EXHIBIT 10.1

                              MANAGEMENT AGREEMENT


     THIS  MANAGEMENT  AGREEMENT,  is  entered  into as of July 15, 1999, by and
between  THORNBURG  MORTGAGE  ASSET  CORPORATION,  a  Maryland  corporation
(hereinafter  referred  to  as  the  "Company"), and THORNBURG MORTGAGE ADVISORY
CORPORATION,  a Delaware corporation (hereinafter referred to as the "Manager"),
with  respect  to  the  following:

                                   WITNESSETH:

     WHEREAS,  the  Company  is engaged in the business of investing in mortgage
securities  ("Mortgage  Securities")  and  mortgage  loans  ("Mortgage  Loans")
(collectively,  "Mortgage  Assets")  and  has  qualified  for  the  tax benefits
accorded to a real estate investment trust ("REIT")  by Sections 856 through 860
of  the  Internal  Revenue  Code  of  1986  ("Code"),  as  amended;  and

     WHEREAS,  the  Company  desires to continue to retain the Manager to manage
the assets of the Company and to perform administrative services for the Company
in  the  manner and on the terms set forth herein, and wishes to enter into this
Agreement  for  a ten (10) year term and thereafter until the Company's board of
directors  (the  "Board  of  Directors")  shall  have  met to take action on the
renewal  or  termination  of  this  Agreement;  and

     WHEREAS,  the Manager shall not engage in any activity which would cause it
to  be  required  to  register  as  an  investment  advisor under the Investment
Advisers  Act  of  1940;  and

     WHEREAS,  the  Manager  shall  comply  with  all  laws applicable to it and
arising  in  connection  with  this  Agreement.

     NOW  THEREFORE, in consideration of the mutual agreements herein set forth,
the  parties  hereto  agree  as  follows:

     SECTION  1.     Definitions.  Capitalized terms used but not defined herein
                     -----------
shall  have the meanings assigned them in the currently effective Prospectus and
Form 10-K of the Company as filed with the Securities and Exchange Commission as
of  the date of this Agreement.  In addition, the following terms shall have the
meanings  assigned  to  them:

     (a)     "Agreement"  means  this Management Agreement, as amended from time
to  time.

     (b)     "Agreement  Date"  means the date reflected on page one as of which
this  Agreement  is  signed  and  dated.

     (c)     "Average  Net  Invested Assets" means for any period the difference
between  (i)  the aggregate book value of the consolidated assets of the Company
and  it  subsidiaries,  before  reserves  for depreciation or bad debts or other
similar  noncash  market value adjustments and reserves, and (ii) the book value
of  average  debt  associated  with  the Company's ownership of Mortgage Assets,
computed  by  taking  the  average  of  such net values at the end of each month
during  such  period.

     (d)     "Average  Net Worth" means for any period the arithmetic average of
the  sum of the gross proceeds from any offering of its equity securities by the
Company,  before  deducting any underwriting discounts and commissions and other
expenses  and  costs  relating  to  the  offering,  plus  the Company's retained
earnings  (without  taking  into  account  any losses incurred in prior periods)
computed  by  taking  the average of such values at the end of each month during
such  period,  and  shall be reduced by any amount that the Company pays for the
repurchases  of  Common  Stock.

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     (e)     "Governing  Instruments"  means  the  articles of incorporation and
bylaws  in  the  case  of  a  corporation.

     (f)     "Return  on  Equity"  means  for  any  quarter  the  product of the
Company's  Net Income for the quarter divided by the Company's Average Net Worth
for  the  quarter.

     SECTION  2.     General  Duties of the Manager.  Subject to the supervision
                     ------------------------------
of  the  Company's  board  of  directors (the "Board of Directors"), the Manager
shall  provide  services to the Company, and to the extent directed by the Board
of Directors, shall provide similar services to any subsidiary of the Company as
follows:

     (a)     serve  as  the Company's consultant with respect to formulation and
updating  of  investment criteria and policy guidelines for consideration by the
Board  of  Directors  ("Guidelines");

     (b)     represent  the  Company  in  connection with (i) its commitments to
purchase and (ii) the purchase of Mortgage Assets, including the accumulation of
Mortgage  Loans  for  securitization;

     (c)     furnish  reports  and  statistical  and  economic  research  to the
Company  regarding  the  Company's  investments  and activities and the services
performed  for  the  Company  by  the  Manager;

     (d)     monitor  and provide to the Board of Directors on an on-going basis
price  information  and  other  data obtained from certain nationally recognized
dealers  that  maintain  markets  in  Mortgage Assets identified by the Board of
Directors  from  time  to  time,  and  provide  data  and advice to the Board of
Directors  in  connection  with  the  identification  of  such  dealers;

     (e)     administer  the day-to-day operations of the Company and perform or
supervise  the  performance  of such other administrative functions necessary or
advisable for the management of the Company as may be agreed upon by the Manager
and  the  Board  of  Directors  including, without limitation, collection of the
Company's  revenues and payment of the Company's expenses, debts and obligations
and  maintenance of appropriate computer services to provide such administrative
functions;

     (f)     communicate on behalf of the Company with the holders of the equity
and  debt  securities  of  the  Company  as  required  to satisfy the continuous
reporting  and  other  requirements  of  any  governmental bodies or agencies to
holders of such securities and third parties and to maintain effective relations
with  such  holders  of  the  Company's  securities;

     (g)     designate  a  servicer for those Mortgage Loans sold to the Company
by  originators  or  sellers  that  have  elected  not to service such loans and
arrange  for  the  monitoring  and  administering  of  such  servicers;

     (h)     counsel  the Company in connection with policy decisions to be made
by  the  Board  of  Directors;

     (i)     upon  request by and in accordance with the directions of the Board
of  Directors,  invest  or  reinvest  any  money  of  the  Company;

     (j)     engage  in  hedging  activities on behalf of the Company consistent
with  the  Company's  qualification  as  a  REIT  and  with  the  Guidelines;

