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

                                  FORM 10-QSB 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                            EXCHANGE ACT OF 1934  
            For the quarterly period ended September 30, 1996 


             Transitional Small Business Disclosure Format (check one): 
                             Yes........No....X... 
         
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                            EXCHANGE ACT OF 1934  
        For the transition period from _____________ to _____________ 

                     Commission file number 0-17771  

                  FRANKLIN CREDIT MANAGEMENT CORPORATION
     (Exact name of small business issuer as specified in its charter) 

            Delaware                                       75-2243266     
 (State or other jurisdiction
of incorporation or organization)          (I.R.S. Employer Identification No.) 

                          Six Harrison Street 
                      New York, New York  10013 
                            (212) 925-8745 
(Address of principal executive offices, including zip code, and telephone
                    number, including area code) 
          
   Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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     

 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING PRECEDING
                              FIVE YEARS 

  Check whether the issuer has filed all documents and reports required to be 
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.    Yes  X   No        

                    APPLICABLE ONLY TO CORPORATE ISSUERS 

 Indicate number of shares outstanding of each of the issuer's classes 
             of common stock, as of the latest practicable date: 

    Common Stock, $0.01 par value                       5,514,151           
         (Title of Class)                   Outstanding at November 14, 1996 
<PAGE>
                    FRANKLIN CREDIT MANAGEMENT CORPORATION 


                                 FORM 10-QSB 

                      QUARTER ENDED SEPTEMBER 30, 1996 


                               C O N T E N T S 


PART I.               FINANCIAL INFORMATION                              Page 

Item 1. Financial Statements 

   Consolidated Balance Sheets September 30, 1996 (unaudited) 
      and December 31, 1925                                                2

   Consolidated Statements of Income (unaudited) for the  
      three month and nine month periods  
      ended September 30, 1996 and 1995                                    3 

   Consolidated Statement of Cash Flows (unaudited) for the
      nine month periods ended September 30, 1996 and 1995                 4 

   Consolidated Statements of Stockholders' Equity                         5 

   Notes to Consolidated Financial Statements                             6-8 
         
Item 2. Management's Discussion and Analysis of Financial Condition  
              and Results of Operations                                  9-13 



PART II.                     OTHER INFORMATION 

Item 1. Legal Proceedings                                                 15 

Item 2. Changes in Securities                                             15 

Item 3. Defaults Upon Senior Securities                                   15 

Item 4. Submission of Matters to a vote of Security-Holders               15 

Item 5. Other Information                                                 15 

Item 6. Exhibits and Reports on Form 8-K                                  15 

SIGNATURES                                                                16 

Exhibit Index                                                             17 





                                     1 
<PAGE>
Item 1.  Financial Statements

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
<S>                                             <C>                    <C>
                                             30-Sept-96              31-Dec-95
ASSETS                                       (unaudited)             (audited)
-------------------------------------------------------------------------------            -----------------
Cash                                        $  1,382,748           $  1,335,800
Restricted Cash                                  759,705                617,111

Notes Receivable:
    Principal amount                         104,042,374            116,573,463
    Joint venture participations                (368,919)              (448,966)
    Purchase discount                        (22,446,714)           (28,708,043)
    Allowance for loan losses                (21,394,942)           (20,420,311)
                                             -----------            -----------
                                              59,831,797             66,996,143

Accrued Interest Receivable                    1,194,303              1,150,869
Other Real Estate Owned                        6,239,973              3,785,651
Inventory, automobiles                             -                    267,428
Litigation Proceeds Receivable                   441,393                502,486
Refundable income tax                             29,742                 74,240
Other Assets                                   1,010,541                938,001
Building, Furniture & Fixtures, net              629,103                698,418
Loan Commitment Fees and Other, net            1,312,307              1,564,920
                                             -----------            -----------
                                             $72,831,613            $77,931,067
                                             ===========            ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------

Liabilities:
    Accounts payable and accrued
       expenses                             $  1,532,269          $     701,142
    Lines of credit                              748,920              1,324,128
    Notes payable                             64,012,558             69,315,917
    Subordinated debentures                    1,083,750              1,260,000
    Notes payable, affiliates                    326,192                834,616
    Deferred income tax credits                1,118,408              1,240,540
    Contingency - Loan Sale                       63,113                  -
                                             -----------            -----------
          Total liabilities                   68,885,210             74,676,343

Stockholder's Equity:
    Common Stock, $.01 par value,
      10,000,000 shares authorized,
      5,514,151 and 5,503,896 shares
      issued and outstanding in 1996
      and 1995, respectively                      55,143                 55,040
    Additional paid-in Capital                 6,490,421              6,470,952
    Accumulated deficit                       (2,599,161)            (3,271,268)
                                             -----------            -----------
                                               3,946,402              3,254,724
                                             -----------            -----------
                                             $72,831,613            $77,931,067
                                             ===========            ===========
</TABLE>

See Notes to Consolidated Financial Statements.

                                            2
<PAGE>
Item 1.  Financial Statements

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Month
Periods ended September 30, 1996 and 1995
<S>                           <C>         <C>                <C>          <C> 
                                  Three Months Ended        Nine Months Ended
                                30-Sept-96  30-Sept-95   30-Sept-96  30-Sept-95
                                (unaudited) (unaudited)  (unaudited) (unaudited)
--------------------------------------------------------------------------------
Revenue:
  Interest Income               $1,475,203  $2,028,514   $4,652,253  $4,441,842
    Purchase Discount Earned     1,696,808     948,353    4,822,957   2,922,782
    Loss on liquidation of 
     partnership interests           -          (1,047)        -        (17,515)
    Gain on sale of portfolios       -           -          977,519       -
    Other                           69,210     117,768      218,352     208,820
                                ----------  ----------  -----------  ----------
                                 3,241,221   3,224,588   10,671,081   8,555,929
                                ----------  ----------  -----------  ----------
Operating expenses:
    Collection, general 
     and administrative          1,000,300     908,168    2,815,656   2,480,700
    Provision for loan losses      138,727     270,321      578,918     852,670
    Interest Expense             1,943,095   1,547,461    5,730,346   4,057,049
    Service Fees                    96,439     280,616      292,953     614,139
    Amortization of debt
      issuance costs               108,902     204,843      445,541     515,121
    Depreciation                    16,035      12,652       49,429      37,955
                                ----------  ----------  -----------  ----------
                                 3,303,498   3,224,061    9,912,752   8,557,634
                                ----------  ----------  -----------  ----------
       Operating income (loss)     (62,277)   (130,473)     758,329      (1,705)

