8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 11, 2006

HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

(Exact name of Registrant as Specified in its Charter)

Maryland	001-13417	13-3950486
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

200 Metroplex Drive, Suite 100, Edison, New Jersey 08817

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code (732) 548-0101

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

SECTION 2 — FINANCIAL INFORMATION
	ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
	ITEM 8.01. OTHER EVENTS
SECTION 9 — FINANCIAL STATEMENTS AND EXHIBITS
	ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE
INDEX TO EXHIBITS
Ex-99.1 Press Release, dated May 11, 2006
Ex-99.2 Transcript of May 11, 2006 Earnings Call

SECTION 2 — FINANCIAL INFORMATION

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 11, 2006, the Company issued a press release announcing its financial results for the three months ended March 31, 2006. A copy of the release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this section of this Current Report on Form 8-K and in Exhibit 99.1 attached hereto, with respect to the Company’s results of operations only, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

ITEM 8.01. OTHER EVENTS

At 11:00 AM ET on Thursday, May 11, 2006, the Company held an investor conference call that was also broadcast live on the internet at www.investorcalendar.com. A copy of the transcript of the recorded live call is attached hereto as Exhibit 99.2.

SECTION 9 — FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c)	Exhibits.
99.1	Press Release, dated May 11, 2006.
99.2	Transcript of May 11, 2006 Earnings Call.

[signature on following page]

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
Date: May 15, 2006	By:	/s/ Harold F. McElraft
		Harold F. McElraft, Chief Financial Officer and Treasurer

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INDEX TO EXHIBITS

EXHIBIT NO.	DESCRIPTION
Exhibit 99.1	Press Release, dated May 11, 2006.
Exhibit 99.2	Transcript of May 11, 2006 Earnings Call

EX-99.1

Exhibit 99.1

For further information, contact:
Hanover Capital Mortgage Holdings, Inc.

.A  John Burchett, CEO, Irma Tavares, COO, or Harold McElraft, CFO
732-548-0101

HANOVER CAPITAL MORTGAGE HOLDINGS ANNOUNCES
2006 FIRST-QUARTER RESULTS AND $0.20 PER SHARE DIVIDEND; ADOPTION OF DIVIDEND
REINVESTMENT AND DIRECT STOCK PURCHASE PLAN

     Edison, New Jersey, May 11, 2006 — Hanover Capital Mortgage Holdings, Inc. (AMEX: HCM) reported a net loss for the quarter ended March 31, 2006 of $(0.7 million), or $(0.08) per share on a fully diluted basis, compared to net income of $1.4 million, or $0.16 per share on a fully diluted basis, for the same period in 2005. The Board of Directors declared a first quarter dividend of $0.20 per share on May 8, 2006 to be paid on June 2, 2006 to stockholders of record as of May 22, 2006, according to John A. Burchett, President and Chief Executive Officer.

The Company’s net loss for the three months ended March 31, 2006 was primarily attributable to the lower operating income of its REIT segment. The REIT’s decline in operating income in the first quarter of 2006 from the same period in 2005 was primarily due to a gain on sale of mortgage assets in 2005 of $2.3 million compared to a loss of $0.1 million in 2006, which resulted in a total negative change of $2.4 million or $0.28 per share. The focus on growth of the portfolio, as well as market conditions, have curtailed gain income.

Burchett commented, “The portfolio of Subordinate Mortgage Backed Securities (“MBS”) continues to grow and perform well. The carry value of $126.2 million at the end of the first quarter of 2006 represents an increase of over $19 million in carry value from the year end 2005 and an increase of $59.8 million over the balance as of March 31, 2005. We expect that this continued growth will be the basis for improved results in the remaining quarters of 2006.”

“The first quarter results of 2006 reflect the continuing transition at the Company to a position where the primary source of return is from net interest income rather than reliance on gain income. The second part of the strategy is to reduce the earnings volatility of the non-REIT operating subsidiary business segments.”

“With respect to the operating subsidiary business segments, there has been a continued reduction in expenses through staff reductions, as well as other expense reductions. In addition, the Company has engaged Stifel, Nicolaus & Company, Incorporated as its financial advisor to review strategic options for the non-REIT subsidiary, including the possible sale of the subsidiary.”

“Our investment strategy has transitioned from focusing on gains towards focusing on net interest income. As is set forth in greater detail in the table on Page 5, Summary Information for REIT Portfolio Assets, both the size and composition of our portfolio for the three months ended March 31, 2006 versus the three months ended March 31, 2005 have changed substantially, reflecting our investment strategy.”