     (k)     arrange  for  the  issuance  of  Mortgage  Securities from pools of
Mortgage  Loans  acquired  by  the Company, and provide to the Company itself or
through  another  appropriate party all services in connection with the creation
of  Mortgage  Securities,  including:

     (1)     serving as consultant with respect to the structuring of each class
or  series  of  Mortgage  Securities;

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     (2)     negotiating  the  rating  requirements  with  rating  agencies with
respect  to  the  rating  of  each  class  or  series  of  Mortgage  Securities;

     (3)     accumulating  and  reviewing all Mortgage Loans which may secure or
constitute  the  mortgage  pool for each class or series of Mortgage Securities;

     (4)     negotiating  all agreements and credit enhancements with respect to
each  class  or  series  of  Mortgage  Securities;

     (5)     issuing  commitments  on behalf of the Company to purchase Mortgage
Loans  to  be  used  to secure or constitute the mortgage pool for each class or
series  of  Mortgage  Securities;

     (6)     organizing  and administering all activities in connection with the
closing  of  each  class  or  series  of  Mortgage  Securities,  including  all
negotiations  and  agreements  with  underwriters,  trustees,  servicers, master
servicers  and  other  parties;  and

     (7)     performing such other services as may be required from time to time
for  completing  the  creation  of  each class or series of Mortgage Securities.

     (l)     provide  to the Company itself or through another appropriate party
all  services  in  connection with the administration of each class or series of
Mortgage  Securities  created  by  the  Company;

     (m)     provide  the  executive  and administrative personnel, office space
and  services  required  in  rendering  the  foregoing  services to the Company;

     (n)     perform  such  other  services as may be required from time to time
for management and other activities relating to the assets of the Company as the
Manager  shall  deem  necessary,  advisable  or appropriate under the particular
circumstances;

     (o)     cause  the  Company  to  qualify  to  do business in all applicable
jurisdictions  as  may  be required from time to time under applicable state and
federal  laws;  and

     (p)     comply  with  all  laws  applicable to the Manager and use its best
efforts  to cause the Company to comply with all laws applicable to the Company.

     SECTION  3.     Additional  Activities  of  Manager.
                     -----------------------------------

     (a)     Nothing  herein  shall prevent the Manager or any of its Affiliates
from  engaging in other businesses or from rendering services of any kind to any
other  person  or entity, including investment in, or advisory service to others
investing  in,  any  type of real estate investment, including investments which
meet  the  principal  investment  objectives  of  the  Company.  Notwithstanding
anything  elsewhere  in  this  Agreement  to the contrary, the Manager shall not
engage  in  any  activity  which would cause it to be required to register as an
investment  advisor  under  the Investment Advisers Act of 1940.  In furtherance
thereof,  during  any twelve (12) month period, the Manager shall not (i) render
investment  advice  to  more  than  fifteen  (15)  clients, (ii) hold itself out
generally  to the public as an investment advisor, or (iii) act as an investment
advisor  to  any  investment  Company  that  is  registered under the Investment
Company  Act.

     (b)     Directors,  officers,  employees  and  agents  of  the  Manager  or
Affiliates  of  the Manager may serve as directors, officers, employees, agents,
nominees or signatories for the Company or any subsidiary of the Company, to the
extent  permitted  by their Governing Instruments, as from time to time amended,
or  by  any  resolutions  duly adopted by the Board of Directors pursuant to the
Company's  Governing  Instruments.  When executing documents or otherwise acting
in  such  capacities  for  the  Company, such persons shall use their respective
title  in  the  Company.

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     SECTION  4.     Bank Accounts.  At the direction of the Board of Directors,
                     -------------
the  Manager may establish and maintain one or more bank accounts in the name of
the  Company  or any subsidiary of the Company, and may collect and deposit into
any  such  account  or  accounts,  and  disburse  funds from any such account or
accounts, under such terms and conditions as the Board of Directors may approve;
and  the  Manager shall from time to time render appropriate accountings of such
collections  and  payments  to  the  Board of Directors and, upon request by the
Company,  to  the  auditors  of  the  Company  or any subsidiary of the Company.

     SECTION  5.     Records;  Confidentiality.  The  Manager  shall  maintain
                     -------------------------
appropriate  books  of  account  and  records  relating  to  services  performed
hereunder,  and  such  books  of  account  and  records  shall be accessible for
inspection by representatives of the Company or any subsidiary of the Company at
any  time during normal business hours.  The Manager shall keep confidential any
and all information it obtains from time to time in connection with the services
it  renders  under  this Agreement and shall not disclose any portion thereof to
non-affiliated  third  parties  except  with  the  prior  written consent of the
Company,  or  except  as  may be required by applicable law or judicial process.

     SECTION  6.     Obligations  of  Manager.
                     ------------------------

     (a)     The  Manager  shall  require  each seller or transferor of Mortgage
Assets to the Company to make such representations and warranties regarding such
Mortgage  Assets as may be, in the judgment of the Manager, necessary, advisable
and  appropriate.  In  addition,  the Manager shall take such other action as it
deems  necessary,  advisable or appropriate with regard to the protection of the
Company's  investments.

     (b)     The  Manager  shall  refrain  from any action which would adversely
affect  the  status  of  the  Company  or,  if applicable, any subsidiary of the
Company  as  a  REIT  or which would  violate any law, rule or regulation of any
governmental  body  or  agency  having jurisdiction over the Company or any such
subsidiary  or  which  would otherwise not be permitted by the Company's or such
subsidiary's  Governing Instruments.  If the Manager is ordered to take any such
action by the Board of Directors, the Manager shall promptly notify the Board of
Directors of the Manager's judgment that such action would adversely affect such
status or violate any such law, rule or regulation or the Governing Instruments.
The  Manager,  its  directors, officers, stockholders and employees shall not be
liable to the Company, any subsidiary of the Company, or the Board of Directors,
including  the "Independent Directors" (as defined in the Company's Bylaws), for
any  act  or  omission  by the Manager, its directors, officers, stockholders or
employees  except  as  provided  in  Section  11  of  this  Agreement.