    Litigation proceeds             55,500       -           75,500       -
                                ----------  ----------  -----------  ----------
                                    (6,777)   (130,473)     833,829      (1,705)
  
    Provision for income taxes      41,364     (21,352)     161,722      23,005
                                ----------  ----------  -----------  ----------
                                   (48,141)   (109,121)     672,107     (24,710)
    Minority interest in
      net income of 
      consolidated partnerships      -          16,483        -          36,576
                                ----------  ----------  -----------  ----------
       Net income               $  (48,141) $  (92,638) $   672,107  $   11,866
                                ==========  ==========  ===========  ==========


Earnings per common share:
    Income before minority interest
      in net income of consolidated
      partnerships              $    (0.01) $    (0.02) $     0.12   $    0.00
    Minority interest in net 
      income Of consolidated
      partnerships                    -           -           -           -
                                ----------  ----------   ---------   ---------
    Net income                  $    (0.01) $    (0.02)  $    0.12   $    0.00
                                ----------  ----------   ---------   ---------
Weighted average number of shares
      outstanding                5,509,028   5,247,871   5,509,028   5,247,871
                                ==========   =========   =========   =========
</TABLE>


See Notes to Consolidated Financial Statements.

                                                    3
<PAGE>

Item 1.  Financial Statements

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months ended September 30, 1996 and 1995
<S> <C> <C> <C>                                                   <C>                  <C>

                                                   30-Sept-96       30-Sept-95
                                                   (unaudited)      (unaudited)
------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
  Net income                                       $    672,107    $    11,866
  Adjustments to reconcile net income to net
    cash used in operating activities:
    Depreciation, depletion, amortization 
       and valuation provisions                         494,970        553,076
    Minority interests in net income of affiliates        -            (36,576)
    Loss on sale of portfolios                            -            (50,522)
    Purchase discount earned                        (4,822,957)     (2,922,782)
    Provision for loan losses                          578,918         852,670
    Deferred tax provision (benefit)                   161,722          34,498
    Changes in assets and liabilities:
      (Increase) decrease in:
         Accrued interest receivable                    16,572        (786,861)
         Accounts receivable                            29,632         173,867
         Repossessions - real estate
           and automobiles                          (1,420,094)     (2,469,835)
         Other assets                                   45,869      (1,138,497)
      Increase (decrease) in:
         Accounts payable and 
           accrued expenses                            832,517         212,598
         Due to affiliates                                 851        (167,796)
                                                   ------------     -----------
           Net cash used in operating activities    (3,409,892)     (5,734,294)

Cash Flows From Investing Activities
  Purchase of property and equipment                    19,886         (49,075)
  Purchase of notes receivable                     (10,362,046)    (19,040,914)
  Principal collections on notes receivable         21,219,046      12,256,132
  Joint venture participation                         (116,945)        (42,203)
  Acquisition fees paid                               (191,091)       (513,760)
  (Increase) in restricted cash                       (142,595)       (184,717)
                                                  ------------     -----------
          Net cash used in investing activities     10,426,092      (7,574,537)

Cash Flows From Financing Activities
  Distributions to minority interests                    -            (317,536)
  Payments on debenture notes payable                 (176,250)        (65,900)
  Capital Contributions                                  -               1,834
  Proceeds from debenture notes                          -             625,000
  Proceeds from lines of credit                        474,711           -
  Payments on lines of credit                       (1,049,920)          -
  Proceeds from long-term debt                      10,336,175      21,206,382
  Principal payments of long-term debt             (16,553,967)     (7,550,066)
                                                  ------------     -----------
          Net cash provided by 
               financing activities                 (6,969,251)     13,740,515
                                                  ------------     -----------
          Net increase in cash                          46,949         431,684

Cash:
   Beginning                                         1,335,800         681,234
                                                  ------------     -----------
   Ending                                          $ 1,382,748     $ 1,112,918
                                                  ============     ===========
</TABLE>

See Notes to Consolidated Financial Statements.


                                        4

<PAGE>
Item 1. Financial Statements

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<S>      <C>                                <C>          <C>            <C>              <C>

                                                              
                                  Common Stock       Additional      Retained
                               ------------------      Paid-In       Earnings
                               Shares       Amount     Capital       (Deficit)
-------------------------------------------------------------------------------
Balance, December 31, 1994    5,247,871   $ 52,479    $5,838,941   $(3,395,971)
  Conversion of subordinated
     debentures                 254,457      2,545       484,455
  Conversion of warrants          1,568         16         2,977
  Contributed capital                                    144,579
  Net income                                                           124,703
                            ---------------------------------------------------
Balance, December 31, 1995    5,503,896     55,040     6,470,952    (3,271,268)

  Net income                                                           672,107
  Conversion of warrants         10,255        103        19,469

                            ---------------------------------------------------
Balance, September 30, 1996   5,514,151   $ 55,143    $6,490,421   $(2,599,161)
                            ===================================================
</TABLE>

See Notes to Consolidated Financial Statements.

                                                   5
<PAGE>
FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES 


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
                            
Note 1. Nature of Business and Significant Accounting Polices 

Nature of business:  Franklin Credit Management Corporation, (the "Registrant"
or "Company"), a Delaware corporation, acquires from mortgage and finance 
companies as well as from the Federal Deposit Insurance Corporation (the "FDIC")
non-performing, non-conforming and sub-performing loans and promissory notes 
which it restructures, brings to performing status and holds through repayment 
or sale.   

