SAX Saxon Cap New

Saxon Capital, Inc. (๏ฟฝSaxon๏ฟฝ or the ๏ฟฝCompany๏ฟฝ) (NYSE: SAX), a residential mortgage lending and servicing real estate investment trust (๏ฟฝREIT๏ฟฝ), today announced that the pending merger in which Morgan Stanley Mortgage Capital Inc. (๏ฟฝMSMC๏ฟฝ) will acquire all of the outstanding shares of the Company, and the Company will become a wholly-owned subsidiary of MSMC, is expected to be completed in early December 2006. The merger agreement with MSMC provides that the Company may pay to its existing shareholders a dividend of up to 95% of estimated REIT taxable income for the period from July๏ฟฝ1, 2006 through the earlier of the effective time of the merger or December 31, 2006. The Company expects to incur a loss for REIT taxable income purposes for the period from July๏ฟฝ1, 2006 through the anticipated effective date of the merger. Accordingly, the Company does not expect to pay a final dividend. About Saxon Saxon is a residential mortgage lender and servicer that manages a portfolio of mortgage assets. Saxon purchases, securitizes, and services real property secured mortgages and elects to be treated as a REIT for federal tax purposes. The Company is headquartered in Glen Allen, Virginia and has additional primary facilities in Fort Worth, Texas and Foothill Ranch, California. Saxon๏ฟฝs mortgage loan production subsidiary, Saxon Mortgage, Inc., originates and purchases mortgage loans through indirect and direct lending channels using a network of brokers, correspondents, and its retail lending centers. As of September 30, 2006, Saxon๏ฟฝs servicing subsidiary, Saxon Mortgage Services, Inc., serviced a mortgage loan portfolio of $26.6 billion. For more information, visit www.saxonmortgage.com. Information Regarding Forward Looking Statements This press release contains forward-looking statements within the meaning of the ๏ฟฝsafe harbor๏ฟฝ provisions of the Private Securities Litigation Reform Act of 1995. Statements about the expected effects, timing and completion of the proposed transaction and all other statements in this release, other than historical facts, constitute forward-looking statements. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "would," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions which concern our strategy, plans or intentions. All forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, actual results may differ materially from what is expected. While we believe that our assumptions and expectations are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect actual results. In particular, we may not be able to complete the proposed transaction with Morgan Stanley Mortgage Capital Inc. on the terms summarized above or other acceptable terms, or at all, due to a number of factors, including the failure to obtain regulatory approvals or to satisfy other customary closing conditions. The factors described in this paragraph and other factors that may affect our business or future financial results generally are discussed in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2005, a copy of which may be obtained from us without charge. You should not place undue reliance on our forward-looking statements, which speak only as of the date of this press release. Unless legally required, we assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or otherwise. Saxon Capital, Inc. ("Saxon" or the "Company") (NYSE: SAX), a residential mortgage lending and servicing real estate investment trust ("REIT"), today announced that the pending merger in which Morgan Stanley Mortgage Capital Inc. ("MSMC") will acquire all of the outstanding shares of the Company, and the Company will become a wholly-owned subsidiary of MSMC, is expected to be completed in early December 2006. The merger agreement with MSMC provides that the Company may pay to its existing shareholders a dividend of up to 95% of estimated REIT taxable income for the period from July 1, 2006 through the earlier of the effective time of the merger or December 31, 2006. The Company expects to incur a loss for REIT taxable income purposes for the period from July 1, 2006 through the anticipated effective date of the merger. Accordingly, the Company does not expect to pay a final dividend. About Saxon Saxon is a residential mortgage lender and servicer that manages a portfolio of mortgage assets. Saxon purchases, securitizes, and services real property secured mortgages and elects to be treated as a REIT for federal tax purposes. The Company is headquartered in Glen Allen, Virginia and has additional primary facilities in Fort Worth, Texas and Foothill Ranch, California. Saxon's mortgage loan production subsidiary, Saxon Mortgage, Inc., originates and purchases mortgage loans through indirect and direct lending channels using a network of brokers, correspondents, and its retail lending centers. As of September 30, 2006, Saxon's servicing subsidiary, Saxon Mortgage Services, Inc., serviced a mortgage loan portfolio of $26.6 billion. For more information, visit www.saxonmortgage.com. Information Regarding Forward Looking Statements This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements about the expected effects, timing and completion of the proposed transaction and all other statements in this release, other than historical facts, constitute forward-looking statements. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "would," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions which concern our strategy, plans or intentions. All forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, actual results may differ materially from what is expected. While we believe that our assumptions and expectations are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect actual results. In particular, we may not be able to complete the proposed transaction with Morgan Stanley Mortgage Capital Inc. on the terms summarized above or other acceptable terms, or at all, due to a number of factors, including the failure to obtain regulatory approvals or to satisfy other customary closing conditions. The factors described in this paragraph and other factors that may affect our business or future financial results generally are discussed in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2005, a copy of which may be obtained from us without charge. You should not place undue reliance on our forward-looking statements, which speak only as of the date of this press release. Unless legally required, we assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or otherwise.