Deal Rids Huntington of Bad Debt
Columbus-based Huntington Bank says it has made a deal with subprime mortgage lender Franklin Credit Management Corporation to get rid of $615 million in bad loans.
The restructuring allows Huntington to take control of the mortgage loans that previously served as the collateral for it's commercial loans to Franklin.
Huntington spokesperson Jeri Grier said the restructuring lets Huntington have more control over what happens with its portfolio.
"It maximizes the value on the return that comes back to Huntington's balance sheet, benefiting our shareholders. Also it benefits the borrows because they can get into more attractive terms than they would have been able to under the former structure. Then Franklin is freed up to continue with their business," Grier said.
Franklin Credit management was a long-time partner of Sky Financial Group. Huntington inherited $1.5 billion in problem Franklin loans when it purchases Sky in 2007.