A summary of Registrant's significant accounting polices follows: 

Basis of financial statement presentation:  The financial statements have been
prepared in accordance with generally accepted accounting principles and general
practices similar to those of a consumer finance company.  In preparing the
financial statements, management is required to make estimates and assumptions
that affect amounts of assets and liabilities as of the date of the balance 
sheet and revenue and expenses for the period.  Actual results could differ 
from those estimates. 

Basis of consolidation:  The consolidated financial statements include the 
accounts of Company, its wholly-owned subsidiaries, and all limited partnerships
controlled by the Company during the respective periods.  By terms outlined in 
the various limited partnership agreements in effect during 1995, the Company 
was specifically afforded full power and authority on behalf of the limited 
partnerships to manage, control, administer and operate the business and affairs
of the limited partnerships.  During 1995, the Company purchased the interests
of the limited partners and all limited partnerships were liquidated.  The loss
realized upon liquidation of the limited partnerships for the fiscal year ended
December 31, 1995 was $247,105.  Limited partnership interests purchased from 
limited partners who also had an ownership interest in the Company were treated
as additional paid-in capital, if the transaction resulted in a gain.  All
significant intercompany accounts and transactions have been eliminated in
consolidation.   

Cash:  For purposes of reporting cash flows, the Company includes all cash
accounts (excluding restricted cash) and money market accounts held at financial
institutions. 

Loans and income recognition:  The loan portfolio consists primarily of secured 
consumer and real estate mortgage loans purchased from mortgage and finance 
companies as well as from the FDIC, usually at a substantial discount. 

Loans are stated at the amount of unpaid principal, reduced by purchase discount
and an allowance for loan loss.  The Company has the ability and intends to hold
its loans  until  maturity,  liquidation  of  collateral  or sale.  In  general,
interest on the loans is calculated by using the simple-interest method on daily
balances of the collectible principal amount outstanding.

Accrual of interest is discontinued on a loan when  management  believes,  after
considering  economic,  business  conditions and collections  efforts,  that the
borrowers' financial condition is such that collection of interest is doubtful.

Purchase  discount is amortized  to income  using the  interest  method over the
period to maturity. The interest method recognizes income based on the timing of
projected principal  collections of the loans using a effective yield on the net
investment in the loans.  Discounts are amortized if the projected  payments are
probable  of  collection  and the  timing  of  such  collections  is  reasonably
estimable.  The  projection  of cash flows for purposes of  amortizing  purchase
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.  Should projected  payments 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 a portion of the difference  between the Company's  acquisition
price  and face  value  of the  purchase  loan  discount  based on  management's
assessment  of the  portion of such  difference  that  represents  uncollectible
principal. Subsequently, increases to the allowance are made through a provision
for loan losses charged to expense and is maintained at a level that  management
considers adequate to provide for potential losses in the loan portfolio.  While
management  uses  available  information  to recognize  losses on loans,  future
additions to the allowance or write-downs  may be necessary  based on changes in
economic conditions.

                                     6 
<PAGE>

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES 


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

Note 1. Nature of Business and Significant Accounting Polices (Continued) 

Management's  judgment in determining  the adequacy of the allowance is based on
the   evaluation   of   individual   loans  within  the   portfolio,   the  risk
characteristics  and size of the  loan  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.
Loans are charged against the allowance for loan losses when management believes
that the collectibilty of principal is unlikely.  Any subsequent  recoveries are
credits to the allowance for loan losses when received.  In connection  with the
determination  of allowance  for loan  losses,  management  obtains  independent
appraisals for significant properties, when considered necessary.

The  Registrant's  loans are  generally  collateralized  by real estate  located
throughout the United States. Accordingly, the collateral value of a substantial
portion of the  Registrant's  real estate loans and real estate acquired through
foreclosure is susceptible to market conditions.

On  January  1, 1995,  Registrant  adopted  Statement  of  Financial  Accounting
Standards No. 114,  Accounting by Creditors for Impairment of a Loan ("Statement
114").  Statement  114 has been  amended by  Statement  No. 118,  Accounting  by
Creditors for  Impairment of a Loan - Income  Recognition  and  Disclosures.  As
required by Statement 114, as amended, the impairment of loans is measured based
upon the present  value of expected  future  cash flows or,  alternatively,  the
lower of the  market  price of the  loans or the fair  value of the  collateral.
However, for those loans that are collateral dependent (that is, if repayment of
those loans is expected to be provided solely by the underlying  collateral) and
for which management has determined that foreclosure is probable, the measure of
impairment  is based  solely  upon the fair value of the  collateral.  A loan is
deemed  impaired  when it is probable the creditor will be unable to collect all
contractual  principal and interest payments due in accordance with the terms of
the loan agreement.  Approximately 10% of the Company's loan portfolio  consists
of smaller  balance,  homogenous  loans  which are  evaluated  collectively  for
impairment.  The larger balance real estate loans are evaluated individually for
impairment.

Building, property and equipment:  Building, property and equipment are recorded
at cost.  Depreciation  is  computed  using the  straight-line  method  over the
estimated useful lives of the assets.

Loan  commitment  fees: Loan  commitment  fees represent loan  origination  fees
incurred by the Company in connection with obtaining financing and are amortized
based on the principal reduction of the related loans.

Other real estate owned: Other real estate owned ("OREO") represents  properties
acquired through foreclosure, accepted by deed in lieu of foreclosure or through
other proceedings.  OREO is recorded at the lower of the carrying amounts of the
related loans or the fair market value of the properties less estimated costs to
sell. Any write-down to fair value,  less costs to sell, at the time of transfer
to OREO, is charged to the allowance for loan losses. Subsequent write-downs are
charged to operations based upon management's  continuing assessment of the fair
value of the underlying  collateral.  Property is evaluated  regularly to ensure
that the recorded  amount is supported by its current fair market  value.  Costs
relating to the  development  and  improvement of the property are  capitalized,
subject to the limit of fair value of the  collateral,  while costs  relating to
holding the property are  expensed in the period  incurred.  Gains or losses are
recognized, through the amortization of purchase discount, upon disposal.

