Rams Mortgage Corporation may be reviving its fortunes, and not through an imminent sale as the market rumour mill suggests.John Kinghorn, chair of Rams, said yesterday the group would pass one milestone this month, with $10 billion in mortgages under management.In an interview yesterday Kinghorn denied the latest version of the perennial rumour that Rams was for sale: "To the contrary," he said.Kinghorn said that Rams settlements in the year to June 2006 were 70 per cent higher than in 2005, due to higher volumes through the broker channel as well as improved trading by the company's network of franchised mortgage shops.He said Rams' earnings were much stronger in the just-completed financial year, though he did not detail what those were."The franchise business model is really starting to kick in, and the cost of funds has fallen significantly."One factor behind the lower cost of funds is Rams' revised funding strategy.Rams has engineered its way as a seller of US dollar denominated securities in the extendible commercial paper market. Kinghorn said Rams was the only Australian issuer in this market, which is dominated by US companies and mortgage conduits. Rams has about US$3.8 billion in CP on issue in this market, funding more than half the group's loans. Term bonds (mostly sold in the European market) and warehouse facilities from National Australia Bank and Royal Bank of Scotland fund the balance of the portfolio.Glenn Goddard, Rams treasurer, said that the "secured liquidity notes", as this style of commercial paper is known in the US debt market, was a "new form of liquidity. In the CP market, you issue the paper, and if you can't roll the note, you call your liquidity provider [a bank] and get liquidity to repay the note holder."With extendible CP there is no liquidity provider. If you can't roll, the person who holds the note is stuck with the CP. The note converts to a new form of note which is repayable within six months."Keiran Brush, the former treasurer of Rams, runs a specialist consultancy in New York managing this aspect of the funding for the mortgage financier.Kinghorn said one possible reason for the talk that Rams was for sale was negotiations between Rams and two banks, as well as with GE Money, for Rams to market a wider range of loans through its franchised outlets.He said the franchises needed access to a wider range of mortgage loan products, and said he expected the outlets may also sell credit cards, consumer leases and car loans as well.