AIG STATEMENT ON ANNOUNCEMENT BY FEDERAL RESERVE BOARD OF $85 BILLION SECURED REVOLVING CREDIT FACILITY

Addresses Liquidity Issues and Policyholder Concerns

NEW YORK--Sept. 16, 2008--The Board of Directors of American International Group, Inc. (NYSE:AIG) issued the following statement in response to today's announcement by the Federal Reserve Board that the Federal Reserve Bank of New York is providing a two-year, $85 billion secured revolving credit facility to AIG that will ensure the company can meet its liquidity needs:

"The AIG Board has approved this transaction based on its determination that this is the best alternative for all of AIG's constituencies, including policyholders, customers, creditors, counterparties, employees and shareholders. AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues. We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis. We expect that the proceeds of these sales will be sufficient to repay the loan in full and enable AIG's businesses to continue as substantial participants in their respective markets. In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG.

"We commend the Federal Reserve and the Treasury Department for taking this decisive action to address AIG's liquidity needs and broader financial market concerns. We thank them for their leadership during this critical time for the global financial markets. We also thank Governor Paterson, Commissioner Dinallo, Commissioner Ario, the other state Commissioners, and the Office of Thrift Supervision for their willingness to assist AIG.

"Policyholders of AIG companies around the world can rest assured that AIG's commitments will continue to be honored."

It should be noted that the remarks made in this press release may contain projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. It is possible that AIG's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these projections and statements. Factors that could cause AIG's actual results to differ, possibly materially, from those in the specific projections and statements are discussed in Item 1A. Risk Factors of AIG's Annual Report on Form 10-K for the year ended December 31, 2007, and in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of AIG's Quarterly Report on Form 10-Q for the period ended June 30, 2008. AIG is not under any obligation (and expressly disclaims any such obligations) to update or alter its projections and other statements whether as a result of new information, future events or otherwise.

American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.

CONTACT:
American International Group, Inc.
Charlene Hamrah (Investment Community)
212-770-7074

President of C.A.R. comments on financial markets

Sept. 19, 2008

Dear C.A.R. Member:

What a week this has been for the financial markets! I’ve been following the tumultuous events on Wall Street, the 24/7 news cycle, and the actions of our Congress and the federal government. No doubt you have as well.

As you know, in recent weeks Fannie Mae and Freddie Mac were placed into conservatorship, the federal government bailed out AIG, Bank of America purchased Merrill Lynch, and Lehman Brothers filed for bankruptcy. Late this week, the credit market appeared to be on the verge of collapsing.

Like most Americans, I’m concerned about both the near-term and long-term health of our financial system and its impact on the housing market, and I’m sorting though an over-abundance of news and information trying to make sense of it all.

Although it is premature at this point in time to address specifics in an evolving plan, C.A.R. strongly supports the intent of Congress and the federal government to calm the financial markets, address liquidity issues and to begin laying the foundation of a new mortgage finance system.

To that end, I want to assure you that your state Association is closely monitoring the events in our nation’s capital. C.A.R. is taking appropriate steps to ensure that the needs of California are addressed, and to emphasize that housing is a central part of the equation in the federal government’s efforts moving forward. We’re actively engaged in ongoing dialogue with our congressional representatives and other key leaders in Washington.

To recap what’s happened -- so far -- this week:

U.S. Dept. of the Treasury Secretary Paulson today announced that Congress and the administration intend to take poorly performing assets, primarily mortgage-backed securities, off the books of financial institutions. These assets have been a prime impediment to the ability of financial institutions to lend money.

The government also prohibited the short sale of nearly 800 financial institutions for 10 days, and may extend this prohibition to 30 days.

The U.S. Dept. of the Treasury also plans to increase the amount of mortgage-backed securities bought from government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, in an effort to increase the GSEs’ role in the housing market.

The Federal Reserve and other major financial institutions worldwide also made hundreds of billions of dollars in loans available to commercial banks in an effort to improve liquidity.

Our expectation is that Congress and the administration will work together to craft legislation as early as next week addressing these critical issues. We expect to have a good sense of what the legislation will contain by this weekend, prior to financial markets opening Monday morning.

As events continue to unfold, look to C.A.R. as your one-stop source for news and information on these critical issues. Beginning Monday, you’ll receive “Market Matters Daily Briefing,” a daily e-mail that will aggressively monitor the situation and keep you informed as events play out. Your regularly scheduled “Market Matters” e-mail on Thursdays will include tools and information to help you explain and communicate to your clients. You also can check www.car.org for recent headlines and video clips, and Wednesday’s “C.A.R. Newsline” e-mail for additional information pertinent to the ongoing story. Stay tuned for more.

Sincerely,

William E. Brown
2008 President
CALIFORNIA ASSOCIATION OF REALTORS®

Congratulations! You just bought AIG!

Article contributed by Alfredo Ramirez, The Loan Source 9/17/08

If you pay taxes in the United States you now play a small part in the 79.9% share that the Federal Government has taken last night in failing insurance company AIG. After saying this weekend it would not rescue AIG, the Federal government reversed course Tuesday evening and declared the insurance giant too big to fail. The Fed has thrown AIG an $85 billion loantwo-year term at a rate of 8.5% plus LIBOR (or about 11.4% at current levels). AIG is saying they will sell off assets over the course of the next two years, and plan to pay back the loan in full plus interest. The government has the right to veto any such sales, so basically you are still a private company but Uncle Sam is watching closely. over a

The government will have authority to replace executives at will, and they have already made a move to replace the current CEO. They felt that a bankruptcy of AIG would have created too much damage to the already fragile market. Policy holders will be protected, jobs will be saved," New York Gov. David Paterson said Tuesday night.

In other news, Housing Starts for August were below estimates representing a 17 year low. I would venture to say this is probably a good thing has we don't need additional supply of new homes right now.

Mortgage bonds are all over the place today as the volatility in the stock and bond markets continue. They are currently making a positive rally due in part to the dismal stock market performance currently down 350 points as I type. Overall I think the government bail-out is good for us, but it's amazing what we are getting used to. I think this year will go down in financial history as one of the most volatile ever.

So tell me what's the good news? Well, the government has our best interest at heart of trying to shore up credit, financial, and housing markets and they seem to be willing to do whatever it takes to make that happen. We all just need to hang in there and focus on talking to people who are interested and qualified to buy or sell real estate!

On a side note, the LIBOR rates are spiking huge today. LIBOR stands for the "London Interbank Offered Rate." The rate is based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market. Because banks are now concerned about being paid back by other banks due to instability, they are increasing their rates they charge each other this morning. How this ties into us in the United States is most of the 1 year, 3 year, 5 year, 7 year, and 10 year mortgage ARMs are tied to the LIBOR index. Since 30 year fixed rates are relatively low right now, I think it makes sense for people in adjustable loans to consider switching to something fixed if they can qualify for a new loan.

Feel free to contact me with any questions. Have a good one!

Loan Officer

Alfredo F. Ramirez

The Loan Source

477 S. San Antonio Road

Los Altos, Ca 94022

Mobile: (650) 722-1094

EFax: (650) 887-0424