First Franklin Sees B&C Loss
Franklin Credit Management Corp. says it expects a second-quarter loss of $280 million to $285 million compared to a net loss of $3.6 million for the second quarter of 2007.
The company says the loss is due to deterioration in the subprime market and in the performance of its portfolio of acquired and originated loans, including, in particular, its portfolio of acquired second-liens.
The company has filed a five-day automatic extension with regard to filing its second-quarter Form 10-Q with the Securities and Exchange Commission.
This loss reflects a higher provision for credit losses, according to Thomas E. Hoaglin, chairman, president, and chief executive officer of Huntington Bancshares Inc., located in Columbus, Ohio, which has a $1.1 billion commercial lending relationship with Franklin. "Franklin's updated evaluation of its provision and reserves is more in line with the assumptions we used and reserves established as part of our 2007 fourth-quarter restructuring of this commercial lending relationship," said Mr. Hoaglin. "The provision does not have any impact on our reported reserve level."
Franklin is in the process of evaluating the legal structure of its servicing platform as a result of the expected second-quarter loss, he said. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/