FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES



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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2004
[]Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
       For the transition period from ________ to ___________ Act of 1934


                         Commission file number 0-17771


                     FRANKLIN CREDIT MANAGEMENT CORPORATION
             (Exact name of Registrant as specified in its charter)


                                    Delaware
         (State or other jurisdiction of incorporation or organization)

                                   75-2243266
                      (I.R.S. Employer identification No.)

                               Six Harrison Street
                            New York, New York 10013
                                 (212) 925-8745
                    (Address of principal executive offices)



     Indicate by check mark  whether the registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities  Exchange  Act of
1934  during  the  preceding  12 months (or for such  shorter  period  that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .

Indicate  by check mark  whether  the  registrant is an  accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes_____ No_X___.

As of November 15, 2004 the issuer had 5,916,527 of shares of Common Stock, par
value $0.01 per share, outstanding.

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<PAGE>


                     FRANKLIN CREDIT MANAGEMENT CORPORATION

                                    FORM 10-Q

                                      INDEX

                                 C O N T E N T S


PART I. FINANCIAL INFORMATION                                            Page

Item 1. Financial Statements (unaudited)

  Consolidated Balance Sheets at September 30, 2004
  and December 31, 2003                                                    3

  Consolidated Statements of Income for the three and
  nine months ended September 30, 2004 and September
  30, 2003                                                                 4

  Consolidated Statement of changes in Stockholders' Equity
  for the nine months ended September 30, 2004                             5

  Consolidated Statements of Cash Flows for the nine months
  ended September 30, 2004 and September 30, 2003                          6

  Notes to Consolidated Financial Statements                             7-13

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                             14-23

Item 3. Quantitative and Qualitative Disclosure about
        Market Risk                                                     24-25

Item 4. Controls and Procedures                                            25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                 25

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds                                                           25

Item 3. Defaults Upon Senior Securities                                   25

Item 4. Submission of Matters to a Vote of Security Holders               25

Item 5. Other Information                                                 25

Item 6. Exhibits and Reports on Form 8-K                                  26

SIGNATURES                                                                27

CERTIFICATIONS
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS (Unaudited)
-------------------------------------------------------------------------------
ASSETS                              September 30, 2004     December 31, 2003

<S>                                     <C>                   <C>          <C>
CASH AND CASH EQUIVALENTS                 $ 22,533,835   $  14,418,876 35

RESTRICTED CASH                                113,457            413,443

NOTES RECEIVABLE:
 Principal                                 796,079,203        465,553,870
 Purchase discount                         (38,809,394)       (25,678,165)
 Allowance for loan losses                 (84,031,931)       (46,247,230)
                                          -------------      --------------
     Net notes receivable                  673,237,878        393,628,475

ORIGINATED LOANS HELD FOR SALE              34,861,339         27,372,779

ORIGINATED LOANS HELD FOR INVESTMENT        43,212,524          9,536,669

ACCRUED INTEREST RECEIVABLE                  7,764,609          4,332,419

OTHER REAL ESTATE OWNED                     16,684,155         13,981,665

OTHER RECEIVABLES                            4,664,500          2,893,735

MARKETABLE SECURITIES                          256,697            202,071

DEFERRED TAX ASSET                             614,166            681,398

OTHER ASSETS                                 4,440,257          3,720,163

BUILDING, FURNITURE AND EQUIPMENT - Net      1,341,133          1,252,711

DEFERRED FINANCING COSTS- Net                7,033,597          4,298,942
                                         -------------      --------------
TOTAL ASSETS                             $ 816,758,147      $ 476,733,346
                                         =============      ==============
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Accounts payable and accrued expenses    $ 7,088,629        $ 4,979,806
  Financing agreements                      35,180,332         23,315,301
  Notes payable                            747,154,565        427,447,844
  Income tax liability:
     Current                                    61,011
     Deferred                                1,402,204          1,311,089
                                          ------------       -------------
           TOTAL LIABILITIES               790,886,741        457,054,040
                                          ------------       -------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Common stock, $.01 par value,
 10,000,000 authorized shares; issued
 and outstanding: 5,916,527                     59,167              59,167
 Additional paid-in capital                  6,985,968           6,985,968
 Retained earnings                          18,826,271          12,634,171
                                         -------------        -------------
           TOTAL STOCKHOLDERS' EQUITY       25,871,406          19,679,306
                                         -------------        -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                      $816,758,147        $476,733,346
                                         =============        ============

See notes to consolidated financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
-------------------------------------------------------------------------------

<S>                            <C>          <C>          <C>          <C>
                                   Three Months             Nine Months
                                  Ended Sept 30,            Ended Sept 30,
                                2004         2003          2004        2003
                             ----------   -----------  -----------  -----------
REVENUES:

 Interest income             $16,628,125  $10,438,099  $38,618,733  $31,721,768

 Purchase discount earned      2,969,825    1,385,753    6,039,002    3,366,675
 Gain on sale of notes
 receivable                      229,840       36,991    1,074,742      633,105
 Gain on sale of originated
 loans held for sale           1,026,372      895,774    3,171,801    2,302,819
 Loss/gain on sale of other
 real estate owned              (145,846)     174,651      227,551      927,845
 Rental income                     9,725       29,874       33,675      103,674
 Prepayments and other income  1,247,416    1,096,582    3,646,884     2,899,019
                              ----------   ----------   ----------   -----------
                              21,965,457   14,057,724   52,812,388   41,954,905
                              ----------   ----------   ----------   ----------

OPERATING EXPENSES:
 Interest expense              9,939,303    5,489,147   20,733,508   16,102,017
 Collection, general and
 administrative                5,974,354    4,476,633   16,167,756   12,995,727
 Provision for loan losses       728,504      783,854    2,436,763    2,368,299
 Amortization of deferred
 financing costs                 584,916      516,483    1,738,043    1,356,875
 Depreciation                    118,590      120,283      368,214      327,742
                              ----------   ----------   ----------   ----------
                              17,345,667   11,386,400   41,444,284   33,150,660
                              ----------   ----------   ----------   ----------


INCOME BEFORE PROVISION
FOR INCOME TAXES               4,619,790    2,671,324   11,368,104    8,804,245
                              ----------   ----------   ----------   ----------
PROVISION FOR INCOME TAXES     2,102,004    1,215,900    5,176,004    4,072,200
                              ----------   ----------   ----------   ----------

NET INCOME                    $2,517,786   $1,455,424   $6,192,100   $4,732,045
                              ==========   ==========   ==========   ==========

NET INCOME PER COMMON SHARE:
  Basic                       $     0.43   $     0.25   $     1.05   $     0.80

  Diluted                     $     0.37   $     0.22   $     0.92   $     0.73

                              ==========   ==========   ==========   ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING BASIC       5,916,527    5,916,527    5,916,527    5,916,527
                              ==========   ==========   ==========   ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING DILUTED     6,815,141    6,573,879    6,749,544    6,506,560
                              ==========   ==========   ==========   ==========

</TABLE>

See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>



CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2004 (Unaudited)
-------------------------------------------------------------------------------

                                             Additional
                        Common Stock          Paid-In     Retained
                      ---------------
                       Shares      Amount    Capital    Earnings    Total
-------------------------------------------------------------------------------
<S>     <C>            <C>        <C>      <C>         <C>         <C>
January 1, 2004        5,916,527  $59,167  $6,985,968  $12,634,171 $19,679,306

  Net income                                             6,192,100   6,192,100
                       --------------------------------------------------------
                       --------------------------------------------------------
September 30, 2004     5,916,527   $59,167  $6,985,968 $18,826,271  $25,871,406
                       ========================================================
                       ========================================================


See notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
-------------------------------------------------------------------------------
<S>                                               <C>                  <C>
                                                 Nine Months Ended Sept 30,
                                                      2004            2003