Deferred  income  taxes:  Deferred  taxes are recorded  based upon the asset and
liability  method  whereby  deferred tax assets are  recognized  for  deductible
temporary  differences  and  operating  loss or tax  credit  carryforwards,  and
deferred tax  liabilities  are  recognized  for taxable  temporary  differences.
Temporary  differences  are the  differences  between  the amounts of assets and
liabilities  recorded for income tax and financial reporting purposes.  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 enactment.



                                      7 


<PAGE>

FRANKLIN CREDIT MANAGEMENT CORPORATION AND AFFILIATES 


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

Note 1. Nature of Business and Significant Accounting Polices (Continued) 

Earnings per common share: Earnings per share are computed based on the weighted
average number of common shares  outstanding  during the period and includes the
effect  of  redeemable  common  stock  and  outstanding  warrants.   Unconverted
debentures  of the Company,  which may be converted  to Common  Stock,  employee
incentive  options and  directors  non-qualified  options,  are deemed not to be
common stock  equivalents.  Earnings per common share has been  restated for the
effects of the merger of the Company and Old Franklin.

Fair value of financial instruments: Statement of Financial Accounting Standards
No.  107,  Disclosures  About Fair Value of  Financial  Instruments  ("Statement
107"),   requires   disclosure  of  fair  value   information   about  financial
instruments,  whether or not  recognized on the balance  sheet,  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 applied 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 107 excludes
certain  financial  instruments  and  all  nonfinancial   instruments  from  its
disclosure requirements. Accordingly, the aggregate fair value amounts presented
do not represent the underlying value of the Company.

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

Cash,  restricted  cash,  accrued  interest  receivable,  other  receivables and
accrued  interest  payable:  The carrying  value  reported in the balance  sheet
approximates their fair values.

Notes  receivable:  Fair  value  of the  net  loan  portfolio  is  estimated  by
discounting the future cash flows using the interest  method.  In the opinion of
management the carrying  amounts of the notes  receivable  approximate  the fair
value of such notes receivable.

Short-term  borrowings:  The  carrying  amounts  of the line of credit and other
short-term borrowings approximate their fair value.

Long-term  debt:  Fair value of the Company's  long-term debt  (including  notes
payable ("Senior Debt"),  subordinated debentures and notes payable,  affiliate)
is estimated using  discounted  cash flow method based on the Company's  current
incremental  borrowing  rates for similar types of borrowing  arrangements.  The
carrying amounts reported on the balance sheet approximate their fair value.

Accounting for the  impairment of long-lived  assets:  The Financial  Accounting
Standards Board has issued  Statement No. 121,  Accounting for the Impairment of
Long-Lived Assets or Assets to be Disposed Of ("Statement  121"),  which becomes
effective for the Company's fiscal year ending December 31, 1996.  Statement 121
establishes  accounting  standards  for the  impairment  of  long-lived  assets,
certain  identifiable  intangibles,  goodwill related to those assets to be held
and used, and for long-lived assets and certain  identifiable  intangibles to be
disposed.  The Company does not  anticipate  that the adoption of this  standard
will have a significant impact on its financial statements.

                                    8 
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations. 

Results of Operations 

Three Months Ended  September 30, 1996 Compared to Three Months Ended  September
30, 1995
         
     Total revenue for the three months ended September 30, 1996 increased  by
$147,633 or 5%, to  $3,241,221  from  $3,093,588  during the three  months ended
September  30, 1995.  Total  revenue  generally  consists  primarily of interest
income,  purchase  discount  earned and gain upon sale of  portfolios.  Interest
income on Notes  Receivable  for the three  months  ended  September  30,  1996,
decreased by $553,311 or 27%, to  $1,475,203  from  $2,028,514  during the three
months ended September 30, 1995. The Company recognizes interest income on Notes
Receivable based upon three factors;  (i) interest from performing  notes,  (ii)
interest received with payments from non-performing  notes and (iii) the balance
of loan  settlements  in excess of principal  balances.  The decline in interest
income  resulted  primarily  from  the  increased  average  age of  loans in the
Company's  portfolio,  which,  since  such  loans  typically  provide  for level
amortization,  resulted in a greater portion of payments  received being applied
towards their respective  principal  balances as opposed to interest income, and
from the impact of a decrease in the prime rate on the  majority of the loans in
the Company's portfolio, which accrue interest at an adjustable rate.

     Purchase discount earned for the three months ended September 30, 1996 
increased by $748,455 or 79%, to $1,696,808 from $948,353 during the three 
months ended September 30, 1995. The increase in purchase discount earned was
primarily attributable to the improved performance of the Notes Receivable 
acquired in December 1995 and a net increase of approximately $9,000,000 or 9%,
in the size of the Company's portfolio at September 30, 1996, over that at 
September 30, 1995. Notes Receivable purchased in December 1995, accounted 
for $296,116 or 17% of the purchase discount earned, with the remainder 
resulting from the remaining Notes Receivable.

        Total operating expenses for the three months ended September 30, 1996
increased by $79,437 or 2%, to $3,303,498 from $3,224,061 during the three 
months ended September 30, 1995. 

        Collection, general and administrative expenses for the three months 
ended September 30, 1996 increased by $92,132 or 10%, to $1,000,300 from 
$908,168 during the three months ended September 30, 1995.  Personnel expenses 
decreased by $78,095 or 22%, to $272,853 from $350,948 during the three months
ended September 30, 1995 due primarily to staff reductions during the
intervening period.  All other collection expenses increased by $170,227 or 31%,
to $727,447 from $557,220 during the three months ended September 30, 1995. This
increase resulted primarily from litigation and OREO expenses directly relating
to the $2,454,322 increase in OREO and the 9% increase in size of the Company's
portfolio, which was only partially offset by economies of scale.  Management 
believes that OREO will continue to increase by virtue of the portfolios we 
acquire.  OREO can have a material effect due to the variables associated in the
real estate market.  While management currently estimates that OREO will not 
have a material effect, future estimates of materiality will be a function of 
the nationwide real estate market.  The Registrant's general policy is to manage
OREO as rental properties until such time as it can arrange economically 
beneficial sales of such properties. 

