Franklin Credit Announces Debt Modifications

Franklin Credit Management Corporation, 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.