Reply #43: Morgan Stanley cuts mortgage business, 1,000 jobs

[UpInArms]

http://www.reuters.com/article/bondsNews/idUSN1335823020080213

NEW YORK, Feb 13 (Reuters) - Morgan Stanley (MS.N: Quote, Profile, Research) will slash 1,000 jobs, scale back its U.S. residential mortgage operations and shut down British home lending unit Advantage Home Loans as new management takes a hard look at the continued deterioration in mortgage markets.

The cuts will effect employees that engaged in wholesale and correspondent mortgages, generating loans through brokers and other third parties. The company said the moves also mean undisclosed reductions in people who packaged these loans into bonds that could then be sold and traded.

Morgan Stanley is closing its British mortgage origination business, but will continue servicing through its Morgan Stanley Mortgage Servicing Ltd unit.

A year after investment banks first revealed that a housing slump was leading to subprime mortgage losses, the market for mortgage-backed securities remains effectively frozen. As a result Wall Street firms, which built up home lending businesses that could feed their securitization activities, have no place to sell these assets.

...more...