        Provisions for loan losses for the three months ended September 30, 1996
decreased by $131,594 or 49%, to $138,727 from $270,321 in the three months 
ended September 30, 1995.  This decrease reflects a change in accounting method
from expensing of the provision for loan losses in 1995, when the Company's 
portfolio of Notes Receivable was unseasoned, and management expected its 
estimates of loan losses to require frequent adjustment, to reflecting the 
provision as a reserve to be amortized over the life of the portfolio in 1996, 
when the portfolio was more seasoned and management believed it could better 
estimate the necessary reserves.  Bad debt expense expressed as a percentage of 
gross notes receivable decreased to .001% for the quarter ended September 30, 
1996 from .003% for the quarter ended September 30, 1995.   

        Interest expense for the three months ended September 30, 1996 increased
by $395,634 or 26%, to $1,943,095 from $1,547,461 in the three months ended 
September 30, 1995.  Senior Debt increased by $12,867,598 or 25%, to $64,188,398
as of September 30, 1996, from $51,320,800 as of September 30, 1995.  This 
higher level of debt relates to funding the purchase of $23,000,000 of Notes 
Receivable.  The notes payable of the Company accrue interest at variable rates
based upon the prime rate.  The decrease in the weighted prime rate to 8.25% 
during the quarter ended September 30, 1996 from 8.85% during the quarter ended
September 30, 1995, had a positive effect in reducing the cost of borrowed funds
used to acquire Notes Receivable.  Had the prime rate remained constant at 
8.85%, interest expense would have been approximately $68,000 higher for the 
quarter ended September 30, 1996. 

                                   9 
<PAGE>
        In June, 1996 the Company concluded negotiations with its Senior Debt 
lenders to modify the existing terms of its Senior Debt obligations.  These 
modifications reduced the rates at which Senior Debt accrues service fees.  
Service fees for the three months ended September 30, 1996 decreased by $184,177
or 66%, to $96,439 from $280,616 in the three months ended September 30, 1995. 
Without this modification, service fees would have been $192,878 for three
months ended September 30, 1996.  The modifications accounted for $96,439 or 52%
of the total reduction for the three months ended September 30, 1996.   

        Operating losses for the three months ended September 30, 1996 decreased
by $68,196 or 52%, to $62,277 from $130,473 during the three months ended 
September 30, 1995.  This decrease was primarily attributable to increased 
purchase discount earned reflecting the acquisition by the Company of 
approximately $23,000,000 of Notes Receivable in December 1995.  Following the 
purchase of new Notes Receivable the Company immediately begins to recognize the
expenses, including interest expense, collection, general and administrative 
expenses, and service fees associated with carrying and servicing such Notes 
Receivable.  The corresponding interest income and purchase discount earned, on
the other hand is recognized after the Notes Receivable provide predictable cash
flows and/or reach performing status.  During the three months ended September 
30, 1996, a majority of the loans purchased at December 1995 were performing and
contributed to increase in operating income.   

        During the three months ended September 30, 1996, operating loss as a 
percentage of net notes receivable was .1% as compared to .3% for the three 
months ended September 30, 1995.  As noted previously, the timing differences 
between realization of interest income and purchase discount earned on the one 
hand, and interest expense, service fees, collections expenses and amortization
of loan commitment fees for the newly acquired portfolios on the other, 
generally result in recognition of increased operating expenses prior to the 
corresponding increase in related income upon the acquisition of new Notes 
Receivable. 

        Loss before litigation proceeds, taxes and minority interest for the 
three months ended September 30, 1996 decreased by $68,196 or 52%, to $62,277 
from $130,473 in the three months ended September 30, 1995.  Net loss decreased 
by $44,497 or 48%, to $48,141 from a loss of $92,638 in the three months ended
September 30, 1995 reflecting principally the receipt by the Company of 
litigation proceeds of $55,500 during the three months ending September 30,1996.



Nine Months Ended September 30, 1996 Compared to Nine Months Ended 
September 30, 1995 

        Total revenue for the nine months ended September 30, 1996 increased by
$2,115,152 or 25%, to $10,671,081 from $8,555,929 during the nine months ended
September 30, 1995.  Interest income on Notes Receivable for the nine months 
ended September 30, 1996, decreased by $789,589 or 15%, to $4,652,253 from
$5,441,842 during the nine months ended September 30, 1995.  The decline in 
interest income resulted primarily from the increased age of loans in the 
Company's portfolio at September 30, 1996, the impact of a decrease in the 
prime rate on the Company's adjustable rate Notes Receivable, which comprise a
majority of the Company's portfolio and the bulk sale in June 1996 of $6,311,404
in face amount of performing loans, which were only partially offset by the 
purchase in December 1995 of additional Notes Receivable. 

        Purchase discount earned for the nine months ended September 30, 1996 
increased by $1,900,175 or 65%, to $4,822,957 from $2,922,782 in the nine months
ended September 30, 1995. The increase in purchase discount earned was primarily
attributable to the acquisition of approximately $28,600,000 of Notes 
Receivable, in December 1995 resulting in a 25% increase in the size of the 
Company's portfolio at September 30, 1996, over that at December 31, 1995.  
Notes Receivable purchased in December 1995, accounted for $952,767 or 20% of
the purchase discount earned during the nine months ended September 30, 1996,
with the remainder resulting from the remaining Notes Receivable. 

        During the nine months ended September 30, 1996 gains from the sale of
portfolios increased to $977,519 from $0 in the nine months ended September 30, 
1995. In June 1996, the Company sold $6,311,404 or 6%, of its loan portfolio at
 90.75% of aggregate of the remaining principal balances.  The total proceeds 
from the sale were $5,727,599, generating a gain of $977,519.  The Company 
incurred associated costs of sale of $84,992 which resulted in a net gain of 
$892,527.  The Company believes that selective sales of Notes Receivable which
it has brought to performing status, the purchase of which was funded with high
interest Senior Debt (as hereafter defined), and the use of proceeds of such 
sales to pay down such debt, increases profitability.  Additionally, new 
purchases of Notes Receivable will be made with the benefit of a decreased prime
rate and the more advantageous terms currently available to the Company in 
connection with Senior Debt lender. 

