kl03001.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): February 27,
2009
FRANKLIN
CREDIT HOLDING CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-17771
|
26-3104776
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
101
Hudson Street
Jersey
City, New Jersey
(Address
of Principal Executive Offices)
|
|
07302
(Zip
Code)
|
Registrant’s
telephone number, including area code: (201)
604-4402
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
£
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement.
On February 27, 2009, Franklin Credit
Management Corporation, the registrant’s wholly-owned subsidiary (“Franklin
Credit”) entered into amendments to the Loan Servicing Agreement (the “Bosco
Servicing Agreement”), dated as of May 28, 2008, by and between Franklin
Credit and Bosco Credit LLC (“Bosco”) and the Servicer Tri-Party Agreement
(the “TriParty Agreement”), dated as of May 28, 2008, by and among Franklin
Credit, Bosco, Bosco REO LLC, a subsidiary of Bosco, and The Huntington National
Bank, an administrator for Bosco’s lenders (such amendments together, the
“Amendments”).
Bosco is owned and controlled by Thomas
J. Axon, Franklin Credit’s chairman.
Pursuant to the Bosco Servicing
Agreement and the Tri-Party Agreement, Franklin Credit services approximately
$239 million of residential home equity line of credit mortgage loans for
Bosco. In consideration of its services, Franklin Credit receives
monthly fees based on the unpaid principal balance of the loans subject to
servicing, the collections of principal, and the collections on principal of
seriously delinquent mortgages, as well as various ancillary fees and
reimbursement of certain servicing expenses.
The Amendments revise the order of
priority of distributions to be made by the administrative agent for Bosco’s
lenders. Specifically, the Amendments provide that for the next 12
months, payment of Franklin Credit’s monthly servicing fee will be paid only
after a monthly loan modification fee of $29,166.67 is paid to Bosco’s
lenders.
Additionally, the Amendments provide
that on each monthly payment date, if the aggregate amount of net collections is
less than $1 million, 25% of Franklin Credit’s servicing fee will be paid only
after certain other monthly distributions are made, including, among other
things, payments made by Bosco to repay its third party indebtedness.
The term of this provision is indefinite.
If the anount of collections is
not sufficient to make the required payments in any given month, the unpaid
payments or portions thereof will accrue and become due and payable the next
month.
SIGNATURE
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 hereunto
duly authorized.
FRANKLIN CREDIT
HOLDING CORPORATION
By: /s/ Paul
D.
Colasono
Name: Paul D.
Colasono
Title: Chief
Financial Officer and
Executive Vice
President
Date: March
5, 2009