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                        $ 6,192,100      $ 4,732,045
Adjustments to reconcile net income to
net cash used in operating activities:
Gain on sale of notes receivable                   (1,074,742)        (633,105)
Gain on sale of other real estate owned              (227,551)        (927,845)
Gain on sale of originated loans held for sale     (3,171,801)      (2,302,819)
Depreciation                                          368,214          327,742
Amortization of deferred financing costs            1,738,043        1,356,875
Origination of loans held for sale               (130,834,004)     (67,934,759)
Proceeds from the sale of and principal
collections on loans held for sale                 86,497,788       62,244,362
Purchase discount earned                           (6,039,002)      (3,366,675)
Provision for loan losses                           2,436,763        2,368,299
Changes in operating assets and liabilities:
Accrued interest receivable                        (3,432,190)         191,868
Other receivables                                  (1,770,765)      (1,526,879)
Deferred income tax asset                              67,232          (91,390)
Other assets                                         (774,720)        (876,162)
Current income tax liability                           61,011
Deferred income tax liability                          91,115         (349,497)
Accounts payable and accrued expenses               2,108,823          478,702
                                                  ------------      -----------
   Net cash used in operating activities          (47,763,686)      (6,309,238)
                                                  ------------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Decrease in restricted cash                          299,986          170,937
 Purchase of notes receivable                    (438,971,026)    (163,332,881)
 Principal collections on notes receivable
 and loans held for investment                    143,954,741      109,716,685
 Acquisition and loan fees                         (4,223,652)      (1,887,363)
 Proceeds from sale of other real estate owned     15,077,792       11,345,657
 Proceeds from sale of notes receivable             8,625,688        4,280,676
 Purchase of building, furniture and equipment       (456,636)        (592,062)
                                                 -------------     ------------
   Net cash used in investing activities         (275,693,107)     (40,298,351)
                                                 -------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                      494,919,071       173,789,284
 Principal payments of notes payable             (175,212,350)     (133,573,437)
 Proceeds from financing agreements               134,886,080        72,218,917
 Principal payments of financing agreements      (123,021,049)      (67,722,555)
                                                 ------------       ----------
   Net cash provided by financing activities      331,571,752        44,712,209
                                                 ------------        ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS.            8,114,959        (1,895,380)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     14,418,876        10,576,610
                                                 ------------       -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD         $ 22,533,835       $ 8,681,230
                                                 ============       ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments for interest                       $ 19,210,233      $ 14,902,010
                                                 ============      ============
Cash payments for taxes                           $ 4,739,000       $ 4,742,329
                                                 ============      ============
</TABLE>

See notes to consolidated financial statements

<PAGE>


FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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1. ORGANIZATION AND BUSINESS

Nature of  Business  -  Franklin  Credit  Management Corporation  ("FCMC",  and
together with its  wholly-owned  subsidiaries,  the  "Company")  is a specialty
consumer finance  and  asset  management   company  primarily  engaged  in  the
acquisition, origination, servicing and resolution of performing, sub-performing
and non-performing  residential  mortgage loans and residential real estate. The
Company acquires these mortgages from a variety of mortgage bankers,  banks, and
other specialty finance companies.  These loans are generally purchased in pools
at discounts  from their  aggregate  contractual  balances,  from sellers in the
financial services industry. Real estate is acquired in foreclosure or otherwise
and is usually  acquired at a discount  relative to the  appraised  value of the
asset.  The Company  conducts its business from its executive and main office in
New York City and through its website www.franklincredit.com.

The  Company's  wholly-owned  subsidiary,  Tribeca  Lending  Corp. ("Tribeca"),
originates primarily residential mortgage loans made to individuals whose credit
histories,  income and other  factors  cause them to be  classified as sub-prime
non-conforming   borrowers.   Management  believes  that  lower  credit  quality
borrowers  present an opportunity  for the Company to earn superior  returns for
the risks assumed.  The majority of first and second mortgages are originated on
a retail and wholesale basis through marketing efforts,  utilization of the FCMC
database and the Internet.  Tribeca anticipates holding certain of its mortgages
in its portfolio when it believes that the return from holding the mortgage,  on
a  risk-adjusted  basis,  outweighs  the return from selling the mortgage in the
secondary market.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying  consolidated  financial statements are
unaudited.  In the opinion of management,  all  adjustments  (which include only
normal  recurring   adjustments)  necessary  to  present  fairly  the  financial
position,  results  of  operations  and  cash  flows  have  been  made.  Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been condensed or omitted.  These condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and notes thereto  included in the Company's
annual report on Form 10-K for the year ended  December 31, 2003. The results of
operations  for the  interim  periods  are  not  necessarily  indicative  of the
operating results for the full year.

Principles of Consolidation - The consolidated  financial statements include the
accounts of the  Company  and its  wholly-owned  subsidiaries.  All  significant
intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ from those estimates.
The most  significant  estimates of the Company are  allowances for loan losses.
The  Company's  estimates  and  assumptions   primarily  arise  from  risks  and
uncertainties  associated  with interest rate  volatility  and credit  exposure.
Although   management  is  not  currently   aware  of  any  factors  that  would
significantly  change its estimates  and  assumptions  in the near term,  future
changes in market  trends and  conditions  may occur which  could  cause  actual
results to differ materially.

Reclassification-  Certain 2003 amounts have been  reclassified  to conform with
the 2004 presentation.

Operating Segments- Statement of Financial Accounting Standards ("SFAS") No. 131
Disclosures  about  Segments of an Enterprise and Related  Information  requires
companies to report financial and descriptive information about their reportable
operating  segments,  including segment profit or loss, certain specific revenue
and expense items, and segment assets. The Company is currently operating in two
business segments: (i) portfolio asset acquisition; and (ii) mortgage banking.

Earnings  per share-  Basic  earnings  per share is  calculated  by dividing net
income by the weighted  average  number of shares  outstanding  during the year.
Diluted  earnings per share is calculated by dividing net income by the weighted
average number of shares outstanding,  including the dilutive effect, if any, of
stock options outstanding, calculated under the treasury stock method.


<PAGE>

Cash  and  Cash  Equivalents  - Cash  and  cash  equivalents  includes  cash and
short-term  investments  with original  maturities of three months or less, with
the exception of restricted cash. The Company maintains accounts at banks, which
at times may exceed  federally  insured limits.  The Company has not experienced
any losses from such concentrations.

Notes  Receivable  and  Income  Recognition  - The  notes  receivable  portfolio
consists  primarily of secured  residential real estate mortgage loans purchased
from  financial  institutions,  and mortgage and finance  companies.  Such notes
receivable  are  performing,  nonperforming  or  underperforming  at the time of
purchase and are usually  purchased  at a discount  from the  principal  balance
remaining.  Notes  receivable  are  stated at the  amount  of unpaid  principal,
reduced  by  purchase  discount  and  allowance  for loan  losses.  The  Company
periodically  evaluates the collectability of both interest and principal of its
notes  receivable to determine  whether they are impaired.  A note receivable is
considered  impaired  when it is probable  the Company will be unable to collect
all contractual principal and interest payments due in accordance with the terms
of the note  agreement.  The  Company  has the  ability and intent to hold these
notes until  maturity,  payoff or  liquidation of collateral or may sell certain
notes, if it is economically advantageous to do so. An allowance for loan losses
on impaired notes  receivable is recorded based on the present value of expected
future cash flows  discounted  at the note's  effective  interest  rate or, as a
practical  expedient,  at the observable  market price of the note receivable or
the fair value of the collateral if the note is collateral dependent.

In general,  interest on the notes receivable is calculated based on contractual
interest rates applied to daily  balances of the  collectible  principal  amount
outstanding  using the accrual method.  Accrual of interest on notes receivable,
including impaired notes receivable,  is discontinued when management  believes,
after considering economic and business conditions and collection efforts,  that
the  borrowers'  financial  condition  is such that  collection  of  interest is
doubtful. When interest accrual is discontinued,  all unpaid accrued interest is
reversed.  Subsequent recognition of income occurs only to the extent payment is
received  subject  to  management's  assessment  of  the  collectability  of the
remaining  interest and principal.  A non-accrual note is restored to an accrual
status  when it is no longer  delinquent  and  collectability  of  interest  and
principal is no longer in doubt.  Accordingly  any  allowance  for loan losses
is reversed and past due interest is recognized at that time.

Loan purchase discounts are amortized into income using the interest method over
the period to maturity.  The interest method  recognizes  income by applying the
effective  yield on the net  investment in the loans to the projected cash flows
of the loans.  Discounts are amortized if the projected payments are probable of
collection and the timing of such  collections are reasonably  predictable.  The
projection of cash flows for purposes of amortizing  purchase loan discount is a
material estimate,  which could change significantly,  in the near term. Changes
in the  projected  payments  are  accounted  for as a change in estimate and the
periodic  amortization is prospectively  adjusted over the remaining life of the
loans.

In the event  projected  payments do not exceed the carrying  value of the loan,
the periodic amortization is suspended and either the loan is written down or an
allowance for uncollectibility is recognized.

Allowance for Loan Losses - The allowance for loan losses,  a material  estimate
which could change  significantly in the near term, is initially  established by
an allocation of the purchase loan discount based on management's  assessment of
the  portion of  purchase  discount  that  represents  uncollectable  principal.
Subsequently,  increases to the allowance are made through additional allocation
from  purchase  discount if  available.  If there is not discount available, the
provision for loan loss is charged to expense.

