NEW YORK, NEW YORK--(MARKET WIRE)--Oct 3, 2008 -- The Board of Directors of the Hyperion Brookfield Strategic Mortgage Income Fund, Inc. (the "Fund") (HSM - News) declared a monthly dividend of $0.0725 per share, payable on October 30, 2008 to stockholders of record on October 14, 2008. The ex-dividend date is October 9, 2008. Based on the NYSE closing price of $7.25 on October 2, 2008, the Fund's yield was 12.00%. As of September 30, 2008, the Fund's average duration, as measured on a net asset basis, was 4.4 years.

Dividends may include net investment income, capital gains and/or return of capital. The dividend yield referenced above is calculated as the annualized amount of the most recent monthly dividend declared divided by the stated stock price.

 

               Portfolio of Investments as of September 30, 2008
               Sector Allocation as a Percentage of Total Assets

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Non-Agency Residential Mortgage-Backed Securities ("MBS")                31%
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Commercial MBS                                                           24%
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Agency MBS                                                               28%
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Asset-Backed Securities                                                   2%
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U.S. Treasury Securities                                                 15%
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                Credit Allocation as a Percentage of Total Assets

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U.S. Government / Agency and AAA Rated                                   67%
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AA Rated                                                                  3%
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A Rated                                                                   4%
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BBB Rated                                                                17%
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Below Investment Grade                                                    9%
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The Hyperion Brookfield Strategic Mortgage Income Fund, Inc. is managed by Hyperion Brookfield Asset Management, Inc, a registered investment advisor located in New York City. The firm was founded in 1989 to provide relative value driven fixed income investment strategies, such as core fixed income, high yield, and specialized MBS. Hyperion Brookfield manages approximately $22 billion for a client base including pension funds, financial institutions, mutual funds, insurance companies and foundations. Hyperion Brookfield is a subsidiary of Brookfield Asset Management Inc, a global asset manager focused on property, power and other infrastructure assets with approximately US$95 billion of assets under management.

     Contacts:
     The Hyperion Brookfield Strategic Mortgage Income Fund, Inc.
     Three World Financial Center
     200 Vesey Street, 10th Floor
     New York, NY 10281-1010
     1-800 HYPERION