     SECTION  7.     Compensation.
                     ------------

     (a)     Annual  Base  Management  Fee.  For  services  rendered  under this
             -----------------------------
Agreement,  the  Company  shall pay to the Manager, commencing with the month in
which  the  Agreement  Date  occurs,  an annual base management fee based on the
Average  Net  Invested Assets of the Company and its subsidiaries for each year,
payable  monthly  in  arrears,  as  follows:

        1.1%  of  the first $300 million of Average Net Invested Assets,
        plus .8% of the portion  of  Average  Net  Invested Assets above
        $300  million.

The annual base management fee shall be calculated by the Manager within fifteen
(15)  days  after  the  end  of  the  each  month, and such calculation shall be
promptly  delivered  to  the  Company.  The Company shall pay to the Manager the
applicable  portion  of  the annual base management fee payable pursuant to this
Section  7 (a) for each month within thirty (30) days after the end of each such
month.  Payments  of  the  applicable  portion of the annual base management fee
shall be pro rated based on the number of days elapsed during any partial month.

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     (b)     Incentive  Compensation.  In addition to the annual base management
             -----------------------
fee, the Manager shall receive as incentive compensation for each fiscal quarter
an amount equal to twenty percent (20%) of the Net Income of the Company, before
Incentive Compensation, in excess of the amount that would produce an annualized
Return  on  Equity  equal  to the Ten Year U.S. Treasury Rate (average of weekly
average  yield  to maturity for U.S. Treasury securities (adjusted to a constant
maturity  of ten (10) years) as published weekly by the Federal Reserve Board in
publication  H.15  during  a  quarter)  plus  one  percent  (1%).  The incentive
compensation  calculation  and  payment shall be made quarterly in arrears.  The
Manager shall compute the incentive compensation payable under this Section 7(b)
within  forty-five  (45) days after the end of each fiscal quarter.  The Company
shall  pay the incentive compensation with respect to each fiscal quarter within
15  days  following  the  delivery to the Company of Manager's written statement
setting  forth  the  computation of the incentive compensation for such quarter.

     (c)     If loans are made to the Company by an "Affiliate" (as such term is
defined as the Company's by-laws) of the Manager, the maximum amount of interest
that may be charged by such Affiliate shall be the prime rate publicly announced
by  Citibank,  N.A.  from  time  to  time  plus  1%  per  year.

     (d)     Net  Income  of the Company, solely for purposes of calculating the
Manager's  Incentive  Compensation  under  Section  7(b), shall be determined by
calculating  net income available to shareholders of Common Stock, in accordance
with  generally  accepted  accounting  principles ("GAAP"), as determined by the
Company's  independent  certified  public  accountants.

     (e)     The  proceeds from any issue of preferred stock which may from time
to  time  be  created and authorized for issuance by the Board of Directors (the
"Preferred  Stock")  shall  be  included  in  Average  Net  Invested  Assets  in
calculating  the  Manager's  annual base management fee under Section 7(a).  For
calculating  the  Manager's  Incentive  Compensation,  Preferred  Stock shall be
excluded  from  Average  Net  Worth and the minimum or fixed rate portion of any
Preferred  Stock dividend shall be deducted from taxable income before incentive
compensation.

     SECTION  8.     Expenses  of the Company.  The Company or any subsidiary of
                     ------------------------
the  Company shall pay all of its expenses as set forth on Annex A attached, and
shall  reimburse  the  Manager for documented expenses of the Manager reasonably
incurred  on  its  behalf in furtherance of the Manager's responsibilities under
this Agreement.  The reimbursable expenses of the Manager shall include, without
limitation,  the  amount  of any New Mexico Gross Receipts Tax which the Manager
becomes  obligated  to  pay  based on the annual base management fees, incentive
compensation and any other receipts which the Manager derives in connection with
its  service to the Company.  The Manager shall be responsible for its own costs
of  operation  set  forth  under  Section  II  on  Annex  A.

     SECTION 9.  Annual Operating Expenses Limitation Requiring Reimbursement by
                 ---------------------------------------------------------------
the  Manager.
------------

     (a)     Subject  to  the  adjustment as provided in paragraph (b), expenses
incurred  by the Manager on behalf of the Company shall be reimbursed monthly to
the  Manager  within  30  days  after  the end of each month.  The Manager shall
prepare  a  statement documenting the expenses of the Company and those incurred
by  the  Manager  on  behalf of the Company during each month, and shall deliver
such  statement  to  the  Company  within  15  days after the end of each month.

     (b)     Within  120  days  after  the  end  of each of the Company's fiscal
years,  the  Manager  shall  reimburse the Company for any expense reimbursement
received  by  the Manager from the Company hereunder with respect to such fiscal
year  to  the extent that the Operating Expenses (as defined in Annex A attached
hereto)  of  the  Company  for  such fiscal year exceed the greater of 2% of its
Average  Net  Invested  Assets  or  25%  of its Net Income for such fiscal year;
unless  a majority of the Independent Directors determines that, based upon such
unusual  or  nonrecurring  factors which they deem sufficient, a higher level of
expenses  is  justified for such fiscal year, in which case, such expenses shall
be  payable  to  the  Manager  in succeeding fiscal years to the extent that the
expenses  of  the  Company  are  less  than the greater of 2% of its Average Net
Invested  Assets  or  25%  of  its  Net  Income  for  such  fiscal  year.  The
determination  of  Net  Income  for  any  period for purposes of calculating the
expense  limitation  will be the same as for calculating the Manager's incentive
compensation,  except  that  the  determination  of  Net  Income for purposes of
calculating  the  expense  limitation  will  include  any incentive compensation
payable for such period.  The amount of any Gross Receipts Tax reimbursed by the
Company  to  the Manager pursuant to Section 8 above, as well as the other costs
and  expenses  enumerated on Annex A attached hereto, are not Operating Expenses
and  are  not  subject  to  the  operating  expense  limitation set forth above.

