Cohen Milstein Sellers & Toll PLLC Announces Class Action Settlement Against Dynex Capital, Inc., Merit Securities Corporation, Stephen J. Benedetti, and Thomas H. Potts

The following statement is being issued by Cohen Milstein Sellers & Toll PLLC regarding the Dynex Capital Inc. settlement.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

IN RE DYNEX CAPITAL, INC., SECURITIES LITIGATION, Civ. No.:05-1897 (HB)

TO:ALL PERSONS OR ENTITIES WHO PURCHASED THE FOLLOWING MERIT SECURITIES CORPORATION COLLATERALIZED BOND SERIES 12 AND SERIES 13 BONDS (THE "MERIT BONDS") BETWEEN FEBRUARY 7, 2000 AND MAY 13, 2004, INCLUSIVE (THE "CLASS")

YOU ARE HEREBY NOTIFIED that a settlement of this Class Action against Dynex Capital, Inc., Merit Securities Corporation, Stephen J. Benedetti, and Thomas H. Potts (collectively, "Dynex") in the amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) has been proposed. A hearing will be held before the Honorable Harold Baer in the United States District Court for the Southern District of New York, in Courtroom 23B, 500 Pearl Street, New York, New York, at 10:00am on March 13, 2012, to determine (i) whether the Settlement and Plan of Allocation should be approved by the Court as fair, reasonable, adequate, and in the best interests of the Class; (ii) whether Lead Counsel's application for an award of attorneys' fees, which will not exceed one-third of the Settlement Amount, and the reimbursement of expenses, which will not exceed $750,000, should be approved; and (iii) whether the Court should approve the release of Released Claims against Dynex and any and all Dynex Released Parties, and dismiss the Action with prejudice. (Please note that capitalized terms not otherwise defined in this Summary Notice have the meanings set forth in the Parties' Amended Stipulation of Settlement, a copy of which may be obtained from Lead Counsel, whose name and contact information is set forth below.)

IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT FUND. If you have not yet received the full printed Notice of Proposed Settlement of Class Action, Motion for Attorneys' Fees and Reimbursement of Expenses and Settlement Fairness Hearing (the "Notice") and Proof of Claim and Release form ("Proof of Claim") you may obtain copies of these documents by contacting:

In re Dynex Capital, Inc. Securities Litigation
c/o The Garden City Group, Inc.
PO Box 9349
Dublin, OH 43017-4249
Telephone: 1-800-231-1815
www.gcginc.com

Para una Notificación en español, comuníquese con el Administrador a la dirección más arriba.

Inquiries, other than requests for the forms of Notice and Proof of Claim, may be made to Lead Counsel:

Joel Laitman, Esq.
Christopher Lometti, Esq.
Richard Speirs, Esq.
Kenneth Rehns, Esq.
Cohen Milstein Sellers & Toll PLLC
88 Pine Street, 14^th Floor
New York, NY 10005
Telephone: 212-838-7797
Facsimile: 212-838-7745
http://www.cohenmilstein.com/cases/234/dynex-capital

To participate in the Settlement, you must submit a Proof of Claim no later than June 4, 2012. As more fully described in the Notice, the deadline for submitting objections to the Settlement is February 29, 2012. You also have the right to exclude yourself from the class by submitting no later than February 21, 2012, a written request for exclusion from the Class in accordance with the procedures described in the more detailed notice. If the settlement is approved by the Court, you will be bound by the settlement and the Court's final order and judgment, including the releases provided for in the final order and judgment, unless you submit a request to be excluded.

Further information may also be obtained by directing your inquiry in writing to the Claims Administrator, The Garden City Group, Inc., at the address listed above. Please do not contact the Court.
BY ORDER OF THE COURT

Contacts:

Cohen Milstein Sellers & Toll PLLC
Joel P. Laitman, 212-838-7797