Accredited Securitizes $707.2 Million of Mortgage Loans under a Newly Formed REIT Subsidiary

Business Wire, May 26, 2004

Business Editors

SAN DIEGO--(BUSINESS WIRE)--May 26, 2004

Accredited Home Lenders Holding Co. (NASDAQ: LEND), a national non-prime mortgage lender based here, has closed a securitization of approximately $707.2 million of first priority residential mortgage loans through Accredited Mortgage Loan REIT Trust, a newly formed real estate investment trust (REIT) subsidiary of Accredited Home Lenders, Inc., the operating subsidiary of Accredited Home Lenders Holding Co. The REIT subsidiary was established this month, primarily to provide flexibility in structuring securitizations and thereby reduce long-term funding costs.

Chairman and CEO Jim Konrath said: "We have created this REIT subsidiary initially as a vehicle to reduce the funding costs for loan securitizations. The REIT subsidiary may also provide Accredited with a number of other potential advantages in future transactions."

The lead manager for the transaction was Credit Suisse First Boston, with Morgan Stanley, Goldman Sachs & Co. and Banc of America Securities acting as co-managers.

Two classes of notes, totaling $684.9 million, were issued in the securitization, each backed primarily by a pledge of one of two groupings of the mortgage loans. The mortgage loans backing the Class A-1 Notes conform to principal balance limits and other investment requirements of Freddie Mac and Fannie Mae.

The notes are guaranteed as to the timely payment of interest and as to specified payments of principal pursuant to the terms of a note insurance policy issued by Financial Guaranty Insurance Company. Each class of the notes is rated "AAA" by Standard & Poor's Ratings Services and "Aaa" by Moody's Investors Service, Inc.

        Original Note                          Price to  Final Stated
Class   Principal Balance      Interest Rate  the Public Maturity Date
A-1     $342,200,000      1 Month LIBOR   0.29%  100%    July 25, 2034
A-2     $342,720,000      1 Month LIBOR   0.30%  100%    July 25, 2034
        ------------
Total   $684,920,000

The securitization is structured as a financing by Accredited with the result being that both the mortgage loans and the debt represented by the notes remain on Accredited's consolidated balance sheet. As payments are made on the underlying mortgage loans over time, Accredited is entitled to amounts remaining after payment of the notes and the expenses of the securitization, and after the satisfaction of certain credit enhancement requirements. Accredited used the proceeds from the securitization primarily to repay warehouse financing for the mortgage loans.

Copies of the prospectus and supplement relating to the notes may be obtained from Accredited's Investor Relations Department, 15090 Avenue of Science, San Diego, CA 92128.

Forward-Looking Statements

Certain matters discussed in this news release constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements regarding anticipated securitizations, funding costs and future transactions. Actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors, including but not limited to: interest rate volatility and the level of interest rates generally; general political and economic conditions; the sustainability of loan origination volumes; the availability of financing for the origination of mortgage loans; the ability of the company and its subsidiaries to sell or securitize mortgage loans; changes in federal and state laws; the ability of the company and its subsidiaries to grow their portfolios and access the capital markets and other risk factors outlined in Accredited Home Lenders Holding Co.'s annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 26, 2004, its report on Form 10-Q filed with the SEC on May 17, 2004 and other SEC filings.

About Accredited Home Lenders

Accredited Home Lenders Holding Co. is a nationwide mortgage banking company that originates, finances, sells, securitizes and services non-prime mortgage loans secured by single-family residences. The company is headquartered in San Diego. Additional information may be found at www.accredhome.com.