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     SECTION 10.  Monitoring Servicing.  The Manager will monitor and administer
                  --------------------
the  servicing  of the Company's Mortgage Loans, other than loans pooled to back
Mortgage  Securities.  Such monitoring and administrative services will include,
but  not  be  limited  to,  the  following activities:  serving as the Company's
consultant with respect to the servicing of loans; collection of information and
submission of reports pertaining to the Mortgage Loans and to moneys remitted to
the  Manager  or the Company by Servicers; periodic review and evaluation of the
performance  of  each  servicer  to  determine its compliance with the terms and
conditions  of  the  applicable  servicing agreement and, if deemed appropriate,
recommending  to the Company the termination of such servicing agreement; acting
as a liaison between Servicers and the Company and working with servicers to the
extent  necessary  to  improve  their  servicing  performance;  review  of  and
recommendations  as  to  fire  losses,  easement  problems  and  condemnation,
delinquency, foreclosing and other reports on Mortgage Loans; supervising claims
filed under any mortgage insurance policies; and enforcing the obligation of any
servicer  to  repurchase Mortgage Loans from the Company.  The Manager may enter
into  subcontracts  with other parties, including its Affiliates, to provide any
such  services  for the Manager; provided however, all such subcontractors shall
                                 ----------------
then  be  subject  to  the terms of this Agreement and the Manager shall provide
written notice of such subcontracts to the Company; and, provided further, in no
                                                         -------- -------
event  shall  any  such  subcontracts or subcontractors contravene the Manager's
obligations  and  limitations  set  forth  in  Section  3 (a) of this Agreement.

     SECTION  11.  Limits  of  Manager  Responsibility.
                   -----------------------------------

     (a)     The  Manager  assumes  no responsibility under this Agreement other
than  to render the services called for hereunder in good faith and shall not be
responsible  for  any action of the Board of Directors in following or declining
to  follow  any  advice  or  recommendations  of  the Manager.  The Manager, its
directors,  officers,  stockholders  and  employees  will  not  be liable to the
Company,  any  subsidiary  of  the  Company,  the  independent  Directors or the
Company's  or  its  subsidiary's  stockholders  for any acts or omissions by the
Manager,  its  directors,  officers,  stockholders  or  employees  under  or  in
connection with this Agreement, except by reason of acts constituting bad faith,
willful misconduct, gross negligence or reckless disregard of their duties.  The
Company  shall  reimburse,  indemnify  and  hold  harmless  the  Manager,  its
stockholders,  directors,  officers  and  employees  of  and  from  any  and all
expenses,  losses,  damages,  liabilities,  demands,  charges  and claims of any
nature whatsoever (including, without limitation, attorneys' fees) in respect of
or  arising  from  any  acts  or  omissions  of  the  Manager, its stockholders,
directors,  officers  and employees made in good faith in the performance of the
Manager's  duties  under  this Agreement and not constituting bad faith, willful
misconduct,  gross  negligence  or  reckless  disregard  of  its  duties.

     (b)     The  Manager  shall  reimburse,  indemnify  and  hold  harmless the
Company,  any  subsidiary, or any of their stockholders, directors, officers and
employees  from  any  and  all  expenses, losses, damages, liabilities, demands,
charges  and claims (including, without limitation, attorneys' fees) arising out
of  any intentional misstatements of fact made by the Manager in connection with
the issuance of commitments to purchase Mortgage Assets on behalf of the Company
and  the  purchase  of  Mortgage  Assets  by  the  Company  resulting  from such
commitments.

     SECTION  12.  No  Joint  Venture.  The  Company  and  the  Manager  are not
                   ------------------
partners  or  joint  venturers  with  each  other  and  nothing  herein shall be
construed  to make them such partners or joint venturers or impose any liability
as  such  on  either  of  them.

     SECTION  13.  Term;  Termination.
                   ------------------

     (a)     This  Agreement  shall  commence  on  the  Agreement Date and shall
continue  in force until the next regularly scheduled Board of Directors meeting
of  the  Company  following  the  tenth  anniversary  of the Agreement Date, and
thereafter,  it  may be extended only with the consent of the Manager and by the
affirmative  vote  of a majority of the Board of Directors, including a majority
of  the  Independent  Directors.  Each extension shall be executed in writing by
the  parties  hereto  before  the  expiration of this Agreement or any extension
thereof.  Each  such  extension  shall  not  exceed  a  term  of  ten  years.
Notwithstanding  any  other  provision  to  the contrary, this Agreement, or any
extension hereof, may be terminated by the Company, upon 60 days written notice,
by  majority  vote  of  the  Independent  Directors  or  by majority vote of the
Stockholders.  If this Agreement is terminated pursuant to this Section 13, such
termination  shall be subject to the provisions of Section 16 of this Agreement.

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     (b)     Name  Change Upon Termination of Management Agreement.  The Company
             -----------------------------------------------------
agrees  that,  if  at any time the Manager or any Affiliate of the Manager shall
cease  to  serve  generally  as  Manager  of the Company or any Subsidiary, upon
receipt  of  a  written  request of the Manager, the Company and such Subsidiary
will  cause their governing instruments, including articles of incorporation and
by-laws,  to  be  amended  so  as  to  change  the  name  of the Company or such
Subsidiary  to  a  name  that  does not include "Thornburg" or any approximation
thereof.

     (c)     The  Independent  Directors  shall determine at least annually that
the compensation paid to the Manager is reasonable in relation to the nature and
quality  of  services  performed  and  also  shall  supervise performance of the
Manager and the compensation paid to it to determine that the provisions of this
Agreement are being carried out.  The Independent Directors shall also determine
at least annually that the total fees and expenses of the Company are reasonable
in  light  of all relevant factors.  Each such determination shall be based upon
the  following  factors and all other factors the Independent Directors may deem
relevant  and  the findings of the Independent Directors on each of such factors
shall  be  recorded  in  the  minutes  of  the  Board  of  Directors:

     (1)     the  size  of  the  management  fee  in  relation  to  the  size,
compensation  and  profitability  of  the  investment  portfolio of the Company;

     (2)     the  success  of  the Manager in generating opportunities that meet
the  investment  objectives  of  the  Company;

     (3)     the  rates  charged  to  other real estate investment trusts and to
other  investors  by  advisors  performing  similar  services;

     (4)     additional  revenues  realized  by  the  Manager and its affiliates
through  their  relationship  with the Company whether paid by the Company or by
others  with  whom  the  Company  does  business;

     (5)     the  quality  and  extent  of  service  and advice furnished to the
Company;

     (6)     the  performance  of  the  investment  portfolio  of  the  Company,
including  income, conservation or appreciation of capital, frequency of problem
investments  and  competence  in  dealing  with  distress  situations;  and

     (7)     the  quality  of  the  investment  portfolio  of  the  Company.

