===============================================================================




                                  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 June 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 August 16, 2004 the issuer had  5,916,527 of shares of Common  Stock, par
value $0.01 per share, outstanding.

===============================================================================


<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 June 30, 2004 and
         December 31,2003                                             3

         Consolidated Statements of Income for the three and
         six months ended June 30, 2004 and June 30, 2003             4

         Consolidated Statements of Stockholders'Equity for
         the six months ended June 30, 2004                           5

         Consolidated Statement of Cash Flows for the six
         months ended June 30, 2004 and June 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                                           26

Item 2.  Changes in Securities and Use of Proceeds and
         Issuer Purchases of Equity Securities                       26

Item 3.  Defaults Upon Senior Securities                             26

Item 4.  Submission of Matters to a Vote of Security Holders         26

Item 5.  Other Information                                           26

Item 6.  Exhibits and Reports on Form 8-K                            27

SIGNATURES                                                           28

CERTIFICATIONS                                                    29-32

<PAGE>
<TABLE>
<CAPTION>
<S>                                       <C>                   <C>
CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------
ASSETS                                    June 30, 2004       December 31, 2003
                                            Unaudited                audited


CASH AND CASH EQUIVALENTS                 $ 12,674,008         $ 14,418,876 08

RESTRICTED CASH                                 98,322                 413,443

NOTES RECEIVABLE:
  Principal                                 761,223,426            465,553,870
  Purchase discount                         (36,635,703)           (25,678,165)
  Allowance for loan losses                 (74,694,164)           (46,247,230)
                                           ------------            ------------
        Net notes receivable                649,893,559            393,628,475

ORIGINATED LOANS HELD FOR SALE               49,695,134             27,372,779

ORIGINATED LOANS HELD FOR INVESTMENT          9,222,003              9,536,669

ACCRUED INTEREST RECEIVABLE                   7,257,286              4,332,419

OTHER REAL ESTATE OWNED                      11,969,034             13,981,665

OTHER RECEIVABLES                             3,355,700              2,893,735

MARKETABLE SECURITIES                           202,071                202,071

DEFERRED TAX ASSET                              452,092                681,398

OTHER ASSETS                                  3,963,907              3,720,163

BUILDING, FURNITURE AND EQUIPMENT - Net       1,233,398              1,252,711

DEFERRED FINANCING COSTS- Net                 6,514,143              4,298,942
                                          -------------          --------------
TOTAL ASSETS                              $ 756,530,657          $ 476,733,346
                                          =============          ==============
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Accounts payable and accrued expenses     $ 4,471,678            $ 4,979,806
  Financing agreements                       37,068,102             23,315,301
  Notes payable                             691,316,337            427,447,844
  Income tax liability:
     Current                                    -                        -
     Deferred                                   320,920              1,311,089
                                           ------------            ------------
           TOTAL LIABILITIES                733,177,037            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                          16,308,485              12,634,171
                                          -------------           -------------
           TOTAL STOCKHOLDERS' EQUITY        23,353,620              19,679,306
                                          -------------           -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                      $ 756,530,657           $ 476,733,346
                                          =============           =============

See notes to consolidated financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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


                                 Three Months                 Six Months
                                 Ended June 30                Ended June 30
                               2004          2003         2004          2003
<S>                            <C>          <C>         <C>         <C>
                           -----------  -----------   -----------   -----------
REVENUES:
 Interest income           $11,354,267  $10,722,418   $21,990,608   $21,283,669
 Purchase discount earned    1,727,781    1,078,019     3,069,178     1,980,922
 Gain on sale of notes
 receivable                     -            -            844,902       596,114
 Gain on sale of originated
 loans held for sale         1,252,474     728,654      2,145,429     1,407,044
 Gain on sale of other real
 estate owned                  142,151     449,399        373,397       753,194
 Rental income                  11,875      23,338         23,950        73,800
 Prepayments and other
 income                      1,298,618     956,125      2,399,467     1,802,438
                            ----------  ----------     ----------    ----------
                            15,787,166  13,957,953     30,846,931    27,897,181
                            ----------  ----------     ----------    ----------

OPERATING EXPENSES:
 Interest expense            5,481,129   5,575,748     10,794,204    10,612,870
 Collection, general and
 administrative              5,747,221   4,411,539     10,193,403     8,519,096
 Provision for loan losses     812,383     734,851      1,708,259     1,584,445
 Amortization of deferred
 financing costs               560,226     417,078      1,153,127       840,391
 Depreciation                  136,242     107,161        249,624       207,459
                            ----------  ----------     ----------    ----------
                            12,737,201  11,246,377     24,098,617    21,764,261
                            ----------  ----------     ----------    ----------


