Franklin Credit Announces Debt Modifications

Modifications Include Origination and Success Fee Reductions, Lower Interest Rates on $475 Million of Existing Term Debt 


NEW YORK, Aug. 9  /PRNewswire-FirstCall/ -- Franklin Credit Management Corporation (NASDAQ Global Market: FCMC), a specialty consumer finance company primarily engaged in the acquisition, origination, servicing and resolution of performing, reperforming and nonperforming residential mortgage loans, today announced several modifications to its borrowing agreements.

"We are particularly pleased to announce that, unlike our existing term debt, new borrowings under our term loan agreement after June 25, 2006 will not be subject to a 50 basis point success fee upon payoff," stated Paul Colasono, Chief Financial Officer of Franklin Credit Management Corporation. "Also, the 75 basis point origination fee has been reduced to 50 basis points on all new term debt incurred to fund acquisitions of loan pools after June 25, 2006."

In addition, the Company reported that its lead lending bank has agreed to reduce the interest rate margin on approximately $475 million of existing term debt, initially by at least 25 basis points no later than October 1, 2006, and by an additional 25 basis points no later than January 1, 2007. "These interest rate margin reductions could become effective sooner, in accordance with our modification agreement with the bank, should the Federal Reserve continue to raise rates during the remainder of 2006," commented Gordon Jardin, Chief Executive Officer of Franklin Credit Management Corporation.

Additional information regarding these borrowing revisions is available in a Form 8-K filing that was submitted to the SEC on August 8, 2006.

About Franklin Credit Management Corporation

Franklin Credit Management Corporation ("Franklin") is a specialty consumer finance company primarily engaged in two related lines of business -- the acquisition, servicing and resolution of performing, reperforming and nonperforming residential mortgage loans; and the origination of non-prime mortgage loans for the Company's portfolio and for sale into the secondary market. Franklin focuses on acquiring and originating loans secured by 1-4 family residential real estate that generally fall outside the underwriting standards of Fannie Mae and Freddie Mac and involve elevated credit risk as a result of the nature or absence of income documentation, limited credit histories, higher levels of consumer debt or past credit difficulties. The Company typically purchases loan portfolios at a discount to the unpaid principal balance and originates loans with interest rates and fees calculated to provide a rate of return adjusted to reflect the elevated credit risk inherent in these types of loans. Franklin originates non-prime loans through its wholly-owned subsidiary, Tribeca Lending Corp. and generally holds for investment the loans acquired and a significant portion of the loans originated. The Company's executive offices are headquartered in New York City and its new administrative and operations office is located in Jersey City, New Jersey. Additional information on the company is available on the Internet at our website at http://www.franklincredit.com/. Franklin's common stock is listed on the NASDAQ Global Market under the symbol "FCMC".

Statements contained herein that are not historical fact may be forward- looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those projected or suggested in forward-looking statements made by the Company. These factors include, but are not limited to: (i) unanticipated changes in the U.S. economy, including changes in business conditions such as interest rates, and changes in the level of growth in the finance and housing markets; (ii) the status of the Company's relations with the Company's principal lender and such lender's willingness to extend additional credit to the Company; (iii) the availability for purchases of additional loans; (iv) the availability of sub-prime borrowers for the origination of additional loans; (vi) changes in the statutes or regulations applicable to the Company's business or in the interpretation and enforcement thereof by the relevant authorities; (vii) the status of the Company's regulatory compliance; and (viii) other risks detailed from time to time in the Company's SEC reports and filings. Additional factors that would cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company's filings with the Securities and Exchange Commission, including, but not limited to, those factors discussed under the captions "Risk Factors", "Interest Rate Risk" and "Real Estate Risk" in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q which the Company urges investors to consider. The Company undertakes no obligation to publicly release the revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events, except as other wise required by securities, and other applicable laws. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the results on any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

   Contact:  Paul Colasono, CFO
   Franklin Credit Management Corporation
   [phone]
   

DATASOURCE: Franklin Credit Management Corporation



CONTACT:  Paul Colasono, CFO of Franklin Credit Management Corporation,

[phone] or 



Web site:  http://www.franklincredit.com/ 

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