        Total operating expenses for the nine months ended September 30, 1996
increased by $1,355,118 or 13%, to $9,912,752 from $8,557,634 in the nine months
ended September 30, 1995. 

                                    10 
<PAGE>
        Collection, general and administrative expenses for the nine months 
ended September 30, 1996 increased by $334,865 or 13%, to $2,815,565 from 
$2,480,700 in the nine months ended September 30, 1995.  Personnel expenses 
decreased by $100,950 or 11%, to $837,302 from $938,252 in the nine months ended
September 30, 1995 due primarily to staff reductions during the intervening 
period.  All other collection expenses, increased by $435,815 or 28%, to 
$1,978,263 from $1,542,448 in the nine months ended September 30, 1995.  This 
increase resulted primarily from litigation and OREO expenses directly related 
to the $2,454,322, increase in OREO, and the increased size of the Company's 
portfolio of Notes Receivable being serviced which was only partially offset 
by economies of scale. 

        Provisions for loan losses for the nine months ended September 30, 1996 
decreased by $273,752 or 32%, to $578,918 from $852,670 in the nine months ended
 September 30, 1995.  The decrease reflected primarily the filing for bankruptcy
in 1995 of a borrower who owed the Company approximately $235,000, the Company's
efforts in 1996 to reduce costs associated with managing its automobile 
inventory by writing off $155,396 worth of automobiles and the improved 
performance of certain Notes Receivable.  Bad debt expense expressed as a 
percentage of gross notes receivable for the nine months ended September 30, 
1996 and the nine months ended September 30, 1995 equaled approximately 1%.  
The decrease in provision for loan losses reflects both the write-offs 
previously mentioned and improved performance of certain Notes Receivable. 
         
        Interest expense for the nine months ended September 30, 1996 increased
by $1,673,297 or 41%, to $5,730,346 from $4,057,049 in the nine months ended 
September 30, 1995.  Senior Debt increased $12,867,598 or 25% from $51,320,800,
 as of September 30, 1995 to $64,188,398 as of September 30, 1996, which 
increase was only partially offset by the repayment in June 1996 of $5,741,102 
of the Company's highest interest Senior Debt in connection with the bulk sale 
of loan portfolio.  The decrease in the weighted prime rate to 8.28% during the 
six months ended June 30, 1996 from 8.86% during the nine months ended September
30, 1995 had a positive effect in reducing the cost of borrowed funds used to 
acquire Notes Receivable.  Had the prime rate remained constant at 8.86%, 
interest expense would have been approximately $216,000 higher for the nine 
months ended September 30, 1996. 

        In June 1996, the Company concluded negotiations with its Senior Debt 
lenders to modify the existing terms of its Senior Debt obligations.  These 
modifications reduced the rates at which Senior Debt accrues service fees.  
Service fees for the nine months ended September 30, 1996 decreased by $321,186 
or 52%, to $292,953 from $614,139 in the nine months ended September 30, 1995.
In June 1996, a retroactive adjustment to the beginning of the year was recorded
to reduce service fees.  Absent the modification service fees would have been 
$562,221 for nine months ended September 30, 1996.  The modifications accounted
for $269,268 or 83% of the total reduction.  The remaining 17% of the reduction
resulted from no service fees being incurred from the debt repaid in June 1996
in connection with the bulk sale. 

        Operating income for the nine months ended September 30, 1996 increased
by $760,034, to $758,329 from a loss of $1,705 during the nine months ended 
September 30, 1995.  This increase was primarily attributable to, the gain on
the bulk sale of the loan portfolios net of its associated costs of and 
increased purchase discount earned reflecting the acquisition by the Company of
approximately $40,000,000 of Notes Receivable since September 1995.  During the
nine months ended September 30, 1996, a majority of the loans purchased since
September 1995 achieved performing status and contributed to increase in 
operating income.   

        During the nine months ended September 30, 1996, operating income as a 
percentage of net notes receivable was 2% as compared to .003% for the nine 
months ended September 30, 1995.  As noted previously, the timing differences 
between realization of interest income and purchase discount earned on the one 
hand, and interest expense, service fees, collections expenses and amortization 
of loan commitment fees for the newly acquired portfolios on the other, 
generally result in increased operating expenses prior to the corresponding 
increase in income related as the loan in the portfolio reach performing status.

        Income before litigation proceeds, taxes and minority interest for the 
nine months ended September 30, 1996, increased by $760,034 to $758,329 from a 
loss of $1,705 in the nine months ended September 30, 1995.  Net income 
increased to $672,107  for the nine months ended September 30, 1996 from $11,866
in the nine months ended September 30, 1995, for the reasons described above. 


                                     11 
<PAGE>
Liquidity and Capital Resources 

        At September 30, 1996, the Company had cash of $1,382,748, reflecting a
net increase of $46,949 from December 31, 1995.  During the first nine months of
1996, the Company used cash in the amount of $3,409,892 in its operating 
activities, primarily for overhead, litigation and for the foreclosure and 
improvement of OREO.  The Company generated $10,426,092 from its investing 
activities, primarily due to the collections on and sale of Notes Receivable.  
The net amount of cash used in financing activities was $6,969,251, reflecting 
a net decrease in Senior Debt and lines of credit. 

        In the normal course of its business,the Company accelerates and 
forecloses upon non-performing consumer loans included in its portfolio which 
are secured by first and second mortgages.  As a result of such foreclosures, 
the Company held OREO having a net realizable value of $6,239,973 at September
30, 1996.  Management believes that OREO will be held as rental property or sold
in the ordinary course of business and that the increase in OREO held as 
inventory at September 30, 1996 is not material to the operations of the 
Company.   

        The Company held as inventory automobiles having a fair market value of
$267,428 as of December 31, 1995, which it obtained through repossessions and 
recorded at the lower of cost or fair market value.  In an effort to reduce 
costs associated with managing the automobile inventory, the Company wrote off 
$155,396 worth of automobiles in June 1996.   