     SECTION  14.  Assignments.
                   -----------

     (a)     Except  as  set  forth  in  Section  13(b)  of this Agreement, this
Agreement shall terminate automatically in the event of its assignment, in whole
or  in part, by the Manager, unless the Company (with the approval of a majority
of  the Independent Directors) consents to such assignment in advance.  Any such
assignment  shall  bind the assignee hereunder in the same manner as the Manager
is  bound.  In addition, the assignee shall execute and deliver to the Company a
counterpart  of  this Agreement naming such assignee as Manager.  This Agreement
shall  not  be  assigned by the Company without the prior written consent of the
Manager,  except  in  the  case  of assignment by the Company to a REIT or other
organization  which  is  a  successor  (by  merger, consolidation or purchase of
assets) to the Company, in which case such successor organization shall be bound
hereunder  and by the terms of such assignment in the same manner as the Company
is  bound  hereunder.

     (b)     Notwithstanding  any  provision  of this Agreement to the contrary,
subject  to  Section  3(a), the Manager may subcontract and assign any or all of
its  responsibilities  under Sections 2(k), 2(l) and 10 of this Agreement to any
of  its  Affiliates,  and the Company hereby consents to any such assignment and
subcontracting.

                                       43
<PAGE>
     SECTION  15.  Termination  by  Company  for  Cause.  At  the  option of the
                   ------------------------------------
Company,  this  Agreement  shall  be  and become terminated upon 60 days written
notice  of  termination from the Board of Directors to the Manager if any of the
following  events  shall  occur:

     (a)     if  the  Manager shall violate any provision of this Agreement and,
after  notice  of  such violation, shall not cure such violation within 30 days;

     (b)     there  is  entered  an  order for relief or similar decree or order
with  respect  to  the  Manager  by  a court having competent jurisdiction in an
involuntary  case  under  the  federal  bankruptcy  laws  as  now  or  hereafter
constituted  or  under any applicable federal or state bankruptcy, insolvency or
other  similar  laws;  or  the  Manager  (i)  ceases,  or  admits in writing its
inability  to  pay  its debts as they become due and payable, or makes a general
assignment  for  the  benefit  of, or enters into any composition or arrangement
with,  creditors;  (ii)  applies  for,  or  consents  (by  admission of material
allegations  of  a  petition  or  otherwise)  to  the appointment of a receiver,
trustee,  assignee,  custodian,  liquidator  or  sequestrator  (or other similar
official) of the Manager or of any substantial part of its properties or assets,
or  authorizes  such  an  application  or  consent,  or proceedings seeking such
appointment  are  commenced  without  such authorization, consent or application
against  the  Manager  and continue undismissed for 30 days; (iii) authorizes or
files  a  voluntary  petition  in  bankruptcy,  or  applies  for or consents (by
admission of material allegations of a petition or otherwise) to the application
of  any  bankruptcy,  reorganization,  arrangement,  readjustment  of  debt,
insolvency,  dissolution, liquidation or other similar law  of any jurisdiction,
or  authorizes  such  application  or  consent,  or  proceedings to such end are
instituted  against  the  Manager  without  such  authorization,  application or
consent  and  are  approved as properly instituted and remain undismissed for 30
days  or  result in adjudication of bankruptcy or insolvency; or (iv) permits or
suffers  all  or  any  substantial  part  of  its  properties  or  assets  to be
sequestered  or attached by court order and the order remains undismissed for 30
days;  or

     (c)     If  any  of the events specified in Section 15(b) of this Agreement
shall  occur,  the Manager shall give prompt written notice thereof to the Board
of  Directors  upon  the  occurrence  of  such  event.

     SECTION  16.  Action  Upon  Termination.
                   -------------------------

     (a)     From and after the effective date of termination of this Agreement,
pursuant  to  Sections  13, 14 or 15 of this Agreement, the Manager shall not be
entitled  to compensation for further services hereunder, except pursuant to any
                                                          ------
separate  written  management  termination  agreement  that  may  hereafter  be
negotiated  by  the  parties, but shall be paid all compensation accruing to the
date  of  termination,  including  deferred  incentive  compensation  which  is
recoverable  in  accordance  with  Section  7(e)  of  this Agreement.  Upon such
termination,  the  Manager  shall  forthwith:

     (1)     after  deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or any subsidiary
of  the  Company  all money collected and held for the account of the Company or
any  subsidiary  of  the  Company  pursuant  to  this  Agreement;

     (2)     deliver  to  the  Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by  it,  covering the period following the date of the last accounting furnished
to  the  Board of Directors with respect to the Company or any subsidiary of the
Company;

     (3)     pay  to the Company all sums set forth on the accounting referenced
in  (b)  above;  and

     (4)     deliver to the Board of Directors all property and documents of the
Company  or  any  subsidiary  of the Company then in the custody of the Manager.