INCOME BEFORE PROVISION
FOR INCOME TAXES             3,049,965   2,711,576      6,748,314     6,132,920
                            ----------  ----------     ----------    ----------

PROVISION FOR INCOME TAXES   1,409,000   1,282,500      3,074,000     2,856,300
                            ----------  ----------     ----------    ----------

NET INCOME                 $ 1,640,965 $ 1,429,076    $ 3,674,314   $ 3,276,620
                           =========== ===========    ===========   ===========

NET INCOME PER COMMON SHARE:
  Basic                    $      0.28 $      0.24    $      0.62   $      0.55

  Diluted                  $      0.25 $      0.22    $      0.56   $      0.49

                           =========== ===========    ===========   ===========
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   6,591,219   6,557,239      6,599,625    6,557,239
                           =========== ===========    ===========   ===========


See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
JUNE 30, 2004 (Unaudited)
-------------------------------------------------------------------------------

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

  Net income                                            3,674,314     3,674,314

                  -------------------------------------------------------------
June 30, 2004     5,916,527   $59,167    $6,985,968   $16,308,485   $23,353,620

                  =============================================================


See notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
-------------------------------------------------------------------------------

                                                   Six Months Ended June 30,
                                                      2004              2003

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                              <C>              <C>
Net income                                       $ 3,674,314      $ 3,276,620
 Adjustments to reconcile net income
 to net cash used in operating activities:
  Gain on sale of notes receivable                   (844,902)        (596,114)
  Gain on sale of other real estate owned            (373,397)        (753,194)
  Depreciation                                        249,624          207,459
  Amortization of deferred financing costs          1,153,127          840,391
  Origination of loans held for sale              (80,178,341)     (42,101,242)
  Proceeds from the sale of and principal
  collections on loans held for sale-net of gain   55,617,504       37,820,001
  Purchase discount earned                         (3,069,178)      (1,980,922)
  Provision for loan losses                         1,708,259        1,584,445
  Changes in operating assets and liabilities:
   Accrued interest receivable                     (2,924,867)          43,234
   Other receivables                                 (461,965)      (1,846,619)
   Deferred tax asset                                 229,306          (92,858)
   Other assets                                      (243,744)        (588,515)
   Deferred tax liability                            (990,169)        (348,454)
   Accounts payable and accrued expenses             (508,128)         133,590
                                                  ------------     ------------
    Net cash used in operating activities         (26,962,557)      (4,402,178)
                                                  ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Decrease in restricted cash                          315,121          131,931
 Purchase of notes receivable                    (351,596,126)    (112,718,301)
 Principal collections on notes
 receivable and loans held for investment          85,308,403       66,423,015
 Acquisition and loan fees                         (3,308,399)      (1,346,543)
 Proceeds from sale of other real estate owned     10,550,854        7,500,632
 Proceeds from sale of notes receivable             6,556,853        2,835,696
 Purchase of building, furniture and equipment       (230,311)        (347,902)
                                                 -------------     -----------
    Net cash used in investing activities        (252,403,605)     (37,521,472)
                                                 -------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                      378,109,100      118,389,550
 Principal payments of notes payable             (114,240,607)     (82,146,129)
 Proceeds from financing agreements                82,346,598       45,852,206
 Principal payments of financing agreements       (68,593,797)     (41,666,966)
                                                 -------------     ------------
Net cash provided by financing activities         277,621,294       40,428,661
                                                 ------------      ------------

NET CHANGE IN CASH AND CASH EQUIVALENTS.           (1,744,868)      (1,494,989)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     14,418,876       10,576,610

                                                 ------------      ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD         $ 12,674,008      $ 9,081,621
                                                 ============      ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash payments for interest                       $ 10,876,632     $ 10,277,680
Cash payments for taxes                          $  3,807,300     $  3,285,985
</TABLE>


<PAGE>



FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
-------------------------------------------------------------------------------

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 in 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 prior year amounts have been reclassified to conform
with the current year 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.
<PAGE>

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.

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 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.  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.  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
advantages to do so.