        At September 30, 1996, the Company held no automobile inventory.  
Management believes that any additional automobile inventory acquired in the 
ordinary course of business from the Company's remaining automobile loans, will 
be sold.  The Company has ceased to purchase Notes Receivable secured by 
automobiles.  Approximately $318,000 or .3% of the Company's gross loan 
portfolio at September 30, 1996 was secured by automobiles. 

        Certain of the Company's loan agreements require payment of "service 
fees" based on gross cash collections of principal and interest as well as 
accelerated principal reductions from early payoff collections.  The use of this
 cash flow for the repayment of bank debt may create cash shortages in the 
Company's ability to fund operations, pay taxes and retire its subordinated 
debt.  Management believes that the Company's existing cash balances, credit 
lines and anticipated cash flow from operations will provide sufficient capital
resources for its anticipated operating needs.  The Company has negotiated with 
its Senior Debt lender a modifications of the terms of its funding of cash flows
for operations, which may improve cash flows. See "Cash Flow from Financing 
Activities". 

Cash Flow From Operating and Investing Activities 

        Substantially all of the assets of the Company are invested in its 
portfolio of Notes Receivable.  The Company's primary source of cash flow from 
operating and investing activities is collections on Notes Receivable and the 
sale of loan portfolios.  An increase in acquisitions and in collection efforts 
have supported the Company's operations. See -"Results of Operations". 

Cash Flow From Financing Activities 

        In June 1996, the Company negotiated with its Senior Debt lender a 
modification to the Senior Debt obligations which eases the cash flow 
restrictions placed upon the Company.  Management believes that this 
modification may reduce the irregular periods of cash flows shortages.  
Management believes that the Company has sufficient cash flow to pay current 
liabilities arising from operations.  Management also 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 Loan 
Portfolios, continued modifications to the secured debt credit agreements or 
additional borrowings, to repay current liabilities arising from operations and 
to repay the long term indebtedness of the Company.  The Company has no 
commitments for capital expenditures.  Other than management's intent to acquire
additional Loan Portfolios, the Company is aware of no trends or changes in 
operations that would cause the Company to incur significant additional capital
 expenditures in the future. 

        Senior Debt.  As of September 30, 1996, the Company and its wholly owned
 subsidiaries owed an aggregate amount of $64,188,398, under eighteen loans, 
(the "Senior Debt") from two financial institutions. 

        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 

                                     12 
<PAGE>
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.  The Senior Debt accrues interest at 
variable rates ranging from 1.5% to 3% over the prime rate.  The accelerated 
payment provisions are generally of two types: the first requires that all 
collections from Notes Receivable, other than a fixed monthly allowance for
servicing operations, be applied to reduce the Senior Debt; the second requires
a further amount to be applied toward additional principal reduction from 
available cash after scheduled principal and interest payments have been made.  
As a result of the accelerated payment provisions, the Company is repaying the 
amounts due on the Senior Debt at a rate faster than the minimum scheduled 
payments.  However, while the Senior Debt remains outstanding, these accelerated
payment provisions may limit the cash flow available to the Company.  The 
Company has negotiated with one of its Senior Debt lenders a modification of the
existing terms of its funding of cash allowances for operations to improve cash
flows, whereby the Company receives additional availability based upon 
collections after contractual principal, interest and escrow payments are met.  
Management feels this may reduce the periods of irregular cash flows, however, 
there can be no assurance that the Company will not encounter periods of cash 
flow shortages.  

        Certain of the Senior Debt credit agreements required the establishment 
of restricted cash accounts, funded by an initial deposit at the loan closing 
and additional deposits based upon monthly collections up to a specified dollar 
limit.  The restricted cash is maintained in a interest bearing account, at a 
bank which is one of the lenders of the Senior Debt.  Restricted cash may be 
accessed by the Bank only upon the Company's failure to meet the minimum monthly
payment due if collection from Notes Receivable securing the loan is 
insufficient to satisfy the installment due.  Historically, the Company has not 
had to call upon these reserves.  The aggregate balance of restricted cash in 
such accounts was $617,111 at December 31, 1995 and $759,705 at September 30, 
1996. 

        Lines of Credit. Advances are available to the Company by one of its two
Senior Debt lenders to repay loans with security interests in the underlying 
collateral senior to those acquired by the Company and fund property repair 
costs in connection with foreclosures of certain real estate loans financed by 
the Company.  Management believes the ultimate sale of these properties will 
satisfy the outstanding lines of credit and accrued interest, as well as surpass
the collectible value of the original secured notes receivable because the 
Company typically purchases loans having an outstanding balance well below the 
assumed value of the underlying collateral.  Management has an agreement with 
its Senior Debt lender to increase the line to cover the carrying costs of 
properties obtained through foreclosures which the Company may be required to 
hold as rental property to maximize its return.  The total amounts outstanding 
under the lines of credit as of September 30, 1996 and December 31, 1995, were 
$748,920 and $1,324,128, respectively.  The agreement with the Senior Debt 
lender allows the Company to borrow a maximum of $1,500,000 at a rate equal to 
the bank's prime rate plus two percent per annum.  Principal repayment of the 
lines are due six months from the date of each cash advance and interest is 
payable monthly. 

        12% Debentures.  In connection with the acquisition of a loan portfolio 
during 1994 the Company offered to investors $750,000 in subordinated debentures
(the "12% Debentures").  As of September 30, 1996 and December 31, 1995, 
$528,750 and $705,000 respectively, of these debentures were outstanding.  The 
12% Debentures bear interest at the rate of 12% per annum payable in quarterly 
installments.  The principle is to be repaid over 4 years in 16 equal quarterly
installments of $44,062 commencing March 31, 1996.  The 12% Debentures are 
secured by a lien on the Company's interest in certain notes receivable and are
subordinated to the Senior Debt encumbering the loan portfolio. 

