1072806--3/24/2008--CAPITAL_CROSSING_PREFERRED

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Because of Capital Crossing Preferred s obligations to creditors, it may not be able to make dividend or liquidation payments to holders of the Series D preferred shares Bank regulators may limit the ability of Capital Crossing Preferred to implement its business plan and may restrict its ability to pay dividends Capital Crossing Preferred s results will be affected by factors beyond its control Capital Crossing Preferred s loans are concentrated in California and New England and adverse conditions in those markets could adversely affect its operations A substantial majority of Capital Crossing Preferred s loans were originated by other parties More than half of Capital Crossing Preferred s loan portfolio is made up of commercial mortgage loans which are generally riskier than other types of loans Capital Crossing Preferred may not be able to purchase loans at the same volumes or with the same yields as it has historically purchased Capital Crossing Preferred could be held responsible for environmental liabilities of properties it acquires through foreclosure Capital Crossing Preferred is dependent in virtually every phase of its operations on the diligence and skill of the management of Lehman Bank Capital Crossing Preferred s relationship with Lehman Bank may create conflicts of interest Servicing of Capital Crossing Preferred mortgage assets by Lehman Bank. Future dispositions by Capital Crossing Preferred of mortgage assets to Lehman Bank or its affiliates. Future modifications of the advisory agreement or master service agreement. The master loan purchase agreement was not the result of arm s-length negotiations. Neither Capital Crossing Preferred nor Lehman Bank have specific policies with respect to the purchase by Capital Crossing Preferred from Lehman Bank of particular loans or pools of loans Capital Crossing Preferred s Board of Directors has broad discretion to revise Capital Crossing Preferred s strategies Capital Crossing Preferred does not obtain third-party valuations and therefore it may pay more or receive less than fair market value for its mortgage assets Capital Crossing Preferred may pay more than fair market value for mortgages it purchases from Lehman Bank because it does not engage in arm s-length negotiations with Lehman Bank Fluctuations in interest rates could reduce Capital Crossing Preferred earnings and affect its ability to pay dividends Tax Risks Related to REITs If Capital Crossing Preferred fails to qualify as a REIT, it will be subject to federal income tax at regular corporate rates If Capital Crossing Preferred does not distribute 90% of its net taxable income, it may not qualify as a REIT

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1072806--3/24/2008--CAPITAL_CROSSING_PREFERRED_CORP