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AMERICAN BUSINESS FINANCIAL SERVICES RESPONDS TO NEW YORK POST COVERAGE

BALA CYNWYD, PA (March 26, 2002) -- In response to what it considers inaccurate and misleading information contained in an article in yesterday's New York Post, management at American Business Financial Services, Inc. (NASDAQ: ABFI) expressed serious concern regarding a variety of issues and the deleterious effect the story can have on its borrowers and investors. Anthony J. Santilli, Chairman and Chief Executive Officer of ABFS said, "We are extremely surprised-and I might say disappointed-not only in the lack of accuracy, but in the seemingly malicious tone of the Post story."

American Business Financial Services makes loans secured by home equity or other real property to homeowners and small business operators who may not qualify for credit from conventional lenders. The Post suggested that ABFS is in the business of making loans to people who often can't pay them back.

"There is not a single allegation made in the New York Post story which could not have been clearly explained if the reporter had simply taken the time to call the company or read the company's public filings," Santilli said.

The creditworthiness of the company's customers can be seen in the delinquency rates of its portfolio. In the sub-prime industry, delinquency rates-in cases where payments are 30 days or more overdue-average more than nineteen percent. At ABFS delinquency rates are running just over six percent. ABFS' delinquency rate is only slightly higher than the four percent rate experienced by lenders to the most credit-worthy borrowers.

ABFS' Santilli takes strong exception to the Post story's characterization of his borrowers as "deadbeats." "To call our borrowers 'deadbeats' is misleading and downright insulting, given our delinquency rate of just over six percent. Many of our customers use our loans to pay down debt and, in the process, make themselves better financial consumers. They represent the core of America's $1 trillion non-conventional mortgage industry."

The Post story falsely implied that ABFS aggressively markets its investment notes to unwary investors. ABFS uses no salespeople to market its investment notes and decisions are made independently by the investors, based on a detailed, comprehensive prospectus filed with the U.S. Securities and Exchange Commission which contains details risk factors. The company has had a program of offering investment notes for more than twelve years and has never missed an interest or principal payment. The Post story used the incorrect term "securitized loan obligations" and qualified it with the term "so-called," implying that this practice was in some way unusual. In fact, securitization transactions are generally accepted financing tools and some of the largest financial institutions in the country routinely securitize their loans.

Testament to the quality of ABFS loan packages is the fact that they are marketed by some of the most prestigious investment bankers in the world, and purchased by quasi-governmental agencies and large institutional investors. In fact, on March 21, ABFS completed a $320 million securitization transaction, bringing its total securitizations to $4 billion.

The New York Post inaccurately characterizes the use of cash and ignores the fact that over the past three-and-a-half years ABFS invested more than $300 million to build a servicing portfolio now approaching $3 billion. This portfolio creates substantial new cash and revenue streams, which will propel the company toward achieving its near-term goal of realizing positive cashflow from operations.

The writer also questioned widely-used gain-on-sale accounting practices. He appeared to be unaware that gain-on-sale accounting is entirely consistent with generally accepted accounting principles (GAAP) and is used by many of America's most prominent financial institutions.

Santilli said, "We believe that the New York Post has done a disservice to our borrowers, to our investors and to its own readers. Newspapers clearly have a responsibility to be accurate in their reporting."

MortgageDaily.com
American Business Financial Services, Inc. is a diversified financial services organization operating throughout the United States. The Company originates business purpose loans and first and second mortgage loans through a combination of channels, including a national processing center located at its centralized operating office in Bala Cynwyd, Pennsylvania, and a retail branch network of offices.

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.

Contact:
Albert W. Mandia, Executive Vice President and Chief Financial Officer
610.617.4939

or Keith Bratz, VP-Corporate Communications
610.617.7475

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