“The first quarter dividend was set by the Board at $0.20 per share based on the projected improvement in results for the remaining quarters and our changing focus from gains to net interest income. The Board performs similar evaluations for each quarterly dividend,” Burchett concluded.

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Additionally, the Company has adopted a bank-sponsored Dividend Reinvestment Plan/Direct Stock Purchase Plan, (the “Plan”) which will take effect no later than May 31, 2006. The Plan is sponsored and administered by Computershare Trust Company, N.A. (“Computershare”). Existing registered shareholders will receive a notification letter and enrollment material from Computershare. Interested investors may participate in the Plan by going to www.computershare.com/equiserve.

HCM will host an investor conference call on Thursday, May 11, 2006 at 11:00 AM ET. The call will be broadcast on the Internet at www.investorcalendar.com. To listen to the call, please go to the Web site at least fifteen minutes prior to the call to register, download, and install any necessary audio software. For those not able to listen to the live broadcast, a replay will be available for a period of 30 days.

To access the live call by phone, dial 877-407-8035 (international callers dial 201-689-8035) several minutes before the call. A recorded replay may be heard through Monday, May 15 at 11:59 pm by dialing 877-660-6853 (international callers dial 201-612-7415) and using playback account #286 and conference ID # 201131.

Hanover Capital Mortgage Holdings, Inc. is a mortgage REIT staffed by seasoned mortgage capital markets professionals. HCM invests in mortgage-backed securities and mortgage loans and engages in non-interest income-generating activities through its subsidiary, Hanover Capital Partners 2, Ltd., which operates two separate divisions, Hanover Capital Partners and HanoverTrade. Hanover Capital Partners provides consulting and outsourcing services to the mortgage industry. HanoverTrade provides technology solutions and loan sale advisory services for the mortgage industry. For further information, visit HCM’s Web site at www.hanovercapitalholdings.com.

Certain statements in this press release may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934 as amended. HCM is including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical fact are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements, to differ materially from future results, performance or achievements. The forward-looking statements are based on HCM’s current belief, intentions and expectations. These statements are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties that are described in Item 1A of HCM’s Annual Report on Form 10-K for the year ended December 31, 2005 and in other securities filings by HCM. HCM’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and HCM undertakes no obligation to update or revise the information contained in this announcement whether as a result of new information, subsequent events or circumstances or otherwise, unless otherwise required by law.

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HANOVER CAPITAL MORTGAGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	March 31,
	2006			December 31,
	(Unaudited)			2005
Assets
Cash and cash equivalents	$	19,086		$	30,495
Accounts receivable		2,291			2,606
Accrued interest receivable		1,428			1,382
Mortgage loans
Held for sale		9,375			10,061
Collateral for CMOs		12,917			14,074
Mortgage securities ($181,001 and $188,398 pledged under Repurchase Agreements as of March 31, 2006 and December 31, 2005, respectively)
Trading		56,990			82,487
Available for sale		126,186			106,967
Held to maturity		7,399			8,034
Other subordinate security, held to maturity		2,717			2,703
Equity investments in unconsolidated affiliates		1,316			1,289
Other assets		11,489			12,089
	$	251,194		$	272,187
Liabilities
Repurchase agreements	$	140,522		$	154,268
Collateralized mortgage obligations (CMOs)		10,352			11,438
Dividends payable		—			2,124
Accounts payable, accrued expenses and other liabilities		2,812			3,498
Liability to subsidiary trusts issuing preferred and capital securities		41,239			41,239
		194,925			212,567
Contingencies		—			—
Minority interest in equity of consolidated affiliate		—			189
Stockholders’ Equity
Preferred stock: $0.01 par value, 10 million shares authorized, no shares issued and outstanding		—			—
Common stock: $0.01 par value, 90 million shares authorized, 8,412,062 and 8,496,162 shares issued and outstanding as of March 31, 2006 and December 31, 2005, respectively		84			85
Additional paid-in capital		103,519			104,231
Retained earnings (deficit)		(39,434	)		(38,737	)
Deferred stock-based compensation		—			(205	)
Accumulated other comprehensive (loss) income		(7,900	)		(5,943	)
		56,269			59,431
	$	251,194		$	272,187

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HANOVER CAPITAL MORTGAGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except per share data)
(Unaudited)

