American Business Financial Services, Inc. Closes 13Th Consecutive Quarterly Securitization.

Business Editors

BALA CYNWYD, Pa.--(BUSINESS WIRE)--March 26, 2001

Morgan Stanley Dean Witter and Bear Stearns Co-Manage; Company's

Overcollateralization Requirements Continue To Improve

American Business Financial Services, Inc. (Nasdaq:ABFI), a diversified financial services company operating nationwide, today announced that it has closed a $275 million mortgage loan securitization through its three subsidiaries, American Business Credit, Inc., Upland Mortgage, and American Business Mortgage Services, Inc.

The securitization was the Company's 13th consecutive quarterly securitization, and its 19th overall.

This securitization also included a lower overcollateralization requirement than prior securitizations. ABFI believes that the lower overcollateralization levels applicable in this securitization will result in the realization of cash flows more quickly by ABFI than would be realized in the prior quarter's securitization, assuming the securitized loans perform as projected.

ABFI Mortgage Loan Trust 2001-1 consists of fixed rate mortgage loans. Morgan Stanley Dean Witter and Bear Stearns & Co., Inc., as co-managers, sold the certificates representing undivided ownership interests in a Real Estate Mortgage Investment Conduit (REMIC). Senior certificates issued by the Trust are insured by an MBIA Insurance Corporation policy. Because of this credit insurance policy, the senior certificates received an AAA rating from Standard & Poor's, and an AAA rating from Moody's. The Class A-1 certificates carry an interest rate of 6.28%.

In addition, the securitization includes a notional $27.5 million interest-only (I.O.) class. According to Jeffrey M. Ruben, ABFI Executive Vice President, "In essence, this I.O. pulls forward excess cash flow that would have otherwise come to the Company later in the deal. This amount was sold as a AAA-rated security up front, which helps us realize additional proceeds at an attractive funding cost."

"We are extremely pleased that the relationships we began with Morgan Stanley Dean Witter and Bear Stearns continue to grow and flourish, and that this securitization represents our first transaction insured by MBIA," Ruben concluded.

ABFI also announced that additional loans are expected to be securitized this quarter through the use of off-balance sheet facilities, obtained from such companies as UBS Principal Finance, LLC.

American Business Financial Services, Inc., is a diversified financial services holding company, 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. The Company offers its products and services to consumers and businesses nationwide.

For further information, contact Jeffrey M. Ruben, Executive Vice President, 610/617-5562, or Keith Bratz, VP--Corporate Communications, 610/617-7475.

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.