PRESS RELEASE
Published on February 26, 1999
Exhibit 99.1
[Company Logo]
PRESS RELEASE
FOR IMMEDIATE RELEASE
February 25, 1999
CONTACT: Kathy Fern
804-217-5800
DYNEX CAPITAL, INC. UPDATES MARKET ON CERTAIN RECENT DEVELOPMENTS
Dynex Capital, Inc. (NYSE: DX) filed today an 8-K relating to recent
developments in its relationship with AutoBond Acceptance Corporation (Amex:
ABD). During January, as a result of a review conducted on its behalf by outside
consultants experienced in subprime auto lending, Dynex discovered certain
breaches by AutoBond of its representations, warranties and covenants under its
agreements with Dynex. These breaches included, among other items, AutoBond's
failure to follow required underwriting standards in accordance with the
agreements, and AutoBond's failure to give Dynex access to its loan files for
review, as provided for in the agreements.
Dynex notified senior management of AutoBond of these breaches and, as a
result of such breaches, has ceased to make additional fundings as provided for
under the governing agreements. Dynex also filed suit against AutoBond in the
Federal district court of the Eastern District of Virginia seeking declaratory
relief with respect to its rights and obligations under these agreements.
AutoBond has filed suit against Dynex in the district court of Travis County,
Texas alleging breach of contract and other claims. Dynex believes AutoBond's
claims are without merit and intends to defend against them vigorously.
On February 22, 1999, Dynex terminated its servicing arrangement with
AutoBond due to the occurrence of an event of servicing termination as provided
for in the agreements. Dynex has named a third-party servicer to assume the
servicing responsibilities. To date, AutoBond has not complied with provisions
of the servicing termination, including the failure to surrender all files in
its possession related to the servicing of the collateral.
Dynex Capital, Inc. is a financial services company that elects to be
treated as a real estate investment trust (REIT) for federal income tax
purposes. The Company's primary production operations include the origination of
mortgage loans secured by multifamily and commercial real estate properties and
the origination of loans secured by manufactured homes. Note: This document
contains "forward-looking statements"(within the meaning of the Private
Securities Litigation Act of 1995) that inherently involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of unforeseen
external factors. As discussed in the Company's filings with the SEC, these
factors may include, but are not limited to, changes in general economic
conditions, disruptions in the capital markets, fluctuations in interest rates,
increases in costs and other general competitive factors.