Summary of HANOVER CAPITAL MORTGAGE HOLDINGS INC

ITEM 3.01. NOTICE OF DELISTING OR FAILURE TO SATISFY A CONTINUED LISTING RULE OR STANDARD; TRANSFER OF LISTING
On January 6, 2009, the NYSE Alternext US LLC ("Exchange") notified the Company that it had granted the Company a further extension until February 27, 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 December 31, 2008 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 February 27, 2009. 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.