Mortgage Industry Veteran Barry P. Epstein Joins American Business Financial Services As Managing Director of Wholesale Lending; Action Bolsters Expansion of Company's Broker Business

Business Wire, Jan 6, 2004

Business Editors

PHILADELPHIA, Pa.--(BUSINESS WIRE)--Jan. 6, 2004

American Business Financial Services, Inc. (NASDAQ:ABFI) today announced that Barry P. Epstein has joined the Company in the newly formed position of Managing Director of Wholesale Lending. Epstein will be responsible for guiding the Company's expanding broker origination efforts, including those of ABFS' subsidiary, American Business Mortgage Services, Inc., headquartered in Roseland, NJ. Epstein comes to ABFS with more than 13 years of leadership experience in building wholesale mortgage divisions, most recently as a principal of Rekaren, Inc., d/b/a We Fund Loans, a West Coast loan broker based in West Hills, California.

In a related matter, ABFS announced that it has acquired certain assets of Rekaren, Inc., d/b/a We Fund Loans. Terms of the asset purchase are not material.

ABFS Chairman and Chief Executive Officer Anthony J. Santilli said, "We are delighted to have Barry Epstein join our management team. His knowledge of and experience in the industry will be a huge asset to our Company. Building our broker business is an essential part of our previously announced adjustments to our business model. We believe his track record of building wholesale mortgage divisions is impressive. His hiring is an important step toward fulfillment of our goal of increasing broker business, especially in the Alt A market."

Epstein's background includes serving as Managing Director and on the Board of Directors of Approved FSB, of Huntington Beach, California. At this financial institution, Epstein built a wholesale Alt A nonconforming mortgage division from the ground up. Prior to this, Epstein was a consultant with Lincolnshire Management, Inc. of New York, New York. He has also served as Senior Vice President of Ocwen Financial Services, a subsidiary of Ocwen Federal Bank of West Palm Beach, Florida. As part of his compensation package with ABFS, Epstein received 200,000 shares of restricted common stock, which vest based upon the achievement of established loan origination production goals.

Santilli said, "We also look forward to the 35 associates of We Fund Loans joining our organization. Its other three principals, Adam Levine, Shawn Denton and Jason Shapiro, have extensive experience in the industry, and will give an immediate boost to our broker business, especially in the state of California, where we have been looking to expand. We believe that this addition to our broker distribution channel will significantly contribute to our loan origination volume going forward." These actions support the Company's previously announced adjusted business model by expanding its broker business.

"ABFS will be able to provide outstanding technical support through our patent-pending EasyLoan Advisor (ELA) loan structuring system, and our brand new UplandBroker.com web site, specifically built for the needs of the subprime mortgage broker," Santilli continued. "In addition, our mortgage loan warehouse facilities and our broad array of products will be available to them and help us gain a foothold in California and other areas."

American Business Financial Services, Inc. is a diversified financial services company operating predominantly in the eastern and central portions of the United States. The Company primarily originates, sells and services home equity and, subject to market conditions in the secondary loan market, business purpose loans through a combination of channels, including a national processing center located at its centralized operating office in Philadelphia, Pennsylvania, and a small processing center in Roseland, New Jersey. The Company also processes and purchases home equity loans from other financial institutions through its Bank Alliance Services program.

For further information, contact Albert W. Mandia, Executive Vice President and Chief Financial Officer, 215-940-4504, or Keith Bratz, VP--Corporate Communications, 215-940-4525.

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 mortgage lending and real estate industries, regulatory investigations of lending practices, lending to credit-impaired borrowers, competition, demand for the Company's products, relationships with brokers, ability to obtain financing, loan prepayment rates, delinquency and default rates, access to securitization markets, changes in factors influencing or interruptions in securitization and whole loan sale markets, ability to successfully implement changes in business strategy, amount of debt outstanding, restrictive covenants in debt instruments and other risks identified in American Business Financial Services, Inc.'s Securities and Exchange Commission filings.