Merrill Closing First Franklin?

CNBC has reported that Merrill Lynch plans to close its struggling San Jose, Calif.-based First Franklin wholesale mortgage unit, but a Merrill spokesman would not comment on the matter and a customer service representative at the unit said the business was operating as normal. Like many wholesalers initially reliant on subprime loans that have recently turned in very poor performance records, First Franklin has already seen massive cuts. Merrill bought First Franklin, direct-to-consumer lender NationsPoint, and a Pittsburgh-based servicing division later renamed Home Loan Services from National City Corp. for about $1.3 billion early last year. First Franklin, which has been funding little but HLS, had $47.4 billion in servicing in the fourth quarter.