-February.