The allowance is maintained at a level that management considers adequate to
absorb probable losses in the loan portfolio. Management's judgment in
determining  the  adequacy  of the  allowance  is  based  on the  evaluation  of
individual   loans  within  the   portfolios,   the  known  and  inherent   risk
characteristics  and size of the note  receivable  portfolio,  the assessment of
current  economic and real estate  market  conditions,  estimates of the current
value of underlying  collateral,  past loan loss  experience  and other relevant
factors.  Impaired notes  receivable are charged  against the allowance for loan
losses  when  management  believes  that the  collectability  of  principal  and
interest is not probable, based on a note-by-note review. In connection with the
determination of the allowance for loan losses,  management obtains  independent
appraisals for the underlying collateral when considered necessary.

The Company's notes  receivable are  collateralized  by residential  real estate
located  throughout the United States with  concentrations  in  California,  New
York, Georgia, and Florida.  Accordingly,  the collateral value of a substantial
portion of the Company's real estate notes  receivable and real estate  acquired
through  foreclosure is  susceptible to changes in market  conditions in certain
specific  markets.  Management  believes  that the  allowance for loan losses is
adequate.  While  management uses available  information to recognize  losses on
notes  receivable,  future  additions  to the  allowance or  write-downs  may be
necessary based on changes in economic  conditions.  An allowance of $84,031,931
and $46,247,230 is included in notes  receivable at September 30, 2004 unaudited
and December 31, 2003, respectively.


<PAGE>

Originated  Loans Held for Sale - The loans held for sale  consist  primarily of
residential  loans originated by the Company  collateralized by first and second
mortgages  where the Company  intends to sell the loan  within six months.  Such
loans held for sale are  performing  and are carried at lower of cost or market.
The gain or loss on sale is recorded  as the  difference  between  the  carrying
amount of the loan and the  proceeds  from  sale on a  loan-by-loan  basis.  The
Company records a sale when the title transfers to the seller.

Originated  Loans  Held  for  Investment  -  Such  loans  consist  primarily  of
residential  loans originated by the Company  collateralized by first and second
mortgages  originated  by the  Company  where the  Company  has the  intent  and
financial ability to hold the loans to maturity.  Such loans held for investment
are performing and are carried at amortized cost.

Other  Real  Estate  Owned  - Other  real  estate  owned  ("OREO") consists  of
properties acquired through, or in lieu of, foreclosure or other proceedings and
are held for sale and carried at the lower of cost or fair value less  estimated
costs to sell. Any write-down to fair value, less estimated cost to sell, at the
time of acquisition is charged to purchase discount.  Subsequent write-downs are
charged to operations based upon management's  continuing assessment of the fair
value of the underlying collateral. Property is evaluated periodically to ensure
that the  recorded  amount is  supported  by current  fair values and  valuation
allowances are recorded as necessary to reduce the carrying amount to fair value
less estimated cost to sell. Revenue and expenses from the operation of OREO and
changes in the  valuation  allowance  are included in  operations.  Direct costs
relating to the  development  and  improvement of the property are  capitalized,
subject to the limit of fair value of the  collateral,  while  costs  related to
holding the property are expensed. OREO is not depreciated.  Gains or losses are
included in operations upon disposal.

Building,  Furniture  and  Equipment  - Building,  furniture  and  equipment  is
recorded at cost net of accumulated depreciation. Depreciation is computed using
the  straight-line  method over the estimated useful lives of the assets,  which
range from 3 to 40 years. Maintenance and repairs are expensed as incurred.

Deferred Financing Costs - Costs incurred in connection with obtaining financing
are deferred and are amortized over the term of the related loan.

Retirement  Plan  - The  Company  has a  defined  contribution  retirement  plan
covering  all  full-time  employees  who have  completed  one month of  service.
Contributions  to the plan are made in the form of payroll  deductions  based on
employees' pretax wages.  Currently,  the Company offers a matching contribution
of 50% of the first 3% of the employees' contribution.

Income Taxes - Income taxes are accounted for under SFAS No. 109, Accounting for
Income Taxes which  requires an asset and liability  approach in accounting  for
income taxes. This method provides for deferred income tax assets or liabilities
based on the  temporary  difference  between  the income tax basis of assets and
liabilities and their carrying amount in the consolidated  financial statements.
Deferred  tax  assets and  liabilities  are  measured  using  enacted  tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences  are expected to be  recovered  or settled.  Deferred tax assets are
reduced by a valuation  allowance  when  management  determines  that it is more
likely than not that some  portion or all of the deferred tax assets will not be
realized.  Deferred tax assets and  liabilities  are adjusted for the effects of
changes in tax laws and rates on the date of the enactment.

Fair Value of Financial Instruments - SFAS No. 107, Disclosures About Fair Value
of Financial  Instruments,  requires  disclosure  of fair value  information  of
financial  instruments,  whether or not  recognized in the balance  sheets,  for
which it is  practicable  to estimate  that value.  In cases where quoted market
prices are not available, fair values are based on estimates using present value
or other valuation  techniques.  Those techniques are significantly  affected by
the assumptions  used,  including the discount rate and estimates of future cash
flows. In that regard,  the derived fair value estimates cannot be substantiated
by comparison to independent  markets and, in many cases,  could not be realized
in immediate  settlement of the instruments.  Statement No. 107 excludes certain
financial  instruments and all  non-financial  assets and  liabilities  from its
disclosure  requirements.  Accordingly,  the aggregate fair value amounts do not
represent the underlying value of the Company.



<PAGE>

The following methods and assumptions were used by the Company in estimating the
fair value of its financial instruments:

a. Cash, Restricted Cash, Accrued Interest Receivables, Other Receivable and
   Accrued Interest Payable - The carrying values reported in the consolidated
   balance sheets are a reasonable estimate of fair value.

b. Notes Receivable - Fair value of the net note receivable portfolio is
   estimated by discounting the future cash flows using the interest method. The
   estimated fair value of notes receivable at September 30, 2004 unaudited and
   December 31, 2003 was $673,237,878 and $393,628,475, respectively.

c. Short-Term Borrowings - The interest rates on financing agreements and other
   short-term borrowings are reset on a monthly basis and therefore, the
   carrying amounts of these liabilities approximate their fair value.

d. Long-Term Debt - The interest is at a variable rate that resets monthly,
   therefore the amount reported in the balance sheet approximates fair value.


Comprehensive  Income - SFAS No. 130,  Reporting  Comprehensive  Income  defines
comprehensive  income as the change in equity of a business  enterprise during a
period from  transactions  and other events and  circumstances,  excluding those
resulting from investments by and distributions to stockholders. The Company had
no items of other  comprehensive  income during the nine months ended  September
30,  2004 and  September  30,  2003;  therefore,  net income was  equivalent  to
comprehensive income.

Accounting for Stock  options- The incentive  stock option plan is accounted for
under the recognition and measurement  principles of Accounting Principles Board
Opinion   25,   Accounting   for  Stock   Issued  to   Employees   and   related
interpretations.  No stock-based employee  compensation cost is reflected in net
income for stock options,  because all options  granted under these plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant.

Had  compensation  cost been determined upon the fair value of the stock options
at the grant date  consistent  with the  method of SFAS  No.123,  the  Company's
unaudited  September 30, 2004 and September 30, 2003 net income and earnings per
share would have been  reduced to the pro forma  amounts  indicated in the table
that follows.



<PAGE>
<TABLE>
<CAPTION>

                                             2004               2003

<S>                                      <C>                     <C>
Net income  - as reported                $ 2,517,786         $ 1,455,424
Net income  -  pro forma                 $ 2,510,661         $ 1,438,758
Net income  per common share
  - basic - as reported                       $ 0.43             $ 0.25
Net income per common share
  - basic - pro forma                         $ 0.42             $ 0.24
Net income per common share
  - diluted - as reported                     $ 0.37             $ 0.22
Net income per common share
  - diluted - pro forma                       $ 0.37             $ 0.22

</TABLE>

<TABLE>
<CAPTION>
                                              2004                2003

<S>                                       <C>                 <C>
Net income  - as reported                 $ 6,192,100         $ 4,732,045
Net income  -  pro forma                  $ 6,170,725         $ 4,682,046
Net income  per common share
  - basic - as reported                        $ 1.05              $ 0.80
Net income per common share
  - basic - pro forma                          $ 1.04              $ 0.79
Net income per common share
  - diluted - as reported                      $ 0.91              $ 0.73
Net income per common share
  - diluted - pro forma                        $ 0.91              $ 0.72


</TABLE>


There were no options granted during the three or nine months ended September
30, 2004.

Recent Accounting Pronouncements

In January of 2003, the Financial  Accounting  Standards  Board ("FASB")  issued
Interpretation No. 46,  Consolidation of Variable Interest  Entities,  which was
revised in December of 2003 by FIN 46(R).~  This  Interpretation  clarifies  the
application of existing  accounting  pronouncements to certain entities in which
equity  investors do not have the  characteristics  of a  controlling  financial
interest or do not have sufficient  equity at risk for the entity to finance its
activities  without  additional   subordinated   financial  support  from  other
parties.~The  adoption of Interpretation  No. 46(R) had no impact on the
Company's consolidated financial statements.