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 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 is reasonably estimable.  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.
<PAGE>

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 a provision for loan
losses charged to expense and 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 a concentration 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 certain specific market
conditions.  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 $74,694,164 and
$46,247,230 is included in notes receivable at June 30, 2004 and December 31,
2003, respectively.

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.


<PAGE>

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.


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 fair value of notes receivable at June 30, 2004 and December 31, 2003
      was $649,893,559 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.

<PAGE>

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 six months ended June 30,
2004 and June 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
June 30, 2004 and June 30, 2003 net income and earnings per share would have
been reduced to the pro forma amounts indicated in the table that follows.

There were no options granted during the three or six months ended June 30,
2004.
<TABLE>
<CAPTION>
                                              Three months       Three months
                                                2004                  2003

<S>                                         <C>                    <C>
Net income  - as reported                   $ 1,640,965            $ 1,429,076
Net income  -  pro forma                    $ 1,633,840            $ 1,409,658

Net income  per common share
- basic - as reported                       $      0.28            $      0.24
Net income per common share
- basic - pro forma                         $      0.28            $      0.24
Net income per common share
- diluted - as reported                     $      0.25            $      0.22
Net income per common share
- diluted - pro forma                       $      0.25            $      0.21

</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                                            Six Months             Six Months
                                               2004                   2003

<S>                                        <C>                     <C>
Net income  - as reported                  $ 3,674,314             $ 3,276,620
Net income  -  pro forma                   $ 3,660,064             $ 3,240,688

Net income  per common share
- basic - as reported                      $      0.62             $      0.55
Net income per common share
- basic - pro forma                        $      0.62             $      0.55
Net income per common share
- diluted - as reported                    $      0.56             $      0.50
Net income per common share
- diluted - pro forma                      $      0.56             $      0.49


</TABLE>


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.
As it applies to the Company,  FIN 46(R) will be immediately effective for all
variable interests in variable interest entities created after December 31, 2003
, and to all variable interest entities on December 31,  2004.  The adoption of
Interpretation No. 46(R) is expected to have 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 June 30,
                                                 2004               2003
<S>                                             <C>                 <C>
CONSOLIDATED REVENUE
  Portfolio asset acquisition and
  resolution                                 $ 12,956,448        $ 12,238,233

  Mortgage banking                              2,830,718           1,719,720
                                             ------------        ------------
Consolidated Revenue                         $ 15,787,166        $ 13,957,953
                                             ============        ============

CONSOLIDATED  INCOME BEFORE INCOME TAXES
  Portfolio asset acquisition and
  resolution                                 $  2,450,982        $  2,435,655
  Mortgage banking                                598,983             275,921
                                             ------------        ------------
Consolidated Income before income taxes      $  3,049,965        $  2,711,576
                                             ============        ============
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                 Six Months Ended June 30,
                                                 2004                2003
<S>                                             <C>                 <C>
CONSOLIDATED REVENUE
  Portfolio asset acquisition and
  resolution                                 $ 25,754,285        $ 24,553,980
    Mortgage banking                              5,092,646           3,343,201
                                             ------------        ------------
Consolidated Revenue                         $ 30,846,931        $ 27,897,181
                                             ============        ============

CONSOLIDATED INCOME BEFORE INCOME TAXES
  Portfolio asset acquisition and
  resolution                                 $  5,722,329        $  5,532,211
  Mortgage banking                              1,025,985             600,709
                                             ------------        ------------
Consolidated Income before income taxes      $  6,748,314        $  6,132,920
                                             ============        ============
</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.

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 1% loan origination fee.
On June 30, 2004, the Company consummated a single  purchase of a mixed pool of
$310,431,219 in face amount of  performing, sub-performing and nonperforming
mortgage loans secured by single-family residences, from Bank One.  The loans
acquired include $245,973,970 face amount of first mortgage loans and
$64,457,249 face amount of second mortgage loans. 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 six month periods ended June 30, 2004 and 2003:
<TABLE>
<CAPTION>

                                                 Quarter ended June 30,
                                                  2004              2003

<S>                                                 <C>                  <C>
Number of Loans                                     8,111                866

Unpaid Principal Balance at Acquisition     $ 368,179,775       $ 63,732,822

Purchase Price                              $ 312,603,653       $ 56,631,233

Purchase Price Percentage                              85%                89%
</TABLE>


<TABLE>
<CAPTION>

                                                   Six months ended June 30
                                                    2004            2003

<S>                                                 <C>                <C>
Number of Loans                                     9,527              1,866