	Three Months Ended
	March 31,
	2006			2005
Revenues
Interest income	$	5,295		$	3,832
Interest expense		2,841			1,572
Net interest income before loan loss provision		2,454			2,260
Loan loss provision		—			7
Net interest income		2,454			2,253
(Loss) gain on sale of mortgage assets		(109	)		2,280
Loss on mark to market of mortgage assets		(1,201	)		(1,628	)
Gain on freestanding derivatives		646			708
Due diligence fees		2,533			2,542
Technology		915			554
Loan brokering and advisory services		105			512
Reimbursed out-of-pocket expenses		426			463
Other (loss) income		(49	)		56
Total revenues		5,720			7,740
Expenses
Personnel		2,179			2,260
Subcontractors		1,383			1,181
Legal and professional		898			920
General and administrative		438			388
Depreciation and amortization		189			281
Occupancy		146			135
Technology		379			295
Travel and entertainment		100			102
Out-of-pocket expenses reimbursed		426			463
Other		322			299
Total expenses		6,460			6,324
Operating (loss) income		(740	)		1,416
Equity in income (loss) of unconsolidated affiliates		27			(96	)
Minority interest in loss of consolidated affiliate		(5	)		—
Income (loss) before income tax benefit		(708	)		1,320
Income tax benefit		(11	)		(43	)
Net Income (Loss)	$	(697	)	$	1,363
Basic Earnings (Loss) Per Share	$	(0.08	)	$	0.16
Diluted Earnings (Loss) Per Share	$	(0.08	)	$	0.16
.

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HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
SUMMARY INFORMATION FOR REIT PORTFOLIO ASSETS
(dollars in thousands)
(Unaudited)

	Three Months Ended March 31, 2006
	Subordinate MBS			Agency MBS			Mortgage Loans
Average asset balance	$	115,339		$	65,627		$	23,523
Average CMO borrowing balance		—			—			10,876
Average balance — Repurchase Agreements		74,268			56,484			3,874
Net investment	$	41,071		$	9,143		$	8,773
Average leverage ratio		64.39	%		86.07	%		62.70	%
Effective interest income rate		13.01	%		5.15	%		6.78	%
Effective interest expense rate — CMO borrowing								5.88	%
Effective interest expense rate — Repurchase Agreements		5.84	%		4.50	%		4.85	%
Net interest spread		7.17	%		0.65	%		1.17	%
Interest income	$	3,750		$	846		$	399
Interest expense — CMO borrowing		—			—			160
Interest expense — Repurchase Agreements		1,084			637			47
Net interest income	$	2,666		$	209		$	192
Yield		25.96	%		9.14	%		8.75	%

	Three Months Ended March 31, 2005
	Subordinate MBS			Agency MBS			Mortgage Loans
Average asset balance	$	62,732		$	106,784		$	40,230
Average CMO borrowing balance		—			—			33,918
Average balance — Repurchase Agreements		37,260			94,607			1,273
Net investment	$	25,472		$	12,177		$	5,039
Average leverage ratio		59.40	%		88.60	%		87.47	%
Effective interest income rate		11.43	%		5.00	%		6.27	%
Effective interest expense rate — CMO borrowing								5.85	%
Effective interest expense rate — Repurchase Agreements		4.08	%		2.57	%		4.40	%
Net interest spread		7.35	%		2.43	%		0.48	%
Interest income	$	1,793		$	1,335		$	631
Interest expense — CMO borrowing		—			—			496
Interest expense — Repurchase Agreements		380			608			14
Net interest income	$	1,413		$	727		$	121
Yield		22.19	%		23.88	%		9.61	%

* * * * *

EX-99.2

HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
FIRST QUARTER 2006 EARNINGS
05/11/2006
11:00AM

PARTICIPANTS

John Burchett, Chief Executive Officer Irma Tavares, Chief Operating Officer Harold McElraft, Chief Financial Officer

Operator:

Greetings ladies and gentlemen and welcome to the Hanover Capital Mortgage Holdings, Inc. (“Hanover Capital Mortgage”) first quarter 2006 earning results conference call. At this time all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone key pad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. John Burchett, Chief Executive Officer of Hanover Capital Mortgage.

Thank you Mr. Burchett, you may begin.

John Burchett:

Thank you and thank everybody for joining the call this morning. I am joined here this morning by Irma Tavares, our Chief Operating Officer and Harold McElraft, our Chief Financial Officer, who will be available as well to answer questions when we finish the presentation.

