Morgan Stanley Cuts Mortgage Jobs

Morgan Stanley(MS Quote) shares shrugged off news that the brokerage firm was slashing 1,000 jobs from its residential mortgage lending business.

The New York-based bank said that in response to the continued deterioration of the mortgage markets, Morgan Stanley was scaling back its residential mortgage operations in the U.S. and closing its U.K. mortgage lender, Advantage Home Loans.

Morgan Stanley will continue to service mortgage loans in the U.S. through its Saxon Mortgage Services platform in Fort Worth, Texas. It will also still offer residential mortgages to its retail brokerage clients through Morgan Stanley Credit Corp.

"Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward," said Anthony Meola, COO of Morgan Stanley's U.S. residential business.

Lehman Brothers(LEH Quote) has also taken an ax to its mortgage lending subsidiaries.

Last month, the company announced an additional 1,300 layoffs, which brings Lehman's total workforce reduction in mortgage origination to 3,750 positions since last year.

Morgan Stanley shares rose 40 cents to $43.11.