<PAGE>

3. BUSINESS SEGMENTS

The  Company  has  two  reportable  operating  segments:   (i)  portfolio  asset
acquisition  and  resolution;  and (ii) mortgage  banking.  The portfolio  asset
acquisition  and  resolution   segment   acquires   performing,   nonperforming,
nonconforming  and  subperforming  notes  receivable and  promissory  notes from
financial  institutions,  mortgage  and  finance  companies,  and  services  and
collects  such notes  receivable  through  enforcement  of terms of the original
note, modification of original note terms and, if necessary,  liquidation of the
underlying  collateral.  The  mortgage-banking  segment  originates  residential
mortgage loans from individuals whose credit histories, income and other factors
cause them to be classified as sub-prime nonconforming borrowers.

The  Company's  management  evaluates the  performance  of each segment based on
profit or loss from operations before unusual and extraordinary items and income
taxes.  The accounting  policies of the segments are the same as those described
in the summary of significant accounting policies.

<TABLE>
<CAPTION>
                                           Three Months Ended September 30,
                                               2004               2003
                                           Unaudited
<S>                                            <C>                    <C>
CONSOLIDATED REVENUE
 Portfolio asset acquisition
 and resolution                            $ 18,607,190        $ 12,067,078
 Mortgage banking                             3,358,267           1,990,646
 Consolidated Revenue                      $ 21,965,457        $ 14,057,724

CONSOLIDATED INCOME BEFORE INCOME TAXES
 Portfolio asset acquisition
 and resolution                             $ 3,517,400         $ 2,236,779
 Mortgage banking                             1,102,390             434,545
 Consolidated  Income before income taxes   $ 4,619,790         $ 2,671,324

</TABLE>
<TABLE>
<CAPTION>

                                               Nine Months Ended Sept 30,
                                                 2004              2003
                                               Unaudited
<S>                                             <C>                <C>
CONSOLIDATED REVENUE
 Portfolio asset acquisition
 and resolution                              $ 44,361,474       $ 36,621,059
 Mortgage banking                               8,450,914          5,333,846
 Consolidated Revenue                        $ 52,812,388       $ 41,954,905

CONSOLIDATED  INCOME BEFORE INCOME TAXES
 Portfolio asset acquisition
 and resolution                               $ 9,239,730        $ 7,768,991
 Mortgage banking                               2,128,374          1,035,254
 Consolidated  Income before income taxes    $ 11,368,104        $ 8,804,245


</TABLE>
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

General

Forward-Looking Statements.  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,  and changes in the level of
growth in the finance and housing markets;  (ii) the status of relations between
the Company and a bank as its "Senior Debt Lender" and the Senior Debt  Lender's
willingness to extend additional  credit to the Company;  (iii) the availability
for  purchase of  additional  loans;  (iv) the status of  relations  between the
Company and its sources for loan purchases;  (v)  unanticipated  difficulties in
collections  under  loans  in the  Company's  portfolio;  and (vi)  other  risks
detailed from time to time in the Company's SEC reports. 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  caption  "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  other  wise  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
thereof. 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.

Overview

The  Company's  net income for the nine  months  ending  September  30, 2004 was
$6,192,100  compared to $4,732,045 for the same period last year. This increased
income was facilitated by increased  interest,  purchase discount and prepayment
penalty income due to the growth in size of the  portfolio.  The nine months was
further  bolstered  by  gains  on the  sale  of  originated  loans  due to a new
marketing campaign. This increase in income was partially offset by increases in
the costs of funds during the third quarter due to increases in federal interest
rates.  The Company's  cost of funds was 5.33% at September 30, 2004 as compared
to 4.77% at September 30, 2003.

Critical Accounting Policies. The following management's discussion and analysis
of  financial  condition  and  results  of  operations  is based on the  amounts
reported in the Company's  consolidated  financial statements.  In preparing the
consolidated  financial  statements in  conformity  with  accounting  principles
generally  accepted  in the United  States of America  ("GAAP"),  management  is
required to make estimates and assumptions that affect the financial  statements
and disclosures. These estimates require management's most difficult, complex or
subjective  judgments.  The Company's critical accounting policies are described
in its Form  10-K for the year  ended  December  31,  2003.  There  have been no
significant changes in the Company's critical accounting policies since December
31, 2003.


<PAGE>

Acquisition Activity. Acquisitions were funded through incurrence of senior debt
in the  amount  equal to the  purchase  price  plus a loan origination  fee
generally  equal to 1%.  Included in the  purchases  during the  quarter,  was a
single  purchase of a mixed pool of $32  million in face  amount of  performing,
sub-performing  and  nonperforming   mortgage  loans  secured  by  single-family
residences,  from Master Financial. The following table sets forth the number of
loans,  unpaid  principal  balance at  acquisition,  purchase price and purchase
price  percentage  of the  Company's  loan  acquisitions  during  the  three and
nine-month periods ended September 30, 2004 and 2003:
<TABLE>
<CAPTION>

                                                Three Months ended September 30,

                                                   2004                 2003

<S>                                               <C>                    <C>
Number of Loans                                   4,239                  756
Unpaid Principal Balance at Acquisition   $ 120,605,382         $ 58,054,127
Purchase Price                             $ 87,266,354         $ 50,641,202
Purchase Price Percentage                           72%                  87%

</TABLE>


<TABLE>
<CAPTION>
                                               Nine months ended September 30,

                                                    2004                 2003


<S>                                               <C>                   <C>
Number of Loans                                   13,786                2,608
Unpaid Principal Balance at Acquisition    $ 536,662,897        $ 173,426,098
Purchase Price                             $ 438,971,026        $ 150,086,133
Purchase Price Percentage                            82%                  87%

</TABLE>

Residential Lending. Since commencing operations in 1997, Tribeca has originated
approximately  $378 million in loans.  The following table sets forth the number
of loans and original aggregate principal balance of loans originated during the
three and nine-month periods ended September 30, 2004 and September 30, 2003:

<TABLE>
<CAPTION>
                                               Three months ended September 30,
                                                    2004              2003



<S>                                                  <C>               <C>
Number of Loans                                      288               153
Original Principal Balance                  $ 50,655,663      $ 25,727,618

</TABLE>
<TABLE>
<CAPTION>

                                                Nine months ended September 30,
                                                     2004              2003


<S>                                                   <C>               <C>
Number of Loans                                       804               405
Original Principal Balance                  $ 130,834,004      $ 67,934,759
</TABLE>





<PAGE>

During the nine months ended September 30, 2004, Tribeca had income before taxes
of $2,128,374 as compared to $1,035,254  during the nine months ended  September
30,  2003.  This  increase in income  reflected  the  increased  volume of loans
originated and sold during the nine months ending  September 30, 2004 due to the
expansion of offices in New York and New Jersey and a new marketing campaign.

As of September 30, 2004, Tribeca had approximately $35 million face value of
loans  held for sale and $43 million  held for investment.

Cost of Funds.  As of September 30, 2004,  the Company owed an aggregate of $747
million ("Senior Debt") to a bank (the "Senior Debt Lender"), which was incurred
in  connection  with the  purchase  of, and is secured  by, the  Company's  loan
portfolios and Other Real Estate Owned ("OREO") portfolios. The Company's Senior
Debt  incurred  after March 1, 2001,  accrues  interest at the Federal Home Loan
Bank of Cincinnati  ("FHLB") thirty-day advance rate (the "Index") plus a spread
of 3.50% (the "Spread").  Senior Debt  incurred  before  March 1, 2001  accrues
interest at prime rate plus a margin of between 0% and 1.75%.  At September  30,
2004, approximately $24 million of the Senior Debt incurred before March 1, 2001
remained outstanding and will continue to accrue interest at the prime rate plus
a margin of between 0% and 1.75%.  At September 30, 2004,  the weighted  average
interest rate on Senior Debt was 5.33%.

Inflation.  The  impact of  inflation  on the  Company's  operations  during the
periods presented was immaterial.




<PAGE>

Results of Operations

Three Months Ended September 30, 2004 Compared to Three Months Ended September
30, 2003.

     Total revenue,  which is comprised of interest  income,  purchase  discount
earned, gains on bulk sale of notes receivable, gain on sale of loans receivable
originated,  gain on sale of OREO, rental income and other income,  increased by
$7,907,733 or 56%, to  $21,965,457  during the three months ended  September 30,
2004, from $14,057,724 during the three months ended September 30, 2003.