Unpaid Principal Balance at Acquisition     $ 416,057,515      $ 129,828,840

Purchase Price                              $ 351,596,126      $ 112,691,679

Purchase Price Percentage                              85%                87%

</TABLE>

Single-Family Residential Lending.  Since commencing operations in 1997, Tribeca
has originated  approximately $327 million in loans.  The following table sets
forth the number of loans and original aggregate principal balance of loans
originated during the three and six month periods ended June 30, 2004 and
June 30, 2003:
<PAGE>
<TABLE>
<CAPTION>

                                                    Quarter ended June 30,
                                                     2004             2003

<S>                                                    <C>               <C>
Number of Loans                                        294               144

Original Principal Balance                    $ 46,901,063      $ 24,672,190
</TABLE>


<TABLE>
<CAPTION>

                                                  Six months ended June 30
                                                    2004              2003

<S>                                                    <C>               <C>
Number of Loans                                        517               233

Original Principal Balance                    $ 80,178,341      $ 41,966,242
</TABLE>


During the six months ended June 30, 2004, Tribeca had income before  taxes of
$1,025,985  as compared to $600,708 during the six months ended June 30, 2003.
This increase in income reflected the increased volume of loans originated due
to the expansion of offices in New York and New Jersey and increased sales at
higher margins due to a new marketing  campaign  during the six months ended
June 30, 2004.

As of June 30, 2004, Tribeca had approximately $50 million face value of loans
held for sale and $9.4 million held for investment.

Cost of Funds. As of June 30, 2004, the Company owed an aggregate of $691
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.  From December 31,
2001 until March 2003, the Company's Senior Debt incurred after March 1, 2001,
accrued  interest at the Federal Home Loan Bank of  Cincinnati  ("FHLB")
thirty-day advance rate (the "Index") plus a spread of 3.25%(the "Spread").
Senior Debt incurred  before March 1, 2001 accrued interest at the prime rate
plus a margin of between 0% and 1.75%.  On March 19, 2003, the Company and its
Senior Debt lender agreed that  thereafter (i) the Spread would be 3.5%, unless
and until the Index exceeds 2.00%, at which point it will revert  back to 3.25%
and (ii) the Spread will be reduced to 3.00% from and after such time as the
Index exceeds 4.75%.  At June 30, 2004, approximately $27 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
June 30, 2004, the weighted average interest rate on Senior Debt was 4.79%.

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


<PAGE>

Results of Operations


Three Months Ended June 30, 2004 Compared to Three Months Ended June 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
$1,829,213 or 13%, to $15,787,166 during the three months ended June 30, 2004,
from $13,957,953 during the three months ended June 30, 2003.

  Interest income increased by $631,849 or 6%, to $11,354,267  during the three
months ended June 30, 2004 from $10,722,418 during the three months ended June
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
June 30, 2004, which was offset by prepayments, collections and loan sales.

  Purchase discount earned increased by $649,762 or 60%, to  $1,727,781 during
the three months ended June 30, 2004, from $1,078,019 during the three months
ended June 30, 2003.  This increase reflected an increase in prepayments during
the three months ended June 30, 2004 as compared to the three months ended
June 30, 2003.

  Gain on sale of loans originated by Tribeca increased by $523,820 or 72% to
$1,252,474 during the three months ended June 30, 2004,  from  $728,654 during
the three months ended June 30, 2003.  This increase is based on both the
increase in the volume of loans sold and  increased  margins received at point
of sale due to increased marketing during the three months ended June 30,
2004,  compared to the three months ended June 30, 2003.  The Company sold $31
million of loans originated during the three months ended June 30, 2004 as
compared to $21 million during the three months ended June 30, 2003.

  Gain on sale of OREO decreased by $307,248 or 68% to $142,151 during the three
months ended June 30, 2004 from $449,399 during the three months ended June 30,
2003.  The Company sold 78 and 67 OREO  properties during the three months ended
June 30, 2004 and June 30, 2003, respectively.  This decrease reflected a
decrease in the quality of a few OREO properties sold during the three months
ended June 30, 2004.


