EDISON, N.J., Feb. 26 /PRNewswire-FirstCall/ -- Hanover Capital Mortgage Holdings, Inc. (NYSE Alternext: HCM) (the "Company" or "HCM") announced today that on February 24, 2009, the NYSE Alternext US LLC ("Exchange") notified the Company that it had granted the Company a further extension until June 30, 2009 to regain compliance with the continued listing standards of Section 1003(a)(iv) of the Exchange Company Guide. Previously, on April 8, 2008, the Company received notice from the Exchange Staff indicating that the Company was below certain of the Exchange's continued listing standards. Specifically, the notice provided that the Company was not in compliance with (1) Section 1003(a)(i) of the Exchange Company Guide due to stockholders' equity of less than $2,000,000 and losses from continuing operations and net losses in two out of its three most recent fiscal years, and (2) Section 1003(a)(iv) of the Exchange Company Guide in that the Company had sustained losses which were so substantial in relation to overall operations or its existing financial resources, or its financial condition had become so impaired, that it appeared questionable, in the opinion of the Exchange, as to whether the Company would be able to continue operations and/or meet its obligations as they mature. The Company had previously been granted an extension until February 27, 2009 to regain compliance with the continued listing standards of Section 1003(a)(iv) of the Exchange Company Guide and until October 8, 2009 to regain compliance with the continued listing standards of Section 1003(a)(i) of the Exchange Company Guide. Based on available information including the Company's plan to regain compliance (the "Plan"), as well as conversations between Exchange Staff and representatives of HCM, the Exchange has determined that, in accordance with Section 1009 of the Company Guide, the Company made a reasonable demonstration of its ability to regain compliance with Section 1003(a)(iv) of the Company Guide by the end of the revised Plan period, which the Exchange has now determined to be no later than June 30, 2009. HCM's Registration Statement on Form S-4, including the proxy statement/prospectus filed with the Securities and Exchange Commission relating to the planned merger of Walter Investment Management LLC, a wholly-owned subsidiary of Walter Industries, Inc. and HCM, was declared effective on February 18, 2009 by the Securities and Exchange Commission. In connection with the planned merger, HCM has established a record date of February 17, 2009, and will hold a special meeting of shareholders on April 15, 2009 to approve the merger and certain other transactions described in the proxy statement/prospectus. Pending approval by HCM's shareholders and the satisfaction of certain other conditions, the merger is expected to be completed in the second quarter 2009. No vote of Walter Industries shareholders is required. The Company will be subject to periodic review by Exchange Staff during the extension period. Failure to make progress consistent with the Plan and to achieve certain milestones, or to regain compliance with the continued listing standards by the end of the extension period could result in the Company's common stock being delisted from the Exchange. Hanover Capital Mortgage Holdings, Inc. is a mortgage REIT staffed by seasoned mortgage capital markets professionals. HCM invests in prime mortgage loans and mortgage securities backed by prime mortgage loans. For further information, visit HCM's Web site at http://www.hanovercapitalholdings.com/. Additional Information and Where to Find It In connection with the proposed spin-off of the Financing business of Walter Industries, Inc. through its wholly-owned subsidiary, Walter Investment Management LLC, and the proposed merger of Walter Investment Management LLC with Hanover Capital Mortgage Holdings, Inc. and certain related transactions, Hanover Capital Mortgage Holdings, Inc. filed a registration statement with the SEC on Form S-4, as amended, containing a proxy statement/prospectus (Registration No. 333-155091), and Hanover Capital Mortgage Holdings, Inc. will be filing other documents regarding the proposed transaction with the SEC as well. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FINAL PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectus is being mailed to stockholders of Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc. Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about Hanover Capital Mortgage Holdings, Inc. and Walter Industries, Inc., without charge, at the SEC's Internet site (http://www.sec.gov/). Copies of the proxy statement/prospectus and the other filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, at Hanover Capital Mortgage Holdings, Inc.'s Web site (http://www.hanovercapitalholdings.com/). Walter Industries and Hanover and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed merger and related transactions. Information regarding Walter Industries' directors and executive officers is available in Walter Industries' proxy statement for its 2008 annual meeting of stockholders and Walter Industries' 2007 Annual Report on Form 10-K, which were filed with the SEC on March 19, 2008, and March 7, 2008, respectively, and information regarding Hanover's directors and executive officers is available in Hanover's proxy statement for its 2008 annual meeting of stockholders and Hanover's 2007 Annual Report on Form 10-K, which were filed with the SEC on April 24, 2008, and April 2, 2008, respectively. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in Hanover's proxy statement/prospectus and other materials referred to in Hanover's proxy statement/prospectus. Safe Harbor Statement Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including expressions such as "believe," "anticipate," "expect," "estimate," "intend," "may," "will," and similar expressions involve known and unknown risks, uncertainties, and other factors that may cause Walter Industries' or Hanover's actual results in future periods to differ materially from the expectations expressed or implied by such forward-looking statements. These factors include, among others, the following: the market demand for Walter Industries' and Hanover's products as well as changes in costs and the availability of raw material, labor, equipment and transportation; changes in weather and geologic conditions; changes in extraction costs, pricing and assumptions and projections concerning reserves in Walter Industries' mining operations; changes in customer orders; pricing actions by Walter Industries' and Hanover's competitors, customers, suppliers and contractors; changes in governmental policies and laws; further changes in the mortgage-backed capital markets; changes in general economic conditions; and the successful implementation and anticipated timing of any strategic actions and objectives that may be pursued, including the announced separation of the Financing business from Walter Industries. In particular, the separation of Walter Industries' Financing business is subject to a number of closing conditions which may be outside of Walter Industries' control. Forward-looking statements made by Walter Industries in this release, or elsewhere, speak only as of the date on which the statements were made. Any forward-looking statements should be considered in context with the various disclosures made by Walter Industries and Hanover about our respective businesses, including the Risk Factors described in Walter Industries' 2007 Annual Report on Form 10-K, the Risk Factors described in Hanover's 2007 Annual Report on Form 10-K, and each of Walter Industries' and Hanover's other filings with the Securities and Exchange Commission. Neither Walter Industries nor Hanover undertakes any obligation to update its forward-looking statements as of any future date. DATASOURCE: Hanover Capital Mortgage Holdings, Inc. CONTACT: John Burchett, CEO, or Irma Tavares, COO, or Harold McElraft, CFO, all of Hanover Capital Mortgage Holdings, Inc., +1-732-593-1044 Web Site: http://www.hanovercapitalholdings.com/

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