Morgan Stanley has joined the growing list of investment banks making major investments in their mortgage securitization businesses by buying originators, servicers, or both.

On Wednesday the New York company said it had agreed to buy Saxon Capital, a Glen Allen, Va., real estate investment trust that originates and services mortgages, for $706 million in cash, or $14.10 a share - a 29% premium over Saxon's Tuesday closing price. The deal is expected to close this year.

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