  Prepayment  penalties  and other  income  increased  by $342,493 or 36%, to
$1,298,618 during the three months ended June 30, 2004 from $956,125 during the
three months ended June 30, 2003. The increase was due primarily to increases in
prepayment penalties resulting from an increase in prepayments,  increased 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 $1,490,824  or 13% to  $12,737,201
during the three  months ended June 30, 2004 from  $11,246,377 during the three
months ended June 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 decreased by $94,619 or 2%, to $5,481,129 during the three
months ended June 30, 2004, from  $5,575,748 during the three months ended June
30, 2003.  This decrease resulted  primarily from a decrease in costs of funds.
The  weighted average cost of funds was 4.79% and 4.98% during the three months
ended June 30, 2004 and June 30, 2003, respectively.

     Collection,  general and  administrative  ("CG&A")  expenses increased  by
$1,335,682 or 30% to $5,747,221 during the three months ended June 30, 2004 from
$4,411,539 during the three months ended June 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 $628,270 or 28% to $2,882,691
during the three  months ended June 30, 2004 from  $2,254,421  during the three
months  ended June 30,  2003.  This increase  resulted  largely from a $412,500
settlement  paid  to  the  Company"s  former CEO,   increases  in  staffing  in
anticipation of expected  growth in the portfolio and increased commissions due
to increased loan originations. All other CG&A expenses increased by $707,412 or
33% to  $2,864,530 during the three months ended June 30, 2004 from  $2,157,118
during the three months ended June 30, 2003.  This increase resulted  primarily
from  increased  advertising  expense for Tribeca,  increased legal expenses on
forecloserses and increased professional expense due to recruiting fees for
a new CEO and servicing staff.

  Provisions for loan losses  increased by $77,532 or 11% to $812,383  during
the three months ended June 30, 2004 from $734,851 during the three months ended
June 30, 2003. This increase resulted primarily from increased write-offs during
the three month ended June 30, 2004 as compared to the three months  ended June
30, 2003.

  Amortization  of deferred  financing costs increased by $143,148 or 34% to
$560,226 during the three months ended June 30, 2004,  from $417,078 during the
three  months ended June 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.


<PAGE>

  During the three  months  ended June 30, 2004 the Company  made a provision
for income taxes of $1,409,000 as compared to $1,282,500 during the three months
ended June 30, 2003.  The effective tax rate for the three months ended June 30,
2004 and June 30, 2003 46%.


  The Company's net income increased by $211,889 or 15% to $1,640,965  from
$1,429,076 primarily for the reasons set forth above.



Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003.

  Total revenue increased by $2,949,750 or 11%, to $30,846,931 during the six
months ended June 30, 2004, from  $27,897,181  during the six months ended June
30, 2003.

  Interest income increased by $706,939 or 3%, to $21,990,608  during the six
months ended June 30, 2004 from $21,283,669 during the six months ended June 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 June 30,
2004, which was offset by prepayments, collections and loan sales.

  Purchase  discount  earned  increased by $1,088,256 or 55%, to  $3,069,178,
during the six months ended June 30, 2004 from $1,980,922 during the six months
ended June 30, 2003. This increase reflected an increase in prepayments  during
the six months ended June 30, 2004 as compared to the six months ended June 30,
2003.

  Gain on sale of notes  receivable  increased by $248,788 or 42% to $844,902
during the six months ended June 30, 2004 from  $596,114  during the six months
ended June 30, 2003.  The Company consummated  an $6.4 million bulk sale of low
yielding  performing loans at a margin of 13% during the six months  ended June
30, 2004  compared to a $4 million bulk sale of  performing  and  nonperforming
loans at a margin of 13% during the six months ended June 30, 2003.

  Gain on sale of loans originated by Tribeca increased by $738,385 or 52% to
$2,145,429 during the six months ended June 30, 2004 from $1,407,044 during the
six months ended June 30, 2003. This increase reflected an increase in both the
volume and margin received at point of sale on Tribeca loans sold during the six
months ended June 30, 2004,  as compared to the six months ended June 30, 2003.
The Company sold $50 million in loans during the six months ended June 30, 2004
as compared to $37 million in loans during the six months ended 2003.

  Gain on sale of OREO  decreased  by $379,797 or 50% to $373,397  during the
six months  ended June 30, 2004 from  $753,194 during the six months ended June
30, 2003.  Gain on sale of OREO decreased  due to the sale of lower valued OREO
properties  during the six months ended June 30,  2004 as  compared  to the six
months  ended June 30, 2003, when the company sold servarl appreciated rental.
The Company sold 157 and 67 OREO during the six months ended June 30, 2004 and
June 30, 2003, respectively.