In terms of this quarter, obviously we had a loss for the quarter, which is disappointing for us, but on the positive side as we view it, it is the trough in part of our transition from the earnings that have been driven by gains over the past couple of years by earnings that will be driven by net interest income, and we have made good progress in terms of our strategy to achieve that change. We did declare a dividend of 20 cents a share, which represents about a 14 percent return on our stock prices of last night’s close, and the dividend was declared, obviously with the expectation that we will have a rebound in earnings as we go forward here as a result of our strategy.

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

The biggest individual change quarter over quarter from first quarter of last year to this year again reflects what we have talked about in terms of the gain. There was about a 2.4 million dollar difference between the slight loss we had on sale this period, and that was on some of our agency securities as compared with a significant gain in first quarter of 2005. Also in the first quarter we traditionally have higher operating expenses focusing around our professional fees. As you will notice in there, they were relatively high for the quarter, and we expect those will go down to a more normal level as we go forward, and historically we have been higher in the first quarter on some of our expenses.

In our due diligence subsidiary, we had about an equal volume of business. We were not impacted by volume as much as margins, and we have taken some corrective action to improve those margins as we go forward. In addition on the subsidiaries, as we mentioned in the press release, we have hired Stifel, Nicolaus & Company to be our advisor to look at strategic alternatives, all strategic alternatives in terms of the fit of those subs with the REIT and obviously the REIT meaning we are focusing on a more steady income, and we have had some volatility clearly from our income from our subsidiaries. So as I said while the first quarter was negative, we feel there is a lot of positives and basis for going forward in terms of our drive to get net interest income. For one, a much larger portfolio of B pieces. In our press release we have included a table in the back of the press release that compares our position of a year ago in the B pieces in our other primary investment assets to the period of this first quarter, and I will read some numbers from that, that are available in the press release if people do not have it in front of them. Our net earning assets in our subordinate pieces were $41 million, average investment for the first quarter of this year as compared to $25 million a year ago, a significant increase. The yield based on the net interest income without any gains was close to 26 percent for the first quarter of this year compared with 22 percent last year. Even though our cost of funds has risen from about 4.08 percent to 5.84 percent, we have managed through repositioning somewhat of the portfolio with the credit strats of the B’s that we own and was a slightly higher leverage to maintain even a higher yield in this higher interest rate environment. So, we are confident that you know we still look to the credit risk we take as our major risk on this portfolio. The rise in interest rates has curtailed our ability, but also we have no desire at this point to do any sales to take gains, but the interest rate has increased on the short term rates does not significantly impact it and, actually as I have said, we have had a higher yield in the first quarter of this year than first quarter of last year even with rates up.

In addition we continue to grow through the quarter, as I said, we had $41 million net investment on average for the quarter, and at the end of the quarter, we had $45 million net investment in that subordinate B portfolio with still some room to grow. As of the end of the quarter, if you notice the other two categories had a total of about $18 million in net investment available in the agency and mortgage loan portfolios and part of our strategy is

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

to reduce those portfolios, which we have done, and convert that net equity in those portfolios in to our higher yield B piece portfolio. So again, good growth, good return, and the ability to grow some more based on our future investments and our future converting some of the assets to our B piece portfolio.

In addition we have continued to lower our expenses, particularly with our subsidiaries in our Hanover trade segment, we have reduced the expenses of our LSA business, effectively curtailed that business, which has not been performing. Our technology business, we have reduced expenses in there as we have talked about before to the point where our existing contracts cover our operating expenses for that business on both a cash and an operating basis so that is a positive before any corporate allocations. As I said we are going to look hard at the strategy for the alternatives for the subsidiaries. So based on, and I hope what we see in terms of reduced expenses, increased investment, we look forward to a positive impact for the remainder of the year.

In terms of the balance sheet, just looking briefly at the balance sheet, again the same points are made by looking at the balance sheet whereas our investment at the end of the quarter in our B pieces, which is listed under securities for trading, was $126 million as compared to $107 million at the end of last year. Again, a significant increase, cash is down as we have gotten our cash down from $30 million at the end of the year to $19 million, and the $19 million is going to be a figure around which, with our current balance sheet structure, we are going to keep around that amount for our liquidity needs. We tend to be run what we consider a very conservative liquidity portfolio to handle any calls on our on our financing on the repo financing that we use for our B’s so we have managed to get the cash in the position that we want it.