                                       44
<PAGE>
     (b)     Upon  the  occurrence  of  (i)  an  "Acquisition Event" or (ii) the
termination  of  this  Agreement  by the Company (in either case, a "Termination
Event"),  other than a termination for cause on the grounds set forth in Section
15  of this Agreement, the Company agrees to, and shall be obligated to, acquire
and  pay  for  substantially  all  of the assets of the Manager in a transaction
intended  to  qualify,  in  the  opinion of counsel reasonably acceptable to the
Manager,  as  a  tax  free  reorganization  pursuant  to Section 368(a)(1)(A) or
368(a)(1)(C)  of  the Internal Revenue Code, as amended, (the "Reorganization").
The  Reorganization  shall  be effected in a transaction intended to qualify, in
the  opinion  of  the  Company's  certified  public accountants, as a pooling of
interests  for financial accounting purposes if such treatment is then available
and,  in  the  determination of the Company, advisable. In consideration for the
Reorganization,  the  Company  shall  issue to the Manager an amount of publicly
registered  shares  of  Common  Stock  of  the  Company,  calculated as follows:

     (1)     The  Manager will retain an independent certified public accountant
mutually acceptable to the Company and the Manager to prepare in accordance with
generally  accepted accounting principals on the cash receipts and disbursements
method of accounting audited financial statements for the three 12 month periods
(the  "Statements")  over  the  thirty-six  month  period  ending  with the most
recently  completed  calendar  quarter  (the "Measuring Period"). The Statements
will  show  gross  revenues received by the Manager less all expenses (excluding
bonus  payments  to  the Manager's employees and affiliates) paid by the Manager
during  the  Measuring  Period.

     (2)     The  Company  will  issue  to  the  Manager  as  payment  for  the
Reorganization  that  number  of  shares of Common Stock of the Company equal to
120%  of  the  quotient of the Manager's net profit (excluding bonus payments to
the Manager's employees and affiliates) on the Statement for the 12 month period
showing  the  highest  net  profit  during  the Measuring Period, divided by the
dividend per share declared by the Company during the most recent fiscal quarter
in  which  a  dividend  was declared, on an annualized basis; provided, however,
that  such  Reorganization  payment shall not be less than the sum of $5 million
for  each  $100  million  of equity capital attributable to the Company's Common
Stock  and  preferred  stock.

     (3)     "Acquisition  Event"  means -- (A) the acquisition by any person or
entity  who or which, together with all affiliates and associates of such person
or  entity  shall become the beneficial owner of 20% or more of the common stock
of  the  Company  then  outstanding,  but  shall  not  include  the Company, any
subsidiary or employee benefit plan thereof (collectively, "Excluded Entities"),
through  an  unsolicited  tender offer or exchange offer or other acquisition of
such  number of shares by such person, or -- (B) a change in the majority of the
Board  of  Directors  of  the  Company, whether by resignation or removal, which
change  occurs  as  a result of the acquisition of a controlling interest in the
outstanding  voting  stock  of  the  Company by any person or entity, other than
Excluded  Entities, or -- (C) a merger, consolidation, or reorganization between
the  Company  and  another  entity  with  the Company being either the surviving
entity  or  the  acquired entity, or the transfer of assets into the Company for
stock  or  other  equity securities of the Company, or securities exercisable or
convertible  into equity securities by any person or entity, other than Excluded
Entities.

     (4)     The  Company  shall  at  all  times  keep  and maintain an adequate
reserve of authorized but unissued shares available to fulfill the obligation to
issue  shares  pursuant  to  the  Reorganization.

     (5)     Upon  the  occurrence  of  an  Acquisition Event, the Company shall
promptly  file  a  registration statement and use its best efforts to cause such
registration  statement to become effective under the Securities Act of 1933, as
amended,  with  respect  to  the public offering and distribution of such shares
reserved  for  issuance  pursuant  to  the  Reorganization.

     (6)     The  Company  and  the  Manager will, as soon as possible after the
occurrence of an Acquisition Event, but in no event later than 60 days after the
Acquisition  Event,  take all necessary corporate action to consummate and close
the  Reorganization,  including  the  Company's issuance of the shares of common
stock  to  the  Manager  as  determined  in  paragraph  (2)  above.

                                       45
<PAGE>
     SECTION  17.  Release of Money or Other Property Upon Written Request.  The
                   -------------------------------------------------------
Manager agrees that any money or other property of the Company or any subsidiary
of  the  Company  held  by the Manager under this Agreement shall be held by the
Manager  as  custodian  for  the  Company  or such subsidiary, and the Manager's
records  shall  be appropriately marked clearly to reflect the ownership of such
money  or  other property by the Company or such subsidiary. Upon the receipt by
the  Manager  of  a  written  request signed by a duly authorized officer of the
Company  requesting  the  Manager to release to the Company or any subsidiary of
the Company any money or other property then held by the Manager for the account
of  the  Company  or  any  subsidiary  of  the Company under this Agreement, the
Manager  shall  release  such  money  or  other  property  to the Company or any
subsidiary  of  the  Company within a reasonable period of time, but in no event
later  than  30  days following such request. The Manager shall not be liable to
the  Company,  any  subsidiary of the Company, the Independent Directors, or the
Company's stockholders for any acts performed or omissions to act by the Company
or  any subsidiary of the Company in connection with the money or other property
released to the Company or any subsidiary of the Company in accordance with this
Section.  Subject to the foregoing, the Company shall indemnify the Manager, its
directors,  officers,  stockholders  and employees against any and all expenses,
losses,  damages,  liabilities,  demands,  charges  and  claims  of  any  nature
whatsoever,  which  arise in connection with the Manager's release of such money
or  other property to the Company or any subsidiary of the Company in accordance
with  the  terms  of this Section 17. Indemnification pursuant to this provision
shall  be  in  addition  to  any  right  of the Manager to indemnification under
Section  11  of  this  Agreement.

     SECTION  18.  Representations  and  Warranties.
                   --------------------------------

     (a)     The  Company  hereby  represents  and  warrants  to  the Manager as
follows:

     (1)     The  Company  is  duly  organized,  validly  existing  and  in good
standing  under  the  laws  of  the  jurisdiction  of its incorporation, has the
corporate  power  to  own its assets and to transact the business in which it is
now  engaged and is duly qualified as a foreign corporation and in good standing
under  the laws of each jurisdiction where its ownership or lease of property or
the  conduct of its business requires such qualification, except for failures to
be  so  qualified, authorized or licensed that could not in the aggregate have a
material  adverse  effect  on  the  business,  operations,  assets  or financial
condition  of  the  Company  and its subsidiaries, taken as a whole. The Company
does  not  do  business  under  any  fictitious  business  name.