<PAGE>

  Prepayment  penalties  and other  income  increased  by $597,029 or 33%, to
$2,399,467 during the six months ended June 30, 2004 from $1,802,438 during the
six months ended June 30, 2003.  The increase was due primarily to increases in
prepayment penalties resulting from to 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 $2,334,356 or 11%, to  $24,098,617
during the six months  ended June 30,  2004,  from  $21,764,261, during the six
months ended June 30, 2003.

  Interest expense increased by $181,334 or 2%, to $10,794,204 during the six
months ended June 30, 2004 from $10,612,870 during the six months ended June 30,
2003. This increase resulted primarily from an increase in the average amount of
debt outstanding partially offset by a decrease in costs of funds. The weighted
average  cost of funds was 4.79% and 4.98% during the six months ended June 30,
2004 and June 30, 2003.

  "CG&A" expenses  increased by $1,674,307 or 20%, to $10,193,403  during the
six months ended June 30, 2004 from $ 8,519,096 during the six months ended June
30, 2003.

  Within CG&A, personnel expenses increased by $860,129 or 20%, to $5,210,623
during the six months ended June 30, 2004 from $4,350,494 during the six months
ended June 30, 2003. This increase resulted largely from the $412,500 settlement
paid to the Company"s  former CEO, increased  commissions due to increased loan
production and additions to legal and servicing staff.  All other CG&A expenses
increased by $814,178 or 20%, to $4,982,780 during the six months ended June 30,
2004 from  $4,168,602 during the six months ended June 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 $123,814 or 8% to $1,708,259 during
the six months ended June 30, 2004 from $1,584,445  during the six months ended
June 30, 2003. This increase resulted primarily from increased write-offs during
the six months ended June 30, 2004 as compared to the six months ended June 30,
2003.

  Amortization  of deferred  financing costs increased by $312,736 or 37%, to
$1,153,127 during the six months ended June 30, 2004,  from $840,391 during the
six  months  ended  June 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 six months ended June 30, 2004 the Company made a provision  for
income taxes of $3,074,000 as compared to $2,856,300 during the six months ended
June 30, 2003.  The effective tax rate for the three months ended June 30, 2004
was 45.5% and 46% respectively.

  The  Company's net income  increased by $397,694 or 12% to $3,674,314 from
$3,276,620 primarily for the reasons set forth above.


<PAGE>


Financial Condition

Notes Receivable Portfolio- As of June 30, 2004, the Company"s notes
receivable portfolio included  approximately 17,798 loans with an aggregate
principal of $761 million.  An allowance for loan losses of approximately $75
million has been recorded against this principal amount.  The following table
provides a breakdown of the portfolio as of June 30, 2004 and December 31, 2003
 respectively:

<TABLE>
<CAPTION>

                                          June 30, 2004      December 31, 2003

<S>                                        <C>                <C>
Performing loans                           $321,745,569       $ 322,345,537
Allowance for loan losses                    14,798,639          15,584,769
                                           ------------       -------------
Total performing loans
Net of allowance for loan losses           $306,946,930       $ 306,760,768
                                           ------------       -------------

Impaired loans                             $118,816,983       $ 126,341,722
Allowance for loan losses                    30,758,572          30,111,278

Total impaired loans,                      ------------       -------------
Net of allowance for loan losses           $ 88,058,411       $  96,230,444
                                           ------------       -------------

Not recorded onto servicing system         $320,660,873       $  16,866,611
Allowance for loan losses                    29,136,952             551,183
                                           ------------       -------------
Not recorded onto servicing system
Net of allowance for loan losses           $291,523,921       $  16,315,428
                                           ------------        ------------
Notes receivable, net of allowance
for loan losses                            $686,529,262       $ 419,306,640
                                           ============       =============

</TABLE>



<PAGE>

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 June 30, 2004 and December 31, 2003 of $320,660,873 and
$16,866,611, respectively:

<TABLE>
<CAPTION>


                                          June 30, 2004       December 31, 2003
<S>                                        <C>                  <C>
Total Performing Loans
Total Fixed Rate Performing Loans          $189,713,251         $ 199,691,299
                                           ============         =============
Total Adjustable Rate Performing Loans     $117,233,679         $ 107,069,469
                                           ============         =============
Total Impaired Loans
Total Fixed Rate Impaired Loans            $ 52,790,026         $  58,752,534
                                           ============         =============
Total Adjustable Rate Impaired Loans       $ 35,268,385         $  37,477,910
                                           ============         =============

</TABLE>

Liquidity and Capital Resources

General-  During the six months ended June 30, 2004, the Company purchased 9,525
loans with an aggregate face amount of $416 million at an  aggregate purchase
price of $352  million or 85% of the face value.  During the six months ended
June 30,  2003,  the Company purchased  1,878 loans with an aggregate face
amount of $130 million at an aggregate purchase price of $113 million or 87% of
the face amount.  This increase reflected 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 June 30, 2004, had a face amount
of $761 million and included net notes receivable of approximately $650 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.


