Franklin Credit Management suspends new loans

Nov 15 (Reuters) - Franklin Credit Management Corp FCMC.O said it suspended acquisition and origination of new loans as it reviews reserves for its portfolio of acquired loans amid deteriorating real-estate and mortgage origination credit markets.

The specialty consumer finance company said its lead lender bank suspended funding for new loan acquisition and origination activities. The company said it could face insolvency if it could not reach an agreement with the bank and debt covenants are violated.

Franklin Credit expects the credit review to substantially increase the provision for loan losses for the third quarter. (Reporting by Shikhar Balwani in Bangalore; Editing by Vinu Pilakkott)