American Business Financial Services, Inc. Announces $200 Million Mortgage Loan Warehouse Facility

Business Wire, April 2, 2001

Business Editors

BALA CYNWYD, Pa.--(BUSINESS WIRE)--April 2, 2001

Company Also Announces One-Year Extension of

$25 Million Line of Credit

American Business Financial Services, Inc. (Nasdaq:ABFI) today announced that Bear Stearns & Co., Inc. and MBIA Insurance Corporation have together extended a $200 million mortgage loan warehouse facility to a Trust that purchases mortgages originated by affiliates of ABFI.

This facility should enable ABFI to grow its lending subsidiaries, specifically American Business Credit, Inc., Upland Mortgage, and American Business Mortgage Services, Inc.

The facility is being provided by Triple-A One Funding Corp., a commercial paper vehicle sponsored by MBIA Insurance Corporation, which credit enhanced the facility to the highest rating category. Bear Stearns & Co. Inc. is also providing support to the facility.

"We are extremely pleased that Bear Stearns and MBIA partnered to provide us with this facility," said Jeffrey M. Ruben, ABFI Executive Vice President. "The terms of the deal give us optimum flexibility to grow our business, and the partnership between these two highly-regarded companies in granting this line of credit speaks volumes about the kind of company we are building here at ABFI."

According to Ruben, "The deal with Bear Stearns and MBIA establishes yet another full business relationship with a highly respected Wall Street investment banker--Bear Stearns, who led our 2000-4 securitization with co-manager, Morgan Stanley Dean Witter. In addition, the deal continues a new relationship with MBIA, who insured our 2001-1 securitization announced last week."

MBIA is a leader in providing AAA rating credit enhancements on asset-backed securities.

Ruben continued, "Earlier this quarter, Morgan Stanley Dean Witter provided a $200 million mortgage loan warehouse facility to ABFI. Today we are announcing the new $200 million purchase facility with Bear Stearns and MBIA. It is very gratifying that we have established `soup to nuts' business relationships with these outstanding firms--from providing us funds to grow our business on the front-end, to securitizing these loans on the back-end. Together, these firms have become key partners in helping us build our business and to achieve our goal of increasing shareholder value."

In addition to the new credit facility, ABFI announced a one-year extension of the $25 million line of credit established last year with Residential Funding Corp. (RFC), a subsidiary of GMAC Mortgage.

Ruben commented, "We are very happy that RFC has continued to have such confidence in ABFI and is participating in our continued success." The Company also announced that it has terminated the $250 million credit facility from Prudential Securities Credit Corp.,LLC, effective March 31, 2001.

This termination was due to Prudential Securities' previously announced exit from fixed income institutional activities.

American Business Financial Services, Inc. is a diversified financial services holding company operating nationwide, which provides credit services and investment products to consumers and businesses, including business loans, first and second home equity mortgage loans, and subordinated investment notes.

For further information, contact Jeffrey M. Ruben, Executive Vice President, 610/617-5562 , Keith Bratz, VP-Corporate Communications, 610/617-7475, or David R. Evanson, Gregory FCA Communications, 610/649-3604.

Certain statements contained in this press release, which are not historical fact, may be deemed to be forward-looking statements under federal securities laws. There are many important factors that could cause American Business Financial Services, Inc. and its subsidiaries' actual results to differ materially from those indicated in the forward-looking statements.

Such factors include, but are not limited to, general economic conditions, including interest rate risk, future residential real estate values, regulatory changes (legislative or otherwise) affecting the real estate market and mortgage lending activities, competition, demand for American Business Financial Services, Inc. and its subsidiaries' services, availability of funding, loan payment rates, delinquency and default rates, changes in factors influencing the loan securitization market and other risks identified in American Business Financial Services, Inc.'s Securities and Exchange Commission filings.