Saxon Mortgage has stopped buying business from correspondent customers.
In a move to improve efficiency, parent Morgan Stanley decided to dissolve the correspondent business of Saxon and handle this function through its conduit, Morgan Stanley confirmed to MortgageDaily.com.
Morgan Stanley has “a much larger conduit that handles that business and it didn’t make sense to keep Saxon’s much smaller correspondent business,” the parent company said, additionally noting that correspondent also played a small part in Saxon’s overall business.
Business partners were notified early last month that Saxon would stop funding loans on a correspondent basis on Aug. 1, a source familiar with the matter said.
Employees affected by the closure of the correspondent department were offered to apply for other opportunities at Saxon, the source added.
As planned when Morgan Stanley acquired the company late last year, Saxon will continue to concentrate on wholesale lending and servicing, the company confirmed.
Around the time of the acquisition, Morgan Stanley told MortgageDaily.com that its plan to reorganize Saxon and focus on wholesale and servicing would involve essentially shuttering retail operations and streamlining and consolidating servicing operations. Such effort and eliminating redundant corporate support functions resulted in approximately 170 layoffs.