The Hyperion Brookfield Strategic Mortgage Income Fund, Inc. Dividend Declaration

The Board of Directors of the Hyperion Brookfield Strategic Mortgage Income Fund, Inc. (the "Fund") (NYSE: HSM) declared a monthly dividend of $0.090 per share, payable on July 24, 2008 to stockholders of record on July 15, 2008. The ex-dividend date is July 11, 2008. Based on the NYSE closing price of $8.32 on July 2, 2008, the Fund's yield was 12.98%. Based on the net asset value per share of $8.71 on June 30, 2008, the Fund's yield was 12.40%. As of June 30, 2008, the portfolio's average duration, as measured on a net asset basis, was 5.1 years.

                Portfolio of Investments as of June 30, 2008
              Sector Allocation as a Percentage of Total Assets

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Non-Agency Residential Mortgage-Backed Securities ("MBS")            17.0%
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Commercial MBS                                                       26.0%
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Agency MBS Pass-throughs                                             41.2%
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Asset-Backed Securities                                               1.7%
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U.S. Treasury Securities                                             13.8%
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Other                                                                 0.3%
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             Credit Allocation as a Percentage of Total Assets

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U. S. Government / Agency and AAA Rated                              63.1%
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AA Rated                                                              5.6%
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A Rated                                                               2.9%
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BBB Rated                                                            18.5%
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Below Investment Grade                                                9.9%
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The Hyperion Brookfield Strategic Mortgage Income Fund, Inc. is managed by Hyperion Brookfield Asset Management, Inc, a registered investment advisor located in New York City. The firm was founded in 1989 to provide relative value driven fixed income investment strategies, such as core fixed income, high yield, and specialized MBS. Hyperion Brookfield manages in excess of $22 billion for a client base including pension funds, financial institutions, mutual funds, insurance companies, REITs and foundations. Hyperion Brookfield is a subsidiary of Brookfield Asset Management Inc, a global asset manager focused on property, power and other infrastructure assets with approximately US $95 billion of assets under management.