Chitwood Harley Harnes LLP's Notice of Filing Securities Class Action Against the Officers of HomeBanc Corp

Business Wire, Jan 4, 2008

ATLANTA -- Chitwood Harley Harnes LLP announced today that it has filed a class action lawsuit on behalf of all persons (the "Class") who purchased the common stock of HomeBanc Corp. (OTC US: HMBN.PK) ("HomeBanc" or the "Company") during the period from September 26, 2005 through August 3, 2007, inclusive (the "Class Period"). The defendants are Patrick S. Flood, who served as the Company's Chief Executive Officer and Chairman of the Board at all relevant times until his resignation from the Company on January 12, 2007, and Kevin D. Race, who served as the Company's Chief Executive Officer, President, Chief Operating Officer and Chief Financial Officer at all relevant times, and served as a director of the Company at all relevant times. The case is pending in the U.S. District Court for the Northern District of Georgia.

A copy of the Complaint will be available on our website, www.chitwoodlaw.com. If you have questions about this case, your rights as a class member or wish to submit your transaction information to our firm, you may contact us through our website by clicking on HomeBanc. You may also contact Meryl W. Edelstein, Esq. directly by email at medelstein@chitwoodlaw.com, or Mary Kathryn King, Esq. directly by email at kking@chitwoodlaw.com, or by calling 1-888-873-3999.

The Complaint alleges that the officers of HomeBanc - Kevin D. Race and Patrick S. Flood - violated the Securities Exchange Act of 1934. Beginning on September 26, 2005, HomeBanc sought to register 2 million shares of 10% Series A Cumulative Redeemable Preferred Stock. On February 2, 2006, HomeBanc sold these preferred shares through its underwriters, raising approximately $50 million. However, HomeBanc failed to disclose in its registration statement that it was planning to sell its adjustable rate loans for cash, and was buying lower-quality, higher-risk, residential mortgage-backed securities.

Throughout the Class Period, HomeBanc misrepresented its risk of loss due to interest rate fluctuations. HomeBanc was earning less in interest on its assets than the amount it had to pay in interest on its debts. As a result, HomeBanc had less cash available to meet its business and operating needs.

HomeBanc, however, continued to tell the public throughout the Class Period that it had sufficient current cash balances and cash flows from its operations to support its liquidity needs for at least a year or more. Even as late as May 9, 2007, HomeBanc told the public that it had enough cash "to support our liquidity requirements for the foreseeable future." Just three months later, HomeBanc's common and Series A Preferred shares were delisted from the New York Stock Exchange. On August 7, 2007, HomeBanc filed for bankruptcy.

If you purchased or acquired the securities of HomeBanc, including its common stock and 10% Series A Cumulative Redeemable Preferred Stock, between September 26, 2005 and August 3, 2007, you may move the Court no later than January 29, 2008 and request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the Court must decide that your claim is typical of the claims of other class members, and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by the decision to serve as a lead plaintiff.

Chitwood Harley Harnes LLP is a law firm that concentrates its nationwide practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation, and has been appointed lead counsel in major class actions throughout the United States in both federal and state courts.