     (2)     The  Company  has  the  corporate  power  and authority to execute,
deliver  and  perform  this Agreement and all obligations required hereunder and
has  taken  all  necessary  corporate  action to authorize this Agreement on the
terms  and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other person
including, without limitation, stockholders and creditors of the Company, and no
license,  permit,  approval  or authorization of, exemption by, notice or report
to,  or  registration, filing or declaration with, any governmental authority is
required  by  the  Company  in  connection with this Agreement or the execution,
delivery,  performance,  validity  or  enforceability  of this Agreement and all
obligations  required hereunder. This Agreement has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
officer  of  the Company, and this Agreement constitutes, and each instrument or
document  required  hereunder  when  executed  and  delivered  hereunder  will
constitute,  the legally valid and binding obligation of the Company enforceable
against  the  Company  in  accordance  with  its  terms.

     (3)     The  execution,  delivery and performance of this Agreement and the
documents  or  instruments required hereunder, will not violate any provision of
any  existing  law or regulation binding on the Company, or any order, judgment,
award  or  decree  of any court, arbitrator or governmental authority binding on
the  Company,  or  the Governing Instruments of, or any securities issued by the
Company  or  of  any  mortgage,  indenture,  lease, contract or other agreement,
instrument  or  undertaking  to  which  the  Company  is a party or by which the
Company  or  any of its assets may be bound, the violation of which would have a
material  adverse  effect  on  the  business  operations,  assets  or  financial
condition  of  the  Company and its subsidiaries, taken as a whole, and will not
result  in,  or  require,  the  creation or imposition of any lien on any of its
property,  assets  or  revenues pursuant to the provisions of any such mortgage,
indenture,  lease,  contract  or  other  agreement,  instrument  or undertaking.

     (4)     Nothing  in  this  Agreement shall or is intended to contravene any
fact  or  representation  set  forth  in any prospectus, registration statement,
annual  report  or  quarterly report as filed by the Company with the Securities
and  Exchange  Commission.

     (b)     The  Manager  hereby  represents  and  warrants  to  the Company as
follows:

                                       46
<PAGE>
     (1)     The  Manager  is  duly  organized,  validly  existing  and  in good
standing  under the laws of the jurisdiction of its formation, has the corporate
power  to own its assets and to transact the business in which it is now engaged
and  is  duly qualified to do business and is in good standing under the laws of
each jurisdiction where its ownership or lease of property or the conduct of its
business  require  such  qualification,  except for failures to be so qualified,
authorized  or  licensed that could not in the aggregate have a material adverse
effect  on the business operations, assets or financial condition of the Manager
and  its subsidiaries, taken as a whole.  The Manager does not do business under
any  fictitious  business  name.

     (2)     The  Manager  has  the  corporate  power  and authority to execute,
deliver  and  perform  this Agreement and all obligations required hereunder and
has  taken  all  necessary partnership action to authorize this Agreement on the
terms  and conditions hereof and the execution, delivery and performance of this
Agreement  and  all  obligations  required  hereunder.  No  consent of any other
person including, without limitation, partners and creditors of the Manager, and
no license, permit, approval or authorization of, exemption by, notice or report
to,  or  registration, filing or declaration with, any governmental authority is
required  by  the  Manager  in  connection with this Agreement or the execution,
delivery,  performance,  validity  or  enforceability  of this Agreement and all
obligations required hereunder.  This Agreement has been, and each instrument or
document  required hereunder will be executed and delivered by a duly authorized
agent  of  the  Manager,  and this Agreement constitutes, and each instrument or
document  required  hereunder  when  executed  and  delivered  hereunder  will
constitute,  the legally valid and binding obligation of the Manager enforceable
against  the  Manager  in  accordance  with  its  terms.

     (3)     The  execution,  delivery and performance of this Agreement and the
documents  or  instruments required hereunder, will not violate any provision of
any  existing  law or regulation binding on the Manager, or any order, judgment,
award  or  decree  of any court, arbitrator or governmental authority binding on
the  Manager,  or  any  securities  issued  by  the Manager  or of any mortgage,
indenture,  lease,  contract  or  other  agreement, instrument or undertaking to
which the Manager is a party or by which the Manager or any of its assets may be
bound,  the  violation  of  which  would  have  a material adverse effect on the
business  operations,  assets  or  financial  condition  of  the Manager and its
subsidiaries, taken as a whole, and will not result in, or require, the creation
or  imposition of any lien on any of its property assets or revenues pursuant to
the  provisions  of  any  such  mortgage  indenture,  lease,  contract  or other
agreement,  instrument  or  undertaking.

     (4)     Nothing in this Agreement shall or is tended to contravene any fact
or  representation  set  forth  in  the  Prospectus.

     SECTION  19.  Notice.  Unless  expressly  provided  otherwise  herein,  all
                   ------
notices,  request,  demands and other communications required or permitted under
this  Agreement shall be in writing and shall be deemed to have been duly given,
made  and  received  when  delivered  against  receipt or upon actual receipt of
registered  or  certified  mail, postage prepaid, return receipt requested.  The
parties may deliver to each other notice by electronically transmitted facsimile
copies ("Fax") provided that such Fax notice is followed within twenty-four (24)
hours  by  any  type  of  notice  otherwise provided for in this paragraph.  Any
notice  shall  be  duly  addressed  to  the  parties  as  follows:

                                       47
<PAGE>
     If  to  the  Company:               119  East  Marcy
                                         Santa  Fe,  NM  87501
                                         Attention:  Larry  A.  Goldstone

     Copy  to:                           Michael  B.  Jeffers,  Esq.
                                         Jeffers, Wilson, Shaff & Falk, LLP
                                         18881 Von Karman Avenue, Suite 1400
                                         Irvine,  CA  92612

     If  to  the  Manager:               119  East  Marcy
                                         Santa  Fe,  NM  87501
                                         Attention:  Garrett  Thornburg

     Copy  to:                           Michael B. Jeffers, Esq.
                                         Jeffers, Wilson, Shaff & Falk, LLP
                                         18881 Von Karman Avenue, Suite 1400
                                         Irvine, CA 92612

Either  party  may alter the address to which communications or copies are to be
sent  by  giving  notice  of  such  change  of  address  in  conformity with the
provisions  of  this  Section  19  for  the  giving  of  notice.

