<PAGE>

                                                                    Exhibit 10.9


                                     Patriot
                             The Patriot Group, LLC



                                October 26, 2004

                    America Business Financial Services, Inc.
  Residential Mortgage Loan Warehouse and Residual Master Repurchase Agreement
  ----------------------------------------------------------------------------


American Business Financial Services, Inc.
The Wanamaker Building
100 Penn Square East, 8th Floor
Philadelphia, Pennsylvania  19109

Attention:   Anthony J. Santilli, Chairman, President, Chief Executive Officer
             and Chief Operating Officer

Ladies and Gentlemen:

         Reference is made to (i) the Commitment Letter dated September 17, 2004
executed and delivered by The Patriot Group, LLC, on behalf of itself, its
affiliates and subsidiaries ("Patriot"; also referred to herein as "we" and
"us") to, but not accepted or executed by, American Business Financial Services,
Inc. (together with its affiliates and subsidiaries, "ABFS"; also referred to
herein as "you"; such letter, the "Original Commitment Letter") and (ii) the
letter dated October 6, 2004 executed and delivered by Patriot and ABFS pursuant
to which the parties agreed, among other things, to continue our discussions
concerning certain facilities that Patriot would consider entering into with
ABFS (the "Extension Letter").

         Patriot would be pleased and is prepared to proceed with ABFS toward a
facility (the "Committed Facility") on the terms contained in this letter
agreement (the "Commitment Letter") and in the Summaries of Terms and Conditions
attached as Exhibit A-1 and Exhibit A-2 hereto and incorporated herein by
reference (collectively, the "Commitment Terms"). As provided in the Commitment
Terms, the Committed Facility will consist of (i) a US$30,000,000 funding
commitment dedicated primarily to Wet Loans (defined below) (the "Wet
Warehouse") and (ii) a commitment of up to US$23,000,000 for the purchase of
specified ABFS-owned residual interests (the "Purchased Securities") from one or
more outstanding ABFS securitizations (the "Residual Repo"). Neither the Wet
Warehouse nor the Residual Repo is offered individually; both must be accepted
by ABFS. Patriot will commit to organize the Investor and the Purchaser (which
may be the same entity) described in the Commitment Terms and such entities will
provide the financing for the Wet Warehouse and will purchase the Purchased
Securities under the Residual Repo, respectively, subject to the terms thereof.



<PAGE>

         Patriot reserves the right to involve other investors and/or purchasers
(both junior and senior) in the Committed Facility, and you agree to cooperate
with us in our efforts to bring such investors and purchasers into the Committed
Facility. To assist Patriot in its efforts with respect to the Committed
Facility, you agree promptly to prepare and provide to Patriot all information
with respect to ABFS and the transactions contemplated hereby, including
projections (the "Projections") and all financial information, as we may
reasonably request. You hereby represent and covenant that (a) all information
other than the Projections (the "Information") that has been or will be made
available to Patriot by you or any of your representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made, (b) the Projections that have been or will be made
available to Patriot by you or any of your representatives have been or will be
prepared in good faith based upon commercially reasonable and supportable
assumptions, and (c) you will provide to Patriot timely updates to the
Information whenever, based upon the passage of time or the occurrence of events
or both, such updates are necessary to prevent the Information from including an
untrue statement of a material fact or failing to include a material fact
necessary in order to make the statements contained in the Information not
materially misleading in light of the circumstances under which such statements
were made. You understand that in making available the Committed Facility we may
use and rely on the Information and Projections without independent verification
thereof.

         As consideration for Patriot's agreements hereunder, ABFS agrees to pay
to Patriot the fees set forth in Annex I to each Summary of Terms and Conditions
attached hereto and Work Fees as provided hereinbelow.

         Patriot's agreements hereunder are subject to (a) approval of the
Committed Facility by Patriot's investment committee (which approval will be
sought after ABFS has executed and delivered a counterpart of this Commitment
Letter and, if obtained, will be confirmed to ABFS in writing prior to 6:00 p.m.
on the seventh (7th) business day following the date of such execution and
delivery), (b) all amounts due from ABFS upon ABFS's acceptance of the
Commitment Letter having been received by Patriot before the expiration date and
time set forth in the last paragraph on page 5 hereof and all other amounts due
thereafter from ABFS having been paid; (c) there not occurring or becoming known
to us any material adverse condition or material adverse change in or affecting
the business, operations, property, condition (financial or otherwise) or
prospects of ABFS and its subsidiaries, taken as a whole, other than as has been
disclosed in ABFS's public filings through October 1, 2004 (the date of the
latest SEC filing by ABFS reviewed by Patriot and its counsel to date); (d) our
not becoming aware after the date hereof of any information or other matter
affecting ABFS and/or its affiliates and subsidiaries or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
any Information, Projections or other matter disclosed to us prior to the date
hereof; (e) there not having occurred a material disruption of or material
adverse change in financial, banking or capital market conditions that, in our
judgment, could materially impair our ability to provide or arrange the
Committed Facility; (f) the negotiation, execution and delivery not later than
November 5, 2004 of definitive documentation with respect to the Committed
Facility satisfactory to Patriot and its counsel; and (g) the other conditions
set forth or referred to in the Commitment Terms.

