EXHIBIT 10.1.1

                     AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT


     THIS AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT, is entered into as of October
17,  2000,  by  and  between  THORNBURG  MORTGAGE,  INC., a Maryland corporation
(formerly known as Thornburg Mortgage Asset 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:

                                    RECITALS

     1.     The Company and the Manager have entered into a Management Agreement
dated as of July 15, 1999 (the "Management Agreement")(all capitalized terms not
defined  herein shall be as defined therein).  The Management Agreement is for a
ten  (10)  year  term  subject  to  an  annual  determination by the Independent
Directors  as  to  the  reasonableness  of the compensation paid to the Manager;

     2.     Section  21 of the Management Agreement provides that the Management
Agreement  may  be  amended  only  by  written amendment approved by the Company
including  by a majority of the Company's Independent Directors and the Manager;
and

     3.     The  Company's Board of Directors duly and unanimously approved this
Amendment No. 1 to the Management Agreement on October 17, 2000, to be effective
immediately.

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

     1.     Section  7(a)  of  the  Management Agreement shall be deleted in its
entirety  and  replaced with the following, which shall become effective for the
month  of  October  2000:

          (a)     Annual  Base Management Fee.  For services rendered under this
                  ---------------------------
Agreement,  the  Company shall pay to the Manager, 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:

               (A)     1.15%  of  the first $300 million of Average Net Invested
     Assets,  plus (B) 0.85% of the portion of Average Net Invested Assets above
     $300 million,  with the percentage  factors for each of (A) and (B) subject
     to increase  (but not  decrease) as of July of each year,  commencing  with
     July,  2001, by any published  annual  increase for such year over the same
     month in the  previous  year in the  consumer  price  index  for all  urban
     consumers,  U.S. city average (the  "Index"),  as released by the Bureau of
     Labor Statistics of the U.S. Department of Labor.

The annual base management fee shall be calculated by the Manager within fifteen
(15)  days  after  the end of 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

     2.    Annex A of the Management Agreement is hereby deleted in its entirety
and replaced  with  the  following:


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                                  ANNEX  A
                  DEFINITION  OF  "OPERATING  EXPENSES"

          I.     The  term  Operating  Expenses  means  all  of the ordinary and
     necessary  operating  expenses of the Company and of each subsidiary of the
     Company of every type  including,  but not limited to, costs of originating
     loans directly,  acquiring loans through correspondent,  bulk or other loan
     acquisition channels,  securitizing,  selling,  hedging,  owning, carrying,
     servicing and monitoring the servicing or subservicing of, and disposing of
     the Company's  portfolio of mortgage loans,  mortgage  securities and other
     assets,  including  the costs of 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 or any subsidiary regardless whether such expenses
     and costs would be treated as current costs or expenses for tax purposes or
     under generally  accepted  accounting  principles.  Such costs and expenses
     shall include all compensation  costs,  equipment and a pro rata portion of
     overhead expenses of the personnel employed by the Manager,  the Company or
     any  subsidiary to perform the  foregoing  services for the Company and its
     subsidiaries, other than as set forth in Section II below.

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

               (A)     employment  expenses  of  the Manager's personnel who are
          performing  management services for the Manager (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  equipment,
          furnishings  and other  office and  overhead  related  expenses of the
          Manager  in  connection  with  those  employees  providing  management
          services for the Manager.

     2.   The Management  Agreement,  as so amended, is in all respects ratified
          and  affirmed  on behalf  of the  Company  by its Board of  Directors,
          including a majority of its Independent Directors and on behalf of the
          Manager by its Board of Directors.

IN  WITNESS  WHEREOF,  the  parties hereto have executed this Amendment No. 1 to
Management  Agreement  as  of  the  date  first  written  above.

"Company"                              THORNBURG  MORTGAGE,  INC.
                                       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


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