     Interest  income  increased by $6,190,026 or 59% to $16,628,125  during the
three months ended September 30, 2004 from  $10,438,099  during the three months
ended  September  30,  2003.  The Company  recognizes  interest  income on notes
included in its portfolio  based upon three factors:  (i) interest on performing
notes, (ii) interest received with settlement  payments on non-performing  notes
and (iii) the balance of settlements  in excess of the carried face value.  This
increase  resulted  primarily from notes acquired by the Company between October
31, 2003 and September  30, 2004 and included a single  purchase of $310 million
in notes  from  Bank One on June 30,  2004,  these  acquisitions  have been only
partially offset by prepayments, collections and loan sales.

     Purchase  discount  earned  increased by  $1,584,072 or 114%, to $2,969,825
during the three months ended  September 30, 2004,  from  $1,385,753  during the
three months ended  September 30, 2003.  This  increase  reflected the growth in
size of the  portfolio  and an increase in  prepayments  during the three months
ended  September  30, 2004 as compared to the three months ended  September  30,
2003.

     Gain on sale of notes receivable  increased by $192,849 or 521% to $229,840
during the three months ended  September 30, 2004 from $36,991  during the three
months ended September 30, 2003. The Company sold $2 million of performing loans
during the three  months ended  September  30, 2004 as compared to $2 million of
non-performing loans during the three months ended September 30, 2003.

     Gain on sale of loans originated by Tribeca increased by $130,598 or 15% to
$1,026,372  during the three months ended  September  30,  2004,  from  $895,774
during the three months ended  September 30, 2003.  This increase is based on an
increase in the volume of loans sold during the three months ended September 30,
2004,  compared to the three months ended  September 30, 2003.  The Company sold
$26 million of loans originated during the three months ended September 30, 2004
as compared to $21 million during the three months ended September 30, 2003.

     Gain on sale of OREO decreased by $320,497 or 184% to $(145,846) during the
three  months ended  September  30, 2004 from  $174,651  during the three months
ended September 30, 2003. The Company sold 62 and 54 OREO properties  during the
three months ended September 30, 2004 and September 30, 2003, respectively. This
decrease  and the corresponding loss in the three months ended September 30th,
2004 reflects a small percentage of the overall sales of OREO during the
quarter.

     Prepayment  penalties  and other  income  increased  by $150,834 or 14%, to
$1,247,416  during the three months  ended  September  30, 2004 from  $1,096,582
during the three months ended September 30, 2003. The increase was due primarily
to increases in prepayment  penalties and late charges resulting  primarily from
the  growth  in the size of the  portfolio  and  increased  loan  fees due to an
increase in origination volume.

     Total  operating  expenses  increased by $5,959,267  or 52% to  $17,345,667
during the three months ended  September  30, 2004 from  $11,386,400  during the
three months  ended  September  30,  2003.  Total  operating  expenses  includes
interest expense,  collection,  general and administrative expenses,  provisions
for loan  losses,  amortization  of deferred  financing  costs and  depreciation
expense.

     Interest expense  increased by $4,450,156 or 81%, to $9,939,303  during the
three months ended September 30, 2004,  from $5,489,147  during the three months
ended September 30, 2003. This increase  resulted  primarily from an increase in
debt measured on the last day of the two periods and was further  increased by a
5.24%  increase in costs of funds due to federal  rate  increases.  The weighted
average  cost of funds  was  5.02%  and 4.77%  during  the  three  months  ended
September 30, 2004 and September 30, 2003, respectively. Total debt increased by
$331,571,752 or 74% to $782,334,897 as of September 30, 2004,  from $450,763,145
as of September  30, 2003.  Total debt consists  principally  of Senior Debt and
financing agreements.

     Collection,  general and  administrative ("CG&A") expenses  increased by
$1,497,721 or 33% to $5,974,354 during the three months ended September 30, 2004
from $4,476,633  during the three months ended  September 30, 2003.  Collection,
general and administrative  expense consists primarily of personnel expense, and
all  other  collection  expenses  including  OREO  related  expense,  litigation
expense, and miscellaneous collection expense.

     Within CG&A,  personnel expenses increased by $643,645 or 28% to $2,910,369
during the three  months ended  September  30, 2004 from  $2,266,724  during the
three months ended  September  30, 2003.  This  increase  resulted  largely from
increases  in staffing  due to the growth in the  portfolio,  management  salary
increases and increased  commissions  due to increased  loan  originations.  All
other CG&A expenses  increased by $854,076 or 39% to $3,063,985 during the three
months ended  September 30, 2004 from  $2,209,909  during the three months ended
September 30, 2003. This increase resulted primarily from increased professional
expense due to staff recruiting  fees, legal expenses  relating to foreclosures,
increased office expense due to the growth in size of the portfolio.

     Provisions  for loan losses  decreased by $55,350 or 7% to $728,504  during
the three months ended  September 30, 2004 from $783,854 during the three months
ended  September 30, 2003. This decrease  resulted  primarily from a decrease in
write-offs  during the three month ended  September  30, 2004 as compared to the
three months ended September 30, 2003.

     Amortization  of deferred  financing  costs  increased by $68,433 or 13% to
$584,916  during the three months ended September 30, 2004, from $516,483 during
the three months ended September 30, 2003. This increase resulted primarily from
a reduction in the  weighted  average  life of the notes  portfolio  based on an
increase in  collections  primarily a result of  prepayments  and an increase in
deferred financing costs as a result of a commensurate increase in notes payable
due to the growth in size of the notes portfolio.


     During  the three  months  ended  September  30,  2004 the  Company  made a
provision for income taxes of  $2,102,004  as compared to $1,215,900  during the
three months ended  September  30, 2003.  The  effective  tax rate for the three
months ended September 30, 2004 and September 30, 2003 was 46%.


     The Company's net income  increased by $1,062,362 or 73% to $2,517,786 from
$1,455,424 primarily for the reasons set forth above.


Nine Months Ended September 30, 2004 Compared to Nine Months Ended September
30, 2003.

     Total revenue  increased by $10,857,483  or 26%, to $52,812,388 during the
nine months ended  September 30, 2004, from  $41,954,905 during the nine months
ended September 30, 2003.

     Interest income  increased by $6,896,965 or 22%, to $38,618,733  during the
nine months ended  September  30, 2004 from  $31,721,768  during the nine months
ended  September  30,  2003.  The Company  recognizes  interest  income on notes
included in its portfolio  based upon three factors:  (i) interest on performing
notes, (ii) interest received with settlement  payments on non-performing  notes
and (iii) the balance of settlements  in excess of the carried face value.  This
increase  resulted  primarily from notes acquired by the Company between July 1,
2003 and September 30, 2004,  and included a single  purchase of $310,000,000 in
notes  from  Bank One on June  30,  2004  which  has been  partially  offset  by
prepayments, collections and loan sales.

     Purchase  discount  earned  increased by  $2,672,327  or 79%, to $6,039,002
during the nine months ended September 30, 2004 from $3,366,675  during the nine
months ended  September  30, 2003.  This  increase  reflected an increase in the
growth of the portfolio and  prepayments  during the nine months ended September
30, 2004 as compared to the nine months ended September 30, 2003.

     Gain on sale of notes receivable increased by $441,637 or 70% to $1,074,742
during the nine months ended  September 30, 2004 from  $633,105  during the nine
months ended  September 30, 2003. The Company sold $8,400,000 bulk sale of low
yielding  performing  loans  during the nine  months  ended  September  30, 2004
compared to a $6,000,000 bulk sale of performing and nonperforming  loans during
the nine months ended September 30, 2003.

     Gain on sale of loans originated by Tribeca increased by $868,982 or 38% to
$3,171,801  during the nine months  ended  September  30,  2004 from  $2,302,819
during the nine months ended  September  30, 2003.  This  increase  reflected an
increase  in both the  volume and  margin  received  at point of sale on Tribeca
loans sold during the nine months ended  September  30, 2004, as compared to the
nine months  ended  September  30,  2003.  The Company sold $77,000,000 in loans
during the nine months  ended  September  30, 2004 as compared to $59,000,000 in
loans during the nine months ended 2003.

     Gain on sale of OREO  decreased  by $700,294 or 75% to $227,551  during the
nine months ended  September 30, 2004 from $927,845 during the nine months ended
September  30,  2003.  Gain on sale of OREO  decreased  due to the sale of lower
valued  OREO  properties  during the nine  months  ended  September  30, 2004 as
compared  to the nine months  ended  September  30,  2003 during  which time the
company sold several appreciated rental properties. The Company sold 219 and 164
OREO  properties  during the nine months ended  September 30, 2004 and September
30, 2003, respectively.

     Prepayment  penalties  and other  income  increased  by $747,865 or 26%, to
$3,646,884  during the nine months  ended  September  30,  2004 from  $2,899,019
during the nine months ended  September 30, 2003. The increase was due primarily
to increases in prepayment  penalties resulting from an increase in prepayments,
late charges  resulting  primarily  from the growth in the size of the portfolio
and increased loan fees due to an increase in origination volume.

