EXHIBIT 10.3.1



                      THORNBURG MORTGAGE ASSET CORPORATION

AMENDMENT NO. 1 TO AMENDED AND RESTATED 1992 STOCK OPTION AND INCENTIVE PLAN

                                December 19, 1997

The Amended and Restated 1992 Stock Option Plan is amended,  effective  December
19, 1997, as follows:

         Sections 7(a)(ii)(1) and (2) are amended to read as follows:

(1)                                 Fixed  offering.  As of the pricing  date of
                                    any  firm  commitment   public  offering  or
                                    direct  placement of the Common Stock, or as
                                    of the  cash  purchase  investment  date for
                                    Common  Stock  being  sold  under the waiver
                                    provisions  of the  optional  cash  purchase
                                    feature    of   the    Company's    Dividend
                                    Reinvestment   and   Stock   Purchase   Plan
                                    ("DRP"),  a number of shares of Common Stock
                                    equal  to the  total  number  of  shares  of
                                    Common   Stock  sold   under  the   offering
                                    (including    shares    sold    under    the
                                    underwriter's  overallotment)  multiplied by
                                    .002; and

(2)                                 Continuous Offering. As of the last business
                                    day on which the New York Stock  Exchange is
                                    open for trading  during each fiscal quarter
                                    of the Company, a number of shares of Common
                                    Stock equal to the total number of shares of
                                    Common Stock sold by the Company during such
                                    fiscal quarter multiplied by .002, excluding
                                    (A) Options granted  pursuant to the sale of
                                    Common  Stock  during the  calendar  quarter
                                    under  subsection (1) above,  (B) any shares
                                    of Common Stock  issued under the  Company's
                                    DRP(other  than  as  referenced   under  (1)
                                    above),  or (C) shares acquired  pursuant to
                                    the  exercise of Options  granted  under the
                                    Plan.

         To record the  amendment of the Plan in the form set forth above by the
Board of Directors  effective  as of December  19, 1997,  the Company has caused
this  amendment  to the Plan to be  executed  in the name and on  behalf  of the
Company.


                                            THORNBURG MORTGAGE ASSET CORPORATION



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