        Harrison First Corporation 12% Debentures.  In connection with the 
acquisition of a loan portfolio during 1995, the Company offered to investors 
$800,000 in subordinated debentures (the "Harrison 1st 12% Debentures").  As of 
September 30, 1996 and December 31, 1995, there were $555,000 and $575,000 of 
theses debentures outstanding, respectively.  The Harrison 1st 12% Debentures 
bear interest at the rate of 12% per annum payable in quarterly installments. 
The principal is to be repaid over five years in eleven equal quarterly 
installments of $22,200 commencing September 30, 1997 with the remaining balloon
payment of $310,800 due on June 30, 2000.  The Harrison 1st 12% Debentures are 
secured by a lien on the Company's interest in certain notes receivable and are
subordinate to the Senior Debt encumbering the loan portfolio. 

        Limited Partnerships.  The Company was the general partner of seventeen
limited partnerships which were active during 1995.  The limited partnerships 
had obtained capital to purchase Loan Portfolios primarily from one or a 
combination of the following sources:  (i) equity contributions or loans from 
the Company and its principal stockholders, (ii) the sale of limited partnership
interests to third parties, and (iii) loans from banks or finance companies 
including portfolios of the Senior Debt.  During 1995 the Company purchased the 
interests of all remaining limited partners and liquidated all limited 
partnerships.  The loss upon liquidation for 1995 was $247,105.  Gains realized 
from limited partnership interests purchased from limited partners who also had 
an ownership interest in the Company were recorded as additional paid in capital
in the amount of $144,579. 



                                     13 
<PAGE>
        Management plans to continue to use bank financing, credit lines and 
private sources of equity to fund future Loan Portfolio acquisitions.  
Management believes the Registrant can acquire debt from financial 
institutions on more favorable terms than can be obtained from individuals 
investing in limited partnerships. 

        Management is evaluating the possibility of broadening the Company's 
activities to include mortgage origination in the markets currently served by 
the Company.  Management currently expects that any such originations would be 
funded through existing credit facilities. 

        Certain statements contained in this discussion may be deemed forward
looking statements that involve a number of risks and uncertainties.  Among the 
factors that could cause actual results to differ materially are the following: 
unanticipated changes in the U.S. economy, business conditions and interest 
rates and the level of growth in the finance and having markets, the 
availability for purchase of additional loans, the status of relations between 
the Company and its primary sources for loan purchases, and other risks detailed
from time to time in the Company's SEC reports, including but not limited to 
the report on Form 10-K for the year ended December 31, 1995. 


                                    14 
<PAGE>

                          PART II  -  OTHER INFORMATION 

Item 1.  Legal Proceedings. 

        On September 18, 1996, the Company reached a settlement with Dinsmore &
Shohl, holder of a prepetition claim for $88,000 against the Company's 
predecessor, Miramar Resources, Inc., ("Miramar").  Pursuant to the Plan of 
Reorganization of Miramar, the Company had reserved the full amount of such 
claim, and since the confirmation of the Plan of Reorganization, had accrued 
interest of 6% per annum, or approximately $13,000, on such reserve.  Under the 
settlement, the Company will pay to Dinsmore & Shohl $40,000 in respect of such 
claim, resulting in a gain from litigation of approximately $61,000. 

        On September 29, 1996, the Company reached a settlement with Grant 
Thornton LLP, ("Grant") who had been Miramar's auditors for Miramar's fiscal 
years 1989 and 1990, on certain claims and counterclaims between the Company and
Grant.  Pursuant to the settlement, Grant will pay the Company $7,500, and the 
Company and Grant will enter into mutual releases. 
         
Item 2.  Changes in Securities 
               None 

Item 3.  Defaults Upon Senior Securities 
               None 

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

Item 5.  Other Information. 

        Effective November 1, 1996, the Company started a 401(k) Saving Plan for
its employees.  The plan is solely funded by pre-tax employee earnings, however
the Company has no plans to make contributions. 

Item 6.  Exhibits and Reports on Form 8-K. 
                                                       
(a)      
                                                EXHIBIT TABLE 
               Exhibit 
               No.                        Description 

               3(a)          Restated Certificate of Incorporation of Franklin 
                             Credit Management Corporation. 
  
                (b)          Bylaws of Registrant.  
                
               4(a)          15% Convertible Subordinated Debentures  

                (b)          Warrants associated with principal repayments of 
                             the 15% Convertible Subordinated Debentures 
                                                    
                
(b)     No reports on Form 8-K were filed during the third quarter of 1996. 


                                      15 
<PAGE>
                                  SIGNATURES 

        In accordance with Section 13 or 15(d) of the Exchange Act, the 
registrant caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized. 

November 14, 1996                FRANKLIN CREDIT MANAGEMENT CORPORATION 



                                 By:    THOMAS J. AXON 
                                        Thomas J. Axon 
                                        President and Chief Executive Officer  

     In accordance with the Exchange Act, this report has been signed below by 
the following persons on behalf of the registrant and in the capacities and on
the dates indicated. 

Signature                    Title                                 Date 

THOMAS J. AXON              President, Chief Executive       November 14, 1996
Thomas J. Axon              Officer and Director 
                            (Principal executive officer)  


FRANK B. EVANS, Jr.         Vice President, Treasurer,       November 14, 1996
Frank B. Evans, Jr.         Chief Financial Officer and 
                            Director (Principal financial
                            and accounting officer) 



JOSEPH CAIAZZO              Vice President, Chief Operating  November 14, 1996
Joseph Caiazzo              Officer and Director
  


                                       16 
<PAGE>
                                   EXHIBIT INDEX 
Exhibit 
No.                        Description                                  Page 

3(a)      Restated Certificate of Incorporation of Franklin Credit Management  
          Corporation (incorporated by Exhibit 2.1 to Registrant's Annual  
          Report on Form 10-KSB for the year ended December 31, 1994.) 

 (b)      Bylaws of Registrant (incorporated by reference to Registrant's  
          Registration Statement on Form S-4, No. 33-81948) 
                
4(a)      15% Convertible Subordinated Debentures (incorporated by reference to
          Registrant's Registration Statement on Form S-4, No. 33-81948) 

 (b)      Warrants associated with the principal repayments of the 15% 
          Convertible Subordinated Debentures (incorporated by reference to 
          Registrant's Registration Statement on Form S-4, No. 33-81948) 



                                     17 
<PAGE>