SAX Saxon Cap New

Saxon Capital, Inc. ("Saxon" or the "Company") (NYSE: SAX), a residential mortgage lending and servicing real estate investment trust (REIT), today announced the tax treatment of its 2005 dividend payments. Tax Treatment Four regular common stock dividends and one special common stock dividend are reportable for shareholders for the 2005 tax year. The following table provides details for the common stock dividends that are taxable for 2005. -0- *T Long Decla- Total Return Term Dividend ration Record Payable Distri- Ordinary of Capital Type Dates Dates Dates buted Income Capital Gains ---------------------------------------------------------------------- Regular April 19, April 29, May 11, 2005 2005 2005 $0.55 $0.55 $0.00 $0.00 Regular July 19, July 29, Aug.11, 2005 2005 2005 $0.55 $0.55 $0.00 $0.00 Regular Oct. 18, Oct. 28, Nov. 10, 2005 2005 2005 $0.50 $0.50 $0.00 $0.00 Regular Dec. 20, Dec. 30, Jan.11, 2005 2005 2006 $0.50 $0.50 $0.00 $0.00 Special Dec. 20, Dec. 30, Jan.11, 2005 2005 2006 $0.14 $0.14 $0.00 $0.00 -------------------------------- TOTAL $2.24 $2.24 $0.00 $0.00 *T Excess Inclusion Income For shareholders that are tax-exempt or non-U.S corporations or residents, you may be required to report a portion of Saxon's dividend to the IRS as "Excess Inclusion Income." -- Tax-exempt shareholders will be subject to unrelated business taxable income (commonly referred to as UBTI) with respect to such excess inclusion income; -- Non-U.S. shareholders will be subject to the 30 percent U.S. federal withholding tax on this income without reduction under any otherwise applicable income tax treaty; and -- U.S. shareholders, including taxpaying entities, will not be able to offset such excess inclusion income with net operating losses. The Company expects that a portion of the 2005 dividend will include Exclusion Income, and will announce this information when it is available. Tax Disclaimer The sections entitled "Tax Treatment" and "Excess Inclusion Income" above should not be construed as tax advice and are not a substitute for careful tax planning. You should consult your own tax advisor regarding the specific federal, state, local, foreign and other tax consequences to you regarding your ownership of shares of the Company's common stock. 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 real estate investment trust (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 production subsidiary, Saxon Mortgage, Inc., originates and purchases loans through indirect and direct lending channels through a network of brokers, correspondents, and retail lending centers. As of September 30, 2005, Saxon's servicing subsidiary, Saxon Mortgage Services, Inc., serviced a mortgage loan portfolio of $26.4 billion. For more information, visit www.saxonmortgage.com. Information Regarding Forward Looking Statements Statements in this news release other than statements of historic fact, are "forward-looking statements" that are based on current expectations and assumptions. These expectations and assumptions are subject to risks and uncertainty, which could affect Saxon's future plans. Saxon's actual results and the timing and occurrence of expected events could differ materially from its plans and expectations due to a number of factors, such as (i) changes in overall economic conditions and interest rates, (ii) Saxon's ability to successfully implement its growth strategy, (iii) Saxon's ability to sustain loan origination growth at levels sufficient to absorb costs of production and operational costs, (iv) continued availability of credit facilities and access to the securitization markets or other funding sources, (v) deterioration in the credit quality of Saxon's loan portfolio, (vi) lack of access to the capital markets for additional funding, (vii) challenges in successfully expanding Saxon's servicing platform and technological capabilities, (viii) Saxon's ability to remain in compliance with federal tax requirements applicable to REITs, (ix) Saxon's ability and the ability of its subsidiaries to operate effectively within the limitations imposed on REITs by federal tax rules, (x) changes in federal income tax laws and regulations applicable to REITs, (xi) unfavorable changes in capital market conditions, (xii) future litigation developments, (xiii) competitive conditions applicable to Saxon's industry, and (xiv) changes in the applicable legal and regulatory environment. You should also be aware that all information in this news release is as of January 25, 2006. Saxon undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.