Franklin Sees Attractive Acquisition Opportunities: 'We have not seen portfolio acquisition opportunities on such attractive terms, including both first-lien product and discounts, in many years.'.

NEW YORK -- Franklin Credit Management Corp. reported a net loss of $3.58 million in the second quarter, compared with net losses of $1.95 million in the quarter ended March 31 and $1.39 million in the second quarter of 2006. But the company's CEO says Franklin is in a position to take advantage of the market's weak appetite for subprime mortgage assets.

"The net loss in the most recent quarter included a full three months of operating expenses of the wholesale origination unit that we acquired from the New York Mortgage Co. in the latter part of February 2007, which approximated $623,000 net of tax benefits," noted Paul Colasono, chief financial officer of Franklin Credit Management Corp.

For the three months ended June 30, revenue totaled $47.1 million, compared with $42.5 million in the first quarter of and $40.4 million in the second quarter of 2006, representing increases of 10% from the prior quarter and 17% from the year-ago quarter, respectively.

Second-quarter operating results, when compared with the first quarter, benefited from an increase in net interest income of $641,000, but were impacted by a $1.3 million rise in the provision for loan losses and an increase in collection, general and administrative expenses of $1.9 million. The increased provision for loan losses resulted principally from higher reserves required due to increased defaults on certain loan pools acquired in 2005 and in the portfolio of Liberty loans, and due to a decline in real estate values on both new and existing properties acquired through foreclosure.

During the second quarter, Franklin acquired and originated a company record of $430 million in loans, including $311 million of loan acquisitions at an average purchase ...