     SECTION  20.  Binding  Nature  of  Agreement; Successors and Assigns.  This
                   ------------------------------------------------------
Agreement  shall  be binding upon and inure to the benefit of the parties hereto
and  their respective heirs, personal representatives, successors and assigns as
provided  herein.

     SECTION  21.  Entire  Agreement.  This  Agreement  contains  the  entire
                   -----------------
agreement and understanding among the parties hereto with respect to the subject
matter  hereof,  and  supersedes  all  prior  and  contemporaneous  agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.  The express
terms hereof control and supersede any course of performance and/or usage of the
trade  inconsistent  with  any  of  the terms hereof.  This Agreement may not be
modified  or  amended  other  than  by  an  agreement in writing approved by the
Company  (including  a  majority  of the Independent Directors) and the Manager.

     SECTION 22.  Controlling Law.  This Agreement and all questions relating to
                  ---------------
its  validity,  interpretation, performance and enforcement shall be governed by
and construed, interpreted and enforced in accordance with the laws of the State
of  New  Mexico,  notwithstanding  any  New  Mexico  or  other  conflict  of law
provisions  to  the  contrary.

     SECTION  23.  Schedules  and Exhibits.  All Schedules and Exhibits referred
                   -----------------------
to herein or attached hereto are hereby incorporated by reference into, and made
a  part  of,  this  Agreement.

     SECTION  24.  Indulgences,  Not Waivers.  Neither the failure nor any delay
                   -------------------------
on  the  part of a party to exercise any right, remedy, power or privilege under
this  Agreement  shall  operate  as  a  waiver  thereof, nor shall any single or
partial  exercise of any right, remedy, power or privilege, nor shall any waiver
of  any  right,  remedy,  power  or  privilege with respect to any occurrence be
construed  as a waiver of such right, remedy, power or privilege with respect to
any  other occurrence.  No waiver shall be effective unless it is in writing and
is  signed  by  the  party  asserted  to  have  granted  such  waiver.

     SECTION 25.  Titles Not to Affect Interpretation.  The titles of paragraphs
                  -----------------------------------
and subparagraphs contained in this Agreement are for convenience only, and they
neither  form  a  part  of  this  Agreement  nor  are  they  to  be  used in the
construction  or  interpretation  hereof.

                                       48
<PAGE>
     SECTION  26.  Execution in Counterparts.  This Agreement may be executed in
                   -------------------------
any  number  of counterparts, including electronically transmitted counterparts,
each  of  which  shall  be  deemed  to be an original as against any party whose
signature  appears  thereon,  and all of which shall together constitute one and
the  same  instrument.  this  Agreement  shall  become  binding when one or more
counterparts  hereof,  individually or taken together, shall bear the signatures
of  all  of  the  parties  reflected  hereon  as  the  signatories.

     SECTION  27.  Provisions  Separable.  The  provisions of this Agreement are
                   ---------------------
independent of and separable from each other, and no provision shall be affected
or  rendered  invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

     SECTION 28.  Gender.  Words used herein regardless of the number and gender
                  ------
specifically  used,  shall  be deemed and construed to include any other number,
singular  or plural, and any other gender, masculine, feminine or neuter, as the
context  requires.

     SECTION  29.  Computation  of  Interest.  Interest  will be computed on the
                   -------------------------
basis  of  a  360-day  year  consisting  of  twelve  months of thirty days each.

                            [SIGNATURE  PAGE  FOLLOWS]

                                       49
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed this Management
Agreement  as  of  the  date  first  written  above.


                                 "Company"

                                 THORNBURG  MORTGAGE  ASSET  CORPORATION
                                 a  Maryland  corporation


                                 By:  /s/  Larry  A.  Goldstone
                                      -------------------------
                                 Larry  A.  Goldstone,  President

                                 "Manager"

                                 THORNBURG  MORTGAGE  ADVISORY  CORPORATION,
                                 a  Delaware  corporation


                                 By:  /s/  Garrett  Thornburg
                                      -----------------------
                                 Garrett  Thornburg,  Chairman

                                       50
<PAGE>
                                     ANNEX A

                       Definition of "Operating Expenses"


I.     The  term  "Operating  Expenses"  means all of the Company's ordinary and
necessary  operating expenses of every type including, but not limited to, costs
of  operating,  owning,  acquiring,  carrying,  monitoring the servicing of  and
disposing  of  the  Company's  assets, including software and costs of equipment
related thereto, and costs of organizing any subsidiary of the Company, costs of
issuing,  servicing, paying dividends or interest on, selling or reacquiring any
instrument  or  security  or  mortgage  asset (whether or not a security), costs
preparatory  to  entering  into  a  business or activity, costs of winding up or
disposing  of  a  business  or  activity, interest, points, fees, finance costs,
costs  of  maintaining  compliance  with  governmental requirements of any type,
taxes,  losses,  bad debts of any type, in each case incurred by or on behalf of
the  Company  regardless  whether  such  expenses  and costs would be treated as
current  costs  or  expenses  for  tax  purposes  or  under  generally  accepted
accounting  principles.

II.     The  term  "Operating  Expenses"  of  the  Company shall not include the
following:

  (A)  employment  expenses  of  the  Manager's  personnel  (including
Directors,  officers,  and employees of the Company who are directors, officers,
or employees of the Manager or its Affiliates), other than the expenses of those
employee  services  listed  in  Section  I  above;  and

  (B)  rent,  telephone,  utilities,  and  office  furnishings and other office
expenses  of  the  Manager  (except those relating to a separate office, if any,
maintained  by  the  Company).

                                       51
<PAGE>