                                       2

<PAGE>

         The parties agree that if either (A) Patriot delivers to ABFS written
confirmation of the approval by its investment committee of the Committed
Facility within the time period allotted under clause (a) of the immediately
preceding paragraph (which confirmation shall reflect any adjustments to Annex
II to Exhibit A-2 theretofore made after reasonable consultation with ABFS and
Clearwing Capital, LLC ("Clearwing"), as provided in "Purchased Securities" in
Exhibit A-2), or (B) at any time on or prior to the Closing Date, ABFS (i)
accepts any proposal or commitment with respect to any facility which, if
consummated, would either (x) prevent the Committed Facility from being executed
on the terms contemplated herein or (y) render the Committed Facility
unenforceable in whole or in part, or (ii) fails to cooperate fully with Patriot
in the performance of any and all further due diligence required by Patriot
pursuant hereto (which due diligence shall include, but not be limited to,
supplying Patriot with Excel files containing the complete performance history
of ABFS's securitizations), then in either case the Commitment Fee payable
pursuant to Annex I to Exhibit A-1 shall be permanently retained by Patriot.
However, if neither (A) nor (B) above occurs, it is agreed that Patriot shall
return such Commitment Fee to ABFS, net of any assessed but unpaid Work Fees.

         You agree (a) to indemnify and hold harmless Patriot and its officers,
members, directors, employees, advisors, and agents (each, an "indemnified
person") from and against any and all losses, claims, damages and liabilities
(including for taxes, it being the intention and agreement of the parties that
(i) the Committed Facility will be treated as a financing for federal and state
income tax purposes, as a result of which the Seller under the Residual Repo
will continue to own the Purchased Securities for federal and state income tax
purposes, and (ii) neither ABFS nor any affiliate thereof shall transfer or
pledge to any other entity, or suffer to exist any competing security interest
(other than Clearwing's pledge and security interest existing on the date
hereof) on, any of the Additional Collateral), to which any such indemnified
person may become subject arising out of or in connection with the Original
Commitment Letter, the Extension Letter, this Commitment Letter, the Committed
Facility, the use of the proceeds thereof or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the foregoing,
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities or related expenses to the extent
they are found by a final, non-appealable judgment of a court to arise from the
willful misconduct or gross negligence of such indemnified person, and (b) to
reimburse Patriot on demand for all out-of-pocket expenses (including diligence
expenses, consultants' fees and expenses, travel expenses, and reasonable fees,
charges and disbursements of counsel and other advisors) incurred in connection
with the Original Commitment Letter, the Extension Letter, this Commitment
Letter and the preparation, execution and delivery of the Committed Facility and
all related documentation (including any amounts related to efforts to involve
other investors and/or purchasers in the Committed Facility), subject to the
Work Fee provisions contained in the immediately succeeding paragraph. No
indemnified person shall be liable for any special, indirect, consequential or
punitive damages in connection with its activities related to the Committed
Facility. No indemnified person shall be liable for any damages arising from the
use by others of Information or other materials obtained through electronic,
telecommunications or other information transmission systems or for any special,
indirect, consequential or punitive damages.

                                       3

<PAGE>

         As provided in the Extension Letter, you confirm your agreement to pay
Patriot a Work Fee of up to US$1,400,000 (the "Patriot Work Fee Limit") which
will be used to pay out-of-pocket diligence and transaction expenses related to
the Committed Facility (including any prior expenses of Patriot incurred in
connection with negotiations between Patriot and ABFS culminating in the
Original Commitment Letter but excluding the diligence expenses of any
participants in or lenders to Investor or Purchaser other than Patriot). It is
agreed that US$825,000 of Work Fees have been paid to Patriot (and credited
toward the Patriot Work Fee Limit) as of the date hereof. ABFS shall remit by
wire transfer in immediately available funds an additional Work Fee amount of
US$100,000 to Patriot on the date of execution and delivery of the Commitment
Letter by ABFS, and such amount will be credited toward the Patriot Work Fee
Limit. Additional Work Fee amounts, subject to the Patriot Work Fee Limit, may
be requested by Patriot and will be deposited by ABFS if and as needed,
including on a prospective basis. You also confirm your agreement to pay to
Patriot the diligence and other expenses of any participants in or lenders to
Investor or Purchaser other than Patriot, as and when requested by Patriot, up
to a limit of US$400,000, which limit is separate from and in addition to the
Patriot Work Fee Limit and any other fees and expenses set forth herein. Any
unused amounts of the Work Fees or participant and lender expenses deposited
with Patriot will be refunded to ABFS.

         This Commitment Letter shall not be assignable by you without the prior
written consent of Patriot (and any purported assignment without such consent
shall be null and void), is intended to be solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto. This Commitment Letter may
not be amended or waived except by an instrument in writing signed by you and
Patriot. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. The Nondisclosure Agreement between ABFS
and Patriot, dated as of September 9, 2004 (as amended in accordance with the
Extension Letter, the "NDA"), the Extension Letter, and, upon your execution and
delivery of a counterpart original of this letter to us, this Commitment Letter,
will be the only agreements in effect with respect to the Committed Facility,
will supersede all prior understandings with respect to the Committed Facility
and will set forth the entire understanding of the parties with respect thereto.
This Commitment