American Business Financial Services, Inc. Opens Texas Broker Operation

Business Wire, June 16, 2004

PHILADELPHIA -- Acquisition of Certain Assets of ESI Mortgage, LP Represents Continued National Expansion of Company's Loan Origination Business

American Business Financial Services (ABFS) (NASDAQ:ABFI) today announced that it has acquired certain assets of ESI Mortgage, LP, headquartered in Austin, Texas. ESI Mortgage is Texas' oldest subprime wholesale lender, licensed in 24 states.

In a related matter, ABFS announced that Lisa Kelly has been named Senior Vice President of Home American Credit, Inc., d/b/a Upland Mortgage. Kelly had been President of ESI Mortgage, LP.

ABFS Chairman and Chief Executive Officer Anthony J. Santilli said, "We are delighted to have Lisa Kelly and the 35 associates of ESI Mortgage join our expanding broker origination channel. They have extensive experience cultivating solid business relationships with mortgage brokers, which is evident by the position they have enjoyed as Texas' oldest subprime wholesale lender."

"Our new Texas operation fills an important market for us as we establish a national footprint and increase loan origination volume. May 2004 was the third biggest month in ABFS' history with $160 million in loan originations. This month, we believe we are on track to achieve our best production month ever. We are accomplishing this by taking important steps toward fulfilling our goal of increasing loan originations. Specifically, we now have a growing presence in several key states, including California (with two offices), Maryland, and now Texas," Santilli continued. "Lisa Kelly adds her energy and drive to our broker channel, and we believe she and her organization will be a great fit for the Company as we continue to strengthen that channel in support of our adjusted business model."

Kelly comes to ABFS with significant mortgage experience and is well respected in the industry, having served on the boards of the Houston Association of Mortgage Brokers, the Houston Association of Professional Mortgage Women and the Central Texas Association of Mortgage Brokers. In addition, Kelly authors a monthly column for the Mortgage Press, a national broker publication. Prior to joining ESI, Kelly was National Sales Manager for Bank United/ProLend Mortgage, Regional Manager for Aames Capital, and Director of Corporate Development for the National Association of Mortgage Brokers.

According to Kelly, "We are very happy to join the ABFS organization, and view it as a great opportunity to build upon the core values of ESI--that of real service, fast closings, and a focus on broker relationships. ABFS will help fuel our growth through its patent-pending EasyLoan Advisor (ELA) loan structuring system, its mortgage loan warehouse facilities and its broad array of products."

American Business Financial Services, Inc. is a diversified financial services organization operating mainly in the eastern and central portions of the United States. Recent expansion has positioned the Company to increase its operations in the western portion of the United States, especially California and Texas. Through its principal direct and indirect subsidiaries, the Company currently originates, sells and services home equity loans through a combination of channels, including a national processing center located at its centralized operating office in Philadelphia, Pennsylvania. The Company also processes and purchases home equity loans from other financial institutions through its Bank Alliance Services program.

For further information, contact Stephen M. Giroux, Executive Vice President and General Counsel, 215-940-4537, 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.