I think the other outstanding item on the balance sheet that stands out is the accumulated other comprehensive income for OCI at a minus $7.9 million, which has increased from year end by about 2 million dollars, and that is primarily as a result of our mark to market on our available for sale B bonds. We consider that to be in the range, but at the lower end of the range of evaluations for that portfolio, and we think that it does not fully take in to effect the deleverage aspects for that portfolio, which can be released through other financing or through eventual sale. Again, our B piece portfolio is bought at a steep discount. Our carrying value is much less than the principal amount on those, and we accrete those up over time so there will be some differences that run through the OCI, but we know that it is a temporary difference as long as our credit performance remains good and has remained good and continues to remain good, the bonds will accrete up to their value. So, it is a hit to our book value as we show it on the balance sheet and is appropriate in terms of the way we mark those by taking outside marks on them, but we believe there are values in that portfolio that can be unlocked. We did initiate a stock buy back program in the prior quarter. We bought back just over 80,000 shares, and that program continues to be in

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

effect.

So in summary, we had, as I said, a bottom line that we are not proud of, but we have restructured and repositioned our balance sheet where we can look forward to better results down the road. Our strategy still continues to be to grow our portfolio, to control our expenses, and to rationalize our investments in subsidiaries based on that volatility of the earnings in there.

That is all I had for prepared remarks. I would be glad to open up for questions at this point.

Is there an operator here to open it up?

Operator:

Thank you. Ladies and gentlemen, at this time we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone key pad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker, it may be necessary to pick up your handset before pressing the star keys.

Our first question comes from David Taylor with David Taylor B company.

David Taylor:

Thank you. Has there been much interest expressed through Stifel, Nicolaus & Company’s clients in the non-resubsidiaries.

John Burchett:

David, we are early in that process so we have not had any feedback yet on that yet, so we are early in the process in terms of evaluation and getting their materials ready to go so we have not had a direct feedback on that.

David Taylor:

Okay. I gather you do not expect to take any gains for the balance of this year. Is that is a reasonable assumption?

John Burchett:

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

That is a reasonable assumption that we would not be looking to take gains. Again our strategy is to try to build up the portfolio to the point where the net interest income takes care of our income needs and, you know, every time we take gains, that means we take more cash. It sits in cash until we get it reinvested. It is a little bit of a treadmill when you get on in that process, so we want to get off that treadmill and, you know, get the balance sheet totally repositioned, and when we get that done, we probably would have some sales for credit purchases once we get fully invested, but that would be a lot less than I think we have had in the past. So, we look to the driver of net interest income, and again if you go back to the table that I referred in the back of the press release, the net interest income on the B portfolio was $2.66 million for the first quarter of this year as compared to $1.4 million on the same portfolio a year ago. So, we are getting there, we have more to go, but we are on the right treadmill.

David Taylor:

And you expect that portfolio to be larger in the second quarter than in the first, no?

John Burchett:

Yeah, as I said, average balance for the first quarter, average balance for the net investment was 41 million, at the end of the quarter it was 45 million, and it has continued to grow since then so it entered the second quarter at a higher average balance than it had in the first quarter, and we have added to it since.

David Taylor:

Okay. Thank you.

John Burchett:

Sure. Thank you.

Operator:

Our next question comes from Steve Martin, a private investor.

Steve Martin:

Hi John.

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

John Burchett:

Hi Steve. How are you doing?

Steve Martin:

Good thanks.

John Burchett:

Good.

Steve Martin:

John, what sort of time table are you anticipating for a final resolution on the subsidiaries?

John Burchett:

My guess would be that we are probably in a two to three-month time frame to take a look at what we come back with and where we come out on the whole process.

Steve Martin:

Exactly.

John Burchett:

So I think two to three months is a reasonable time frame.

Steve Martin:

Okay, good, okay thank you.

Operator:

As a reminder if you would like to ask a question, please press star one on your telephone key pad. Mr. Burchett there are no further questions at this time.

John Burchett:

Okay. Well again, thank you everybody for joining the call. To the extent that anybody

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HANOVER CAPITAL MORTGAGE	HCM	May. 11, 2006

does have further questions, feel free to call myself or Harold. Our number is listed on the press release. If there is anything we could do to help you out, we would be glad to do that, and once again thanks for participating.

Operator:

This concludes today’s teleconference. Thank you for your participation.

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