Replies to post #6817 on Reliant Financial Service Corp. (RFNS)

[jack-n-box]

Soonergirl, I received a couple responses today from Mr. Hamilton:

Letter:

Mr. Hamilton,

I am writing to you today concerned about the status of the company. Our group owns over two million shares and, while we believe in the fundamentals of the company, we are concerned about things that have occured over the past months.

We recently stopped by the new offices located at the Woodbrige location to find noone there. A neighboring tennant claims there was one gentlemen there but had left for lunch. The office at this address does not appear to be a location that is conducting business; a roughly 500 squarefoot office with a boardroom type table, no sales staff, no cubicles with active computers, no receptionist, etc...

The 15th of the month has come and gone with no update on current business progress, insurance wrap information etc.... With the limited research that is available to us, we still believe Reliant has the right business plan, but where there is smoke we are concerned about the fire; the execution of the plan is concerning.

Any information that you or Mr. Jules Loeb could provide us would be greatly appreciated.

Response:

Mr.

I am sorry we missed your visit, if you had called we would have been more than happy to receive you and show you around, the entireity of our office. The Toronto office is our underwriting center, we also have a corporate office in Kingston Ontario as well, which accomodates our most of our executive.

While the company is operational and committed to full scale solicitation of sub-prime Canadian based mortgage applications, in recognition of the downturn in the US sub-prime residential market and the potential for developement affecting an otherwise healthy Canadian market, the Company prudently delayed processing and closing other than a few applications. As a result the Company was able to full test and tweak its system while avoiding the bestow that occured in the market and latterly to a lessor extent the Canadian one. Recent events in the Canadian Markets has given proof to our concerns and we would have been in a bad way should we not have taken the prudent steps to protect the company.

The Company operations have been impacted by adverse American mortgage market conditions. As a result, rating agencies have downgraded most sub-prime mortgage pools. The Canadian capital market has also experienced a decresed appetite for sub-prime mortgage pools. New requirements mandate large amounts of capital reserves for first loss. This level of capital was not previously required by buyers of the Company's existing pool of mortgages. The Company is working to secure a first loss pool mortgage indemnity policy within Canada. This will take longer tham anticipated as there are no insurers in Canada currently providing a policy to the sub-prime market. This inability to re-sell the mortgage pools has resulted in a continued company capital drain and affects the Company's ability to make a profit. The Company will continue working with insurance providers and potential buyers of Reliant's mortgage pools to obtain the required first loss pool requirement.

We are working hard to ensure the success of the company.

Letter:

Mr. Hamilton,



Thank you for responding. I am still holding my investment with Reliant as of today beause I believe in your business plan and believe you will be successful. I may add to current levels when I feel the stock has hit bottom.



Regarding your insurance wrap, do you have any time line for possible acquisition?



Mr. Jules Loeb, how is he going to benefit the company?



I wish to post your past response for other investors to read; I believe it would help them and future investors better understand where Reliant is at this stage and where it is headed. I will NOT post if you wish it so. Please let me know.



Sincereley,

Response:

Mr.

Thank you for your e-mail. Yes you can post my past response.

We will be forwarding information on Jules Loeb shortly.

We are currently working with a major European insurance company who has been a tremendous help and we hope to have the insurance wrap finalized in the next 60 day timeline if possible.

We are currently working on a $10 million dollar capital infusion into the company as well, which if sucessful will ensure our continued success in the future.

Regards
Steve Hamilton


Some guidance. I know noone like to hear hit, but we are back to the waiting game; at least those who are holding. Better than going bankrupt!!!