     Total  operating  expenses  increased by $8,293,624 or 25%, to  $41,444,284
during the nine months ended  September 30, 2004, from  $33,150,660,  during the
nine months ended September 30, 2003.


<PAGE>

     Interest expense increased by $4,631,491 or 29%, to $20,733,508  during the
nine months ended  September  30, 2004 from  $16,102,017  during the nine months
ended September 30, 2003. This increase  resulted  primarily from an increase in
the average amount of debt  outstanding and further  increased by an increase in
costs of funds.  The  weighted  average cost of funds was 5.02% and 4.77% during
the nine months ended September 30, 2004 and September 30, 2003.

     "CG&A" expenses  increased by $3,172,029 or 24%, to $16,167,756  during the
nine months ended  September  30, 2004 from $ 12,995,727  during the nine months
ended September 30, 2003.

     Within  CG&A,  personnel  expenses  increased  by  $1,503,774  or  23%,  to
$8,120,992  during the nine months  ended  September  30,  2004 from  $6,617,218
during the nine months ended September 30, 2003. This increase  resulted largely
from  the  $481,250  settlement  paid to the  Company's  former  CEO,  increased
commissions due to increased loan  production,  additions to legal and servicing
staff and  management  salary  increases.  All other CG&A expenses  increased by
$1,668,255 or 26%, to $8,046,764 during the nine months ended September 30, 2004
from  $6,378,509  during the nine months ended September 30, 2003. This increase
resulted  primarily from increased  advertising  expense for Tribeca,  increased
professional expenses due to recruiting and audit fees.

     Provisions for loan losses increased by $68,464 or 3% to $2,436,763  during
the nine months ended September 30, 2004 from $2,368,299  during the nine months
ended  September  30, 2003.  This  increase  resulted  primarily  from  slightly
increased write-offs during the nine months ended September 30, 2004 as compared
to the nine months ended September 30, 2003.

     Amortization  of deferred  financing costs increased by $381,168 or 28%, to
$1,738,043  during the nine months ended  September  30, 2004,  from  $1,356,875
during  the nine  months  ended  September  30,  2003.  This  increase  resulted
primarily from a reduction in the weighted  average life of the notes  portfolio
based on an increase in  collections  primarily a result of  prepayments  and an
increase in deferred  financing costs as a result of a commensurate  increase in
notes payable due to the growth in size of the notes portfolio.

     During  the  nine  months  ended  September  30,  2004 the  Company  made a
provision for income taxes of  $5,176,004  as compared to $4,072,200  during the
nine months ended  September  30,  2003.  The  effective  tax rate for the three
months ended September 30, 2004 and September 30, 2003 was 46%.

     The Company's net income  increased by $1,460,055 or 31% to $6,192,100 from
$4,732,045 primarily for the reasons set forth above.

<PAGE>


Financial Condition

Notes  Receivable  Portfolio-  As of September  30, 2004,  the  Company's  notes
receivable  portfolio  included  approximately  20,268  loans with an  aggregate
principal of $796  million.  An allowance for loan losses of  approximately $84
million has been recorded  against this principal  amount.  The following  table
provides a breakdown of the  portfolio as of September 30, 2004 and December 31,
2003 respectively:

<TABLE>
<CAPTION>
                                      September 30, 2004     December 31, 2003

<S>                                      <C>                   <C>
Performing loans                         $ 443,061,189         $ 322,345,537
Allowance for loan losses                   19,847,201            15,584,769
Total performing loans                   -------------         -------------
Net of allowance for loan losses         $ 423,213,988         $ 306,760,768
                                         -------------         -------------

Impaired loans                           $ 291,203,063         $ 126,341,722
Allowance for loan losses                   47,970,727            30,111,278
Total impaired loans,                    -------------         -------------
Net of allowance for loan losses         $ 243,232,336          $ 96,230,444
                                         -------------          ------------

Not recorded onto servicing system       $  61,814,951          $ 16,866,611
Allowance for loan losses                   16,214,002               551,183
Not recorded onto servicing system       -------------          ------------
Net of allowance for loan losses         $  45,600,949          $ 16,315,428
                                         -------------          ------------
Notes receivable, net of allowance for
loan losses                              $ 712,047,272         $ 419,306,640
                                         =============         =============
</TABLE>


The  following  table  provides a  breakdown  of the  balance  of the  Company's
portfolio of notes  receivable by coupon type,  net of allowance for loan losses
and excluding  loans  purchased  but not recorded  onto the Company's  servicing
system as of  September  30,  2004 and  December  31,  2003 of  $61,814,951  and
$16,866,611, respectively:

<TABLE>
<CAPTION>
                                       September 30, 2004    December 31, 2003
Performing Loans
<S>                                       <C>                  <C>
Fixed Rate Performing Loans               $ 293,314,699        $ 199,691,299
                                          -------------        -------------
Adjustable Rate Performing Loans          $ 129,899,289        $ 107,069,469
                                          -------------        -------------
Total Performing Loans                    $ 423,213,988        $ 306,760,768
                                          =============        =============
Impaired Loans
Fixed Rate Impaired Loans                 $ 207,375,844        $  58,752,534
                                          -------------        -------------
Adjustable Rate Impaired Loans            $  35,856,492        $  37,477,910
                                          -------------        -------------
Total Impaired Loans                      $ 243,232,336        $  96,230,444
                                          =============        =============
</TABLE>
The increase in the amount of the impaired loans reflects the acquisition of
portfolios from Bank One and Master Financial at significant discounts realtive
to thier face value.  These portfolios included loans in bankruptcy and
foreclosure that are classified as impaired.  Some of these impaired loans are
making payments even though they are contractually delinquent.  These loans were
primarily fixed rate loans.
<PAGE>
Liquidity and Capital Resources

General- During the nine months ended September 30, 2004, the Company  purchased
13,786  loans with an  aggregate  face  amount of $537  million at an  aggregate
purchase price of $439 million or 82% of the face amount. During the nine months
ended  September 30, 2003, the Company  purchased  2,622 loans with an aggregate
face amount of $188  million at an aggregate  purchase  price of $163 million or
87% of the face amount.  This increase  reflected  primarily the  acquisition on
June  30,  2004 of a  single  mixed  pool  of $310  million  in face  amount  of
performing,  sub-performing and non-performing mortgage loans, secured by single
family residences, from Bank One, N.A., a national banking association.

The Company's  portfolio of notes  receivable at September 30, 2004,  had a face
amount of $796 million and included net notes receivable of  approximately  $673
million.  Net notes  receivable  are stated at the  amount of unpaid  principal,
reduced by purchase discount and allowance for loan losses.  The Company has the
ability and intent to hold its notes until  maturity,  payoff or  liquidation of
collateral or may sell certain notes, if it is  economically  advantageous to do
so.

In the ordinary course of its business, the Company accelerates its foreclosures
of  real  estate  securing  non-performing  notes  receivable  included  in  its
portfolio.  As a result of such  foreclosures  and selective direct purchases of
OREO,  at  September  30, 2004 and  December  31,  2003,  the Company  held OREO
recorded  in the  consolidated  financial  statements  at $17  million  and  $14
million, respectively. OREO is recorded on the consolidated financial statements
of the Company at the lower of cost or fair market value less estimated costs of
disposal.  The Company  believes that the OREO  inventory  held at September 30,
2004 has a net  realizable  value (market value less estimated  commissions  and
legal expenses  associated with the  disposition of the asset) of  approximately
$18 million  based on market  analyses  of the  individual  properties  less the
estimated closing costs.

Cash Flow From Operating and Investing Activities

     During the nine months ended  September 30, 2004,  the Company used cash in
the  amount  of $48  million  in its  operating  activities  primarily  for  the
origination of mortgage loans,  interest expense,  overhead,  litigation expense
incidental to its  collections  and for the  foreclosure and improvement of OREO
which uses were partially offset by proceeds from the sale of originated  loans.
The  Company  used  $276  million  of cash in its  investing  activities,  which
reflected primarily the use of $439 million for the purchase of notes receivable
offset by  principal  collections  of its notes  receivable  of $144 million and
proceeds  from sales of notes  receivable of $7 million and OREO of $15 million.
Net cash provided by financing  activities was $332 million primarily from a net
increase  in Senior  Debt of $320  million  and a net $12  million  increase  in
financing agreements. The above activities resulted in a net increase in cash at
September 30, 2004 over December 31, 2003 of $8 million.

     Substantially  all of  the  assets  of  the  Company  are  invested  in its
portfolios of notes  receivable and OREO.  Primary sources of the Company's cash
flow for operating and investing activities are borrowings under its Senior Debt
facilities,  collections on notes  receivable and gain on sale of notes and OREO
properties.

