Real Estate Central

ADDITIONAL INTEREST RATE SWAPS WILL REDUCE IMPACT OF FUTURE INCREASES IN
SHORT-TERM INTEREST RATES

NEW YORK, May 6 /PRNewswire-FirstCall/ — Franklin Credit Management
Corporation (Nasdaq: FCMC), a specialty consumer finance company primarily
engaged in the servicing and resolution of performing, reperforming and
nonperforming residential mortgage loans, today announced that it has
entered into interest rate swap agreements in order to hedge an additional
portion of its interest-rate-sensitive borrowings against future increases
in short-term interest rates.

Effective April 30, 2008, the Company entered into

75 million
(notional amount) of fixed-rate interest rate swaps in order to effectively
stabilize the future interest payments on a portion of its
interest-sensitive borrowings. The fixed-rate swaps are for a period of
three years, are non-amortizing, and at a fixed rate of 3.47%. These swaps
will reduce further the Company’s exposure to future increases in interest
costs on a portion of its borrowings due to increases in the 30-day London
Interbank Offered Rate (”LIBOR”). The interest rate swaps were executed
with the Company’s lead lending bank.

Under these swap agreements, the Company will make interest payments to
its lead lending bank at fixed rates and will receive interest payments
from its lead lending bank on the same notional amounts at variable rates
based on LIBOR. The Company pays interest on its interest-sensitive
borrowings based on one-month LIBOR plus applicable margins. Paul Colasono,
Chief Financial Officer of Franklin Credit Management Corporation,
commented, “with the addition of these three-year swaps, Franklin has
established a fixed rate on $1.0 billion of its borrowings with remaining
terms varying from about ten months to almost four years, with a weighted
average fixed rate on the total $1.0 billion in swaps of about 2.99%.”

About Franklin Credit Management Corporation

Franklin Credit Management Corporation (”Franklin”) is a specialty
consumer finance company primarily engaged in the servicing and resolution
of its performing, reperforming and nonperforming residential mortgage
loans. Franklin’s portfolio consists of both first -and second- lien 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 purchased these loan
portfolios at a discount to the unpaid principal balance and originated
subprime loans to individuals at 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 originated subprime loans
through its wholly-owned subsidiary, Tribeca Lending Corp. and has
generally held for investment the loans acquired and a significant portion
of the loans originated. Franklin has been actively seeking to begin
providing services for third parties, on a fee-paying basis, which are
directly related to its servicing operations and its portfolio acquisition
experience with residential mortgage loans. The Company is actively seeking
to (a) expand its servicing operations to provide similar sub-servicing and
collection services to third parties, and (b) capitalize on its experience
to provide customized, comprehensive loan analysis and in-depth end-to-end
transaction and portfolio management services to the residential mortgage
markets. Some of these services include, in addition to servicing loans for
others, performing 1-4 family residential portfolio stratification and
analysis, pricing, due diligence, closing, and collateral transfer. In
addition, the Company is seeking to broker new originated loans developed
internally from its existing portfolio or from externally developed leads.
These new business activities are subject to the consent of Franklin’s lead
lending bank, and the Company may not be successful in entering into or
implementing any of these businesses.

The Company’s executive, administrative and operations offices are
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 Capital 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, changes in
the level of growth in the finance and housing markets, such as slower or
negative home price appreciation; (ii) the Company’s relations with the
Company’s lenders and such lenders’ willingness to waive any defaults under
the Company’s agreements with such lenders; (iii) increases in the
delinquency rates of borrowers, (iv) the availability of clients holding
sub-prime borrowers for servicing by the Company on a fee paying basis;
(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;
(viii) the Company’s success in entering the business of servicing loans
for others, in which the Company has no prior experience with servicing
loans for others; and (ix) 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 otherwise 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
(201) 604-4402
pcolasono@franklincredit.com


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Source: Real Estate Newswire

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