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Morgan Stanley adds more sub-prime loans

MORGAN Stanley’s Saxon Mortgage is expanding its presence in sub-prime mortgages, capturing borrowers turned away by skittish lenders and taking business from rivals that abandoned the struggling market.

Saxon representatives on Thursday moved to assure brokers that Morgan Stanley is a strong backer and is giving business won from other lenders first priority, according to an e-mail obtained by Reuters.

Saxon is maintaining most loan products as other lenders nix theirs, giving it a leg-up in a market where borrowers are getting desperate to refinance.

‘We are still here now and are very willing to help you with any fallout loans you have had from previous companies. They get top billing, and we can get them moved through ASAP,’ the note said.

Saxon’s rates have increased, but mortgage offerings have ‘stayed pretty much the same’, it said.

Saxon’s strategy to get a competitive edge on the sub-prime business where losses are causing upheavals in global financial markets compares with other lenders that have sought to reduce their market share.

Maintaining sub-prime loan programmes may be helpful for customers who need to refinance at least US$335 billion (S$504 billion) in loans whose payments are set to jump this year and next, analysts said.

That would alleviate some concern that sub-prime borrowers who obtained the adjustable-rate mortgages in 2005 and last year would find loan programmes too strict – and default.

‘Every day, we’re more inundated with pre-qualifications as my competitors are falling off the face of the earth,’ said Ms Deborah Cox, a Saxon account executive. ‘We are going to be one of the last standing.’


Source: The Straits Times 11 Aug 07


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