     At September 30, 2004, the Company had unrestricted  cash, cash equivalents
and marketable securities of $23 million.


Cash Flow From Financing Activities

Senior  Debt.  As of September  30, 2004,  the Company owed an aggregate of $747
million to the Lender of Senior Debt, under several loans.

     The Senior Debt is  collateralized  by first liens on the  respective  loan
portfolios  for the purchase of which the debt was incurred and is guaranteed by
the Company.  The monthly payments on the Senior Debt have been, and the Company
intends for such  payments to  continue to be, met by the  collections  from the
respective  loan  portfolios.  The loan  agreements for the Senior Debt call for
minimum  interest and  principal  payments each month and  accelerated  payments
based upon the collection of the notes  receivable  securing the debt during the
preceding month.




<PAGE>

     On October 13, 2004, the Company  entered into a Master Credit and Security
Agreement (the "Agreement") with Sky Bank, an Ohio banking corporation  ("Bank")
and each  subsidiary of the Company,  which is or from time to time may become a
party thereto (each, a "Company  Subsidiary"  collectively with the Company, the
"Borrowers").  The  Agreement  amends and restates  into a single  agreement the
Borrowers'  previous  loan  agreements  with the Bank,  under which an aggregate
principal  balance of  approximately  $747,000,000  was outstanding  immediately
prior to the execution of the Agreement.

     The Bank has the right to participate  out its loans (or portions  thereof)
to the  Borrowers  without  the  consent  of the  Borrowers;  and the  Bank  has
participated  a portion  of the  Borrowers'  outstanding  indebtedness  to other
financial institutions.  The Agreement provides for additional loans to be made,
subject to the Bank's  consent,  until October 13, 2006.  Additional  loans made
pursuant to the Agreement have a three-year term.

     The unpaid  principal  balance of each loan is amortized over twenty years,
but matures  three years after it was incurred.  A  substantial  majority of the
loans under the Agreement  bear  interest at a floating rate of interest,  bears
interest at a floating per annum rate of interest,  adjusted  monthly,  equal to
the Federal Home Loan Bank of Cincinnati 30 day advance rate (the "Index"), plus
the applicable margin in accordance with the following matrix:


                  Index                     Bank Margin
                  <201                          350
                   201 - 475                    325
                   Greater than 475             300

     The  Borrowers'  obligations  under the  Agreement  are  secured by a first
priority lien on the mortgage loans ("Mortgage Loans") financed by proceeds from
the Agreement. The Mortgage Loans securing each Borrower's obligations under the
Agreement also secure each other Borrower's obligations under the Agreement. The
Agreement contains  customary  affirmative and negative covenants and conditions
regarding  the  Borrowers'  finances  and  operations  and  customary  events of
default.

     Each loan is also subject to an origination  fee of 1% or such other amount
as is  agreed  upon by the  parties,  and  related  fees  as  well  as  back-end
participation  payments subject to and based upon the performance of the related
Mortgage Loans.

     The Agreement also clarifies how payments are allocated  among the Bank and
any other  participants,  and provides that payments made on the Mortgage  Loans
will be applied first to pay  servicing and other fees and expenses  required to
be paid on the  Mortgage  Loans,  then  towards  principal,  interest  and other
amounts  fees due on the loans in the  manner  set forth in the  Agreement.  Any
remaining amounts will be applied in the manner the Bank may determine.

     Management  believes that sufficient cash flow from the collection of notes
receivable will be available to repay the Company's secured obligations and that
sufficient  additional  cash  flows will  exist,  through  collections  of notes
receivable,  the  sale of  loans,  sales  and  rental  of  OREO,  or  additional
borrowing, to repay the current liabilities arising from operations and to repay
the long term indebtedness of the Company

     The Company's Senior Debt Lender has provided  Tribeca with a warehouse
financing agreement of $40 million.  This Senior Debt accrues interest based on
prime.  At September 30, 2004, Tribeca had drawn down $35 million on the line.

Financing  Agreements.  The Company has a financing agreement  with the Senior
Debt  Lender  permitting  it to borrow a maximum of approximately $2,500,000 at
a rate equal to such lender's prime rate plus two percent per annum.  Principal
repayment of the lines is due nine months from the date of each cash advance and
interest is payable monthly.  The total amounts outstanding under the financing
agreements as of September 30, 2004 and December 31, 2003,  were  $477,966 and
$569,451 respectively.  Advances made under the financing agreement were used to
satisfy senior lien positions and fund capital improvements in connection with
foreclosures of certain real estate loans financed by the Company.  Management
believes the ultimate sale of these  properties  will satisfy the related
outstanding  financing  agreements and accrued  interest of the original secured
notes receivable.  The Company uses, when available,  OREO sales proceeds to pay
down financing agreements to help reduce interest expense.



<PAGE>

     Additionally, the Company has a financing agreement with Citibank.  The
agreement provides the Company with the ability to borrow a maximum of $150,000
at a rate equal to the bank's prime rate plus one percent per annum. As of
September 30, 2004 and December 31, 2003 $89,736 and $99,736 respectively, were
outstanding on the financing agreement.

Financing Activities and Contractual Obligations

Below is a schedule of the Company's contractual obligations and commitments at
September 30, 2004.

<TABLE>
<CAPTION>
                                Less than
(Amounts in thousands) Total     1 Year    1-3 Years     3-5 Years   Thereafter
-------------------------------------------------------------------------------
Contractual Cash
Obligations:
<S>                 <C>           <C>          <C>          <C>            <C>
Notes Payable    $747,154,565 $16,191,270 $126,075,888 $115,720,677 $489,166,730
Warehouse Line     35,180,332  35,180,332            -           -           -
Operating Leases
   -Rent            2,134,913     552,227    1,001,353      581,333          -
Capital Lease
   -Equipment         661,963     186,899      280,645      194,420          -
Employment
Agreements          2,010,000     710,000      650,000      650,000          -
                  ----------- ----------- ------------ ------------ ------------
Total Contractual
Cash Obligations $787,141,774 $52,820,728 $128,007,886 $117,146,430 $489,166,730
                 ============ =========== ============ ============ ============
</TABLE>
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Interest rate fluctuations can adversely affect the Company's income and value
of its common  shares in many ways and  present a variety of risks,  including
the risk of mismatch between asset yields and borrowing  rates, variances in the
yield curve and changing prepayment rates.

The Company's operating results will depend in large part on differences between
the income from its assets (net of credit losses) and its borrowing costs. Most
of the Company's assets, consisting primarily of mortgage notes receivable,
generate fixed returns and have terms in excess of five years.  The Company
funds the origination and acquisition of a significant  portion of these assets
with borrowings, which have interest rates that are based on the monthly Federal
Home Loan Bank of Cincinnati 30-day advance rate ("FHLB").  In most cases,  the
income from assets will respond more slowly to interest rate fluctuations than
the cost of borrowings, creating a mismatch between yields and borrowing rates.
Consequently changes in interest rates, particularly short-term rates may
influence the Company's net income.  The Company's  borrowing under agreements
with its Senior Debt Lender bear interest at rates that fluctuate with the FHLB
rate of Cincinnati and the prime rate.  Based on approximately $723 million and
$24 million of borrowings outstanding under this facility at September 30, 2004,
a 1% increase in FHLB and prime rate,  would  decrease the Company's quarterly
and nine month net income and net cash flows by  approximately $1.0 million and
$3.0 million  respectively, absent any other changes. The Company also has a
warehouse line of credit with its Senior Debt lender that funds the origination
of loans held for sale.  These borrowings have interest rates that are based on
the prime rate. Based on approximately  $35 million of borrowings outstanding
under this facility at September 30, 2004, a 1% increase in prime rate, would
further decrease the Company's quarterly and nine month net income and net cash
flows by approximately $47,000 and $141,750, respectively.  Increases in these
rates will decrease the net income and market value of the Company's net assets.
Interest rate fluctuations  that result in interest expense exceeding interest
income would result in operating losses.

The value of the Company's  assets may be affected by prepayment rates on
investments.  Prepayments rates are influenced by changes in current interest
rates and a variety of economic, geographic and other factors beyond the
Company's control, and consequently, such prepayment rates cannot be predicted
with certainty.  When the Company originates and purchases mortgage loans, it
expects that such mortgage loans will have a measure of protection from
prepayment in the form of prepayment  lockout  periods or prepayment  penalties.
In periods of declining  mortgage interest rates, prepayments on mortgages
generally increase.  If general interest rates decline as well, the proceeds of
such prepayments received during such periods are likely to be reinvested by the
Company in assets yielding less than the yields on the investments that were
prepaid.  In addition the market value of mortgage investments may, because the
risk of prepayment, benefit less from declining  interest rates than do other
fixed-income securities.  Conversely, in periods of rising interest rates,
prepayments on mortgage loans, generally decrease, in which case the Company
would not have the prepayment proceeds available to invest in assets with higher
yields.  Under certain interest rate and prepayment scenarios the Company may
fail to recoup fully its cost of acquisition of certain investments.

