By Jonathan Stempel

NEW YORK (Reuters) - Thornburg Mortgage Inc (TMA.N: Quote, Profile, Research), which provides loans to help people buy expensive homes, said on Friday its survival is at stake because it cannot meet its own lenders' demands for $610 million of cash or collateral.

The lender said falling mortgage prices and liquidity imperiled by a surge in margin calls, "have raised substantial doubt about the company's ability to continue as a going concern."

Thornburg said the margin calls "significantly exceeded" its cash, although some lenders had frozen further calls through Friday. Margin calls force borrowers to pay back loans or post more collateral.

"It appears the state of this company rests in its lenders' hands," said Steven Marks, a managing director at Fitch Ratings in New York. "The fact lenders have frozen additional margin calls gives the company more oxygen."

Thornburg also said it will restate 2007 results and take a $427.8 million charge as of Dec. 31 for its adjustable-rate mortgage holdings. It said its auditor, KPMG LLP, concluded its 2006 and 2007 audit report should no longer be relied on.

Thornburg shares fell as much as 31.5 percent, contributing to a broader market decline as it fed concern that credit market turmoil may spread further.

A large order placed as the market was closing caused the shares to finish up 14 cents at $1.79, a New York Stock Exchange spokesman said. Thornburg shares nevertheless fell 80 percent this week.

Analysts have said Santa, Fe, New Mexico-based Thornburg might need to file for bankruptcy protection.