Morgan Stanley to Sell Mortgage Servicer

Morgan Stanley has agreed to sell Saxon Mortgage Services Inc. to Ocwen Financial Corp. in the latest example of Wall Street's retreat from the beleaguered mortgage servicing business.

Ocwen, of West Palm Beach, Fla., would pay a base price of $59.3 million plus $1.4 billion for servicing advances. Although the base price is well below the $706 million Morgan Stanley paid for Saxon in 2006, the investment bank said the sale "is not expected to have a material impact on financial results."

Morgan Stanley apparently has already taken its lumps: in the fourth quarter of 2008, it took a $700 million writedown related to businesses it owned, with most of it coming from Saxon, according to Bloomberg.

The sale of Saxon to Ocwen is expected to close in the first quarter of 2012.

This would be Ocwen's second major acquisition of a rival subprime servicer from an investment bank this year. In September Ocwen acquired Litton Loan Servicing LP from Goldman Sachs Group Inc.