Real Estate Risk

Multi-family and residential  property values and net operating income derived
from such properties are subject to volatility and may be affected adversely by
number of factors, including, but not limited to, national, regional and local
economic conditions (which may be adversely affected by industry slowdowns and
other  factors);  local real  estate  conditions  (such as the over supply of
housing).  In the event net operating  income  decreases,  a borrower may have
difficultly paying the Company's mortgage loan, which could result in losses to
the Company.  In  addition, decreases in property values reduce the value of the
collateral and the potential proceeds available to a borrower to repay the
Company's mortgage loans, which could also cause the Company to suffer losses.




<PAGE>

Item 4.  Controls and Procedures.

As of the end of the period~covered by this Quarterly Report on Form 10-Q, the
Company carried out an evaluation, under the supervision and with the
participation of senior management, including the Company's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of its disclosure controls and procedures. Based upon that evaluation,
the Company's, Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective for
gathering, analyzing and disclosing the information that the Company is
required to disclose in reports filed under the Securities Exchange Act of 1934.

There have been no significant changes in the Company's internal controls over
financial reporting or in other factors during the fiscal quarter ended
September 30, 2004 that materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting
subsequent to the date the Company carried out its most recent evaluation.


                            Part II Other Information

Item 1. Legal Proceedings
                 None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
                 None

Item 3. Defaults Upon Senior Securities
                 None

Item 4. Submission of Matters to a Vote of Security Holders
                 None

Item 5. Other Information
                 None
<PAGE>







Item 6.  Exhibits
                                  EXHIBIT TABLE

Exhibit No.     Description

 3(a)           Restated Certificate of Incorporation.  Previously filed with,
                and incorporated herein by reference to, the Company's 10-KSB,
                filed with the Commission on December 31, 1994.

  3(b)          Bylaws of the Company.  Previously filed with, and incorporated
                herein by reference  to, the Company's Registration Statement
                on Form S-4, No.33-81948, filed with the Commission on November
                24, 1994.

 10(i)          Promissory Note between Thomas J. Axon and the Company, dated
                December 31,1998. Previously filed with, and incorporated
                herein by reference to, the Company's 10-KSB, filed with the
                Commission on April 14, 1999.

 10(j)          Promissory Note between Steve Leftkowitz, board member, and the
                Company dated March 31,1999. Previously filed with, and
                incorporated herein by reference to, the Company's 10-KSB, filed
                with the Commission on March 30, 2000.

 10(m)          Master Credit and Security Agreement between Sky Bank and
                Franklin Credit Management Corporation and subsidiaries.  Filed
                here with.

 31.1           Chief Executive Officer Certification required by Rules 13a-14
                and 15d-14 under the Securities Exchange Act of 1934,as amended.

 31.2           Chief Executive Officer Certification required by Rules 13a-14
                and 15d-14 under the Securities Exchange Act of 1934, as amended

 32.1           Certification of Chief Executive Officer pursuant  to 18 U.S.C.
                Section 1350, as adopted pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002.

 32.2           Certification of Chief Financial Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002.


                Reports on Form 8-K

                The Company filed an 8-K on May 20, 2004, Item 5."Other Events",
                the resignation of the companies CEO, Seth Cohen.

                The Company filed an 8-K on July 15, 2004, Item 2 "Acquisition
                or Disposition of Assets, relating to the acquisition of $310
                million in loans from Bank One and Item 7. Financial Statements,
                Pro Forma Financial Information and Exhibits.

                The Company filed an 8-K on July 16, 2004, an amendment to Item
                2 "Acquisition or Disposition of Assets, relating to the
                acquisition of $310 million in loans from Bank One.
                The Company filed an 8-K on July 20, 2004 19, 2004, Item 5
                "Other Events and Regulation FD Disclosure", issuance of a press
                release announcing the purchase of $310 million in assets from
                Bank One.

<PAGE>


                                   SIGNATURES


      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

November 15 2004

                                    FRANKLIN CREDIT MANAGEMENT
                                            CORPORATION


                                     By/s/  THOMAS J AXON
                                            Thomas J Axon
                                            Chairman of the Board



Signature                             Title                      Date


/s/JEFFREY R. JOHNSON          Chief Executive Officer      November 15 2004
   Jeffrey R. Johnson              and Director
(Chief Executive Officer)


/s/ALAN JOSEPH                Executive Vice President,     November 15 2004
   Alan Joseph                Chief Financial Officer
(Principal Financial Officer)      and Director




<PAGE>







Exhibit 31.1

                      CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Jeffrey R. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Franklin Credit
   Management Corporation;

2. Based on my  knowledge, this report does not contain any untrue statement of
   a material  fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

   a. Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

   b. Evaluated the effectiveness of the registrant's disclosure controls and
      procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of
      the period covered by this report based on such evaluation; and

   c. Disclosed in this report any change in the registrant's  internal control
      over financial reporting that occurred during the registrant's most recent
      fiscal quarter (the registrant's fourth quarter in case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the registrant's internal control over financial
      reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based
     on our most recent evaluation of internal control over financial reporting,
     to the registrant's auditors and the audit committee of the registrant's
     board of directors (or persons performing the equivalent functions):

     a.  All significant deficiencies and material weaknesses in the design or
         operation of internal control over financial report which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

     b.  Any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.

Date: November 15, 2004

By:    /s/ Jeffrey R. Johnson
                                       Jeffrey R. Johnson
                                       Chief Executive Officer
                                       Franklin Credit Management Corporation

<PAGE>


 Exhibit 31.2

                      CHIEF FINANCIAL OFFICER CERTIFICATION

I, Alan Joseph, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Franklin Credit
   Management Corporation;

2. Based on my knowledge,  this report does not contain any untrue statement of
   a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

   a. Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

   b. Evaluated the effectiveness of the registrant's disclosure controls and
      procedures and presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures, as of the end of
      the period covered by this report based on such evaluation; and

   c. Disclosed in this report any change in the registrant's internal control
      over financial reporting that occurred during the registrant's most recent
      fiscal quarter (the registrant's fourth quarter in case of an annual
      report) that has materially affected, or is reasonably likely to
      materially affect, the registrant's internal control over financial
      reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on
    our most recent evaluation of internal control over financial reporting, to
    the registrant's auditors and the audit committee of the registrant's board
    of directors (or persons performing the equivalent functions):

     a.  All significant deficiencies and material weaknesses in the design or
         operation of internal control over financial report which are
         reasonably likely to adversely affect the registrant's  ability to
         record,  process, summarize and report financial information; and

     b.  Any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.

Date: November 15, 2004



By:    /s/ Alan Joseph
                                       Alan Joseph
                                       Chief Financial Officer
                                       Franklin Credit Management Corporation


<PAGE>


Exhibit 32.1



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTIONS 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey R. Johnson, Chief Executive Officer of Franklin Credit Management
(the "Company") certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of
the Company on Form 10-Q for the fiscal quarter ended September 30, 2004 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that information contained in the
Quarterly Report on Form 10-Q fairly presents in all material respects the
financial condition and results of operations of the Company.

Date:  November 15, 2004

                                               BY:/s/ Jeffrey R. Johnson
                                                Name: Jeffrey R. Johnson
                                               Title: Chief Executive Officer



The foregoing  certification is being furnished solely pursuant to Section 906
of the  Sarbanes-Oxley  Act of 2002 (18 U.S.C. 1350) and is not being filed as
part of the Form 10-Q or as a separate disclosure document.


A signed original of this written  statement  required by Section 906 has been
provided to Franklin Credit Management Corporation and will be retained by
Franklin Credit Management Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.


<PAGE>

Exhibit 32.2



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTIONS 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


I, Alan Joseph,  Chief Financial Officer of Franklin Credit Management (the
"Company") certify,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section  906 of the Sarbanes-Oxley Act of 2002,  that the  Quarterly Report of
the Company on Form 10-Q for the fiscal quarter ended September 30, 2004 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that information contained in the
Quarterly Report on Form 10-Q fairly presents in all material respects the
financial condition and results of operations of the Company.

Date:  November 15, 2004

                                              BY: /s/ Alan Joseph
                                                Name: Alan Joseph
                                               Title: Chief Financial Officer



The foregoing  certification is being furnished solely pursuant to Section 906
of the  Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as
part of the Form 10-Q or as a separate disclosure document.

A signed original of this written statement required by Section 906 has been
provided to Franklin Credit Management Corporation and will be retained by
Franklin Credit Management Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.

<PAGE>