<PAGE>

During the six months ended June 30, 2004, the Company used cash in the amount
of $27 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 partially offset
by proceeds from the sale of originated loans.  The Company used $252 million of
cash in its investing  activities,  which reflected  primarily the use of $352
million for the purchase of notes receivable offset by principal collections of
its notes receivable of $85 million and proceeds from sales of notes receivable
of $7 million and OREO of $11 million.  Net cash provided by financing
activities was $278 million primarily from a net increase in Senior Debt of $264
million and a net $14 million increase in financing agreements.  The above
activities resulted in a net decrease in cash at June 30, 2004 over December
31, 2003 of $1.7 million.

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 June 30, 2004 and December  31, 2003, the Company held OREO recorded in
the consolidated financial statements at $12 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 June 30, 2004
has a net realizable value (market value less estimated commissions and legal
expenses associated with the disposition of the asset) of approximately  $13
million based on market analyses of the individual properties less the
estimated closing costs.


Cash Flow From Operating and Investing Activities

  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 June 30, 2004, the Company had  unrestricted  cash, cash equivalents and
marketable securities of $13 million.


Cash Flow From Financing Activities

Senior Debt.  As of June 30, 2004, the Company owed an aggregate of $691 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. The Senior Debt accrues interest based on the Federal Home Loan
Bank of  Cincinnati  (FHLB)  30-day  advance rate plus an  additional spread of
3.50%.  Approximately $27 million of Senior Debt will accrue interest at a rate
equal to the prime rate plus a margin of between 0% and 1.75%.  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, and the second
requires a weekly  additional  principal  reduction from cash collected  before
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 contractual scheduled payments.  While the
Senior Debt remains outstanding, these accelerated payment provisions may limit
the cash flow that is available to the Company.


<PAGE>

In February 2004, the Company negotiated with its Senior Debt Lender a
modification to the Senior Debt obligation, pursuant to which the Senior Debt
Lender has provided the Company with an increase to $550 million in Senior Debt
availability for the duration of 2004. In June 2004, prior to the purchase of
the $310 million pool{s} of loans, the Senior Debt Lender secured a commitment
from another bank (the "Senior Debt Participant") to participate in $175 million
of Senior Debt related to the purchase of this pool of loans ("Senior Debt
Participation"). The Senior Debt Participation is not available for the purchase
of other loans once paid down. The Senior Debt Lender has advised the Company
that the amount of this commitment will be considered in determining the amount
of Senior Debt availability. As a result, the Senior Debt availability from the
Senior Debt Lender including commitments from participants was approximately
$725 million as of June 30, 2004, leaving approximately $34 million available
to purchase additional portfolios of notes receivable and OREO subject to the
normal credit approval process of the Senior Debt Lender. Management believes
that projected collections of notes receivable and proceeds from the sale of
notes receivable and OREO not associated with the Senior Debt Participation
will enable the Company to purchase additional notes receivable.

  Certain Senior Debt credit agreements required  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
Company used these funds during the six months ended June 30, 2004 to purchase a
small  portfolio  of  credit  card charged  off  loans  from two  sources.  The
restricted cash is maintained in an interest bearing account, with the Company's
Senior Debt Lender.  The aggregate  balance of restricted cash in such accounts
was $98,322 on June 30, 2004 and $413,443 on December 31, 2003.

  Total Senior Debt availability was  approximately  $725 million at June 30,
2004, of which  approximately $691 million had been drawn down as of such date.
As a result,  the Company has approximately  $19 million  available to purchase
additional portfolios of notes receivable and OREO.

  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 June 30, 2004,  Tribeca had drawn down $37 million on the line.  The
Company is actively seeking other sources of financing for Tribeca.

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 six months from the date of each cash advance and
interest is payable monthly.  The total amounts outstanding under the financing
agreements as of June 30, 2004 and December 31, 2003, were $667,114 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.  Management has reached an agreement in principal with its
Senior Debt Lender to increase the availability under this credit facility to
cover additional properties foreclosed upon by the Company, which the Company
may choose to hold as rental property to maximize its return.  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 June
30, 2004 and December 31, 2003 $92,736 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 June 30, 2004.
<TABLE>
<CAPTION>

 <S>                   <C>         <C>        <C>          <C>        <C>
(Amounts in                    Less than
 thousands)         Total        1 Year    1 - 3 Years  3 - 5 Years  Thereafter
-------------------------------------------------------------------------------
Contractual Cash
Obligations:
Notes Payable    $691,316,337 $29,771,469 $116,365,066 $107,997,515 $437,182,287
Warehouse Line     37,068,102  37,068,102      -             -            -
Operating Leases    2,188,284     517,196    1,495,229      175,859       -
Capital Lease         439,613     162,859      276,754       -            -
Employment
Agreements            220,000     220,000      -             -            -
                  ----------- ----------- ------------ ------------ -----------
Total Contractual
Cash Obligations $731,232,336 $67,739,626 $118,137,049 $108,173,374 $437,182,287
                 ============ =========== ============ ============ ===========
</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 $387 million and
$27 million of borrowings outstanding  under this facility at June 30, 2004
(net of the $310 million  purchase on June 30, 2004), a 1% increase in FHLB and
prime rate,  would decrease the Company's  quarterly and six month net income
and net cash flows by approximately $570,000 and $1.1 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 $37 million of borrowings outstanding under this facility at June
30, 2004, a 1% increase in prime rate,  would further  decrease the Company's
quarterly and six month net income and net cash flows by approximately $51,000
and $102,000, 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 June 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.     Changes in Securities, Use of Proceeds and Issuer Purchases of
            Equity Securities
                   None

Item 3.     Defaults Upon Senior Securities
                   None

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

  On May 13, 2004 at the Company's annual meeting the shareholders voted to
elect nine directors to the Company's Board of Directors, and to ratify the
appointment of Deloitte & Touche LLP as the Company's independent public
auditors for the fiscal year ending December 31, 2004.

<PAGE>

<TABLE>
<CAPTION>

<S>                    <C>           <C>      <C>       <C>        <C>
---------------------  ---------  --------  ---------   ---------  ---------
Election of Directors     For     Against   Abstained   No-votes     Total
Director
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Thomas J. Axon         4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Seth Cohen             4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Joseph Caiazzo         4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Michael Bertash        4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Frank B. Evans         4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Alan Joseph            4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Steven W. Lefkowitz    4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
Allan R. Lyons         4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
---------------------  ---------  --------  ----------  ---------  ---------
William F. Sullivan    4,113,371     0        4,486     1,798,670  5,916,527
---------------------  ---------  --------  ----------  ---------  ---------
</TABLE>

<TABLE>
<CAPTION>

 <S>                   <C>            <C>       <C>      <C>         <C>
Independent Public
Auditors                 For      Against    Abstained   No Votes     Total
Deloitte & Touche

LLP                   4,097,887      0         7,081    1,811,559   5,916,527


Item 5.  Other Information
                  None
</TABLE>


<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

(a)                             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(l)         Employment Agreement; dated July 17, 2000, between the Company and
              Seth Cohen. Previously filed with, and incorporated herein by
              reference to, the Company's 10-KSB, filed with the Commission on
              March 31, 2001.
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 Financial 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.


(b)           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.

August 16, 2004

                                  FRANKLIN CREDIT MANAGEMENT
                                        CORPORATION



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



Signature                              Title                        Date

/s/THOMAS AXON                  Chairman of the Board          August 16, 2004
  Thomas Axon
(Chairman of the Board)



/s/ALAN JOSEPH                  Executive Vice President,
 Alan Joseph                        Chief Financial            August 16, 2004
(Principal financial officer)     Officer and Director



<PAGE>


Exhibit 31.1

                      CHIEF EXECUTIVE OFFICER CERTIFICATION

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: August 16, 2004

By   /s/ Thomas Axon
         Thomas Axon
         Chairman of the Board
         Franklin Credit Management Corporation

<PAGE>


Exhibit 31.2

                      CHIEF FINANCIAL OFFICER CERTIFICATION



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: August 16, 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, Thomas Axon, 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 June 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:  August 16, 2004

                                          BY:/s/   Thomas Axon
                                             Name:  Thomas Axon
                                             Title: Chairman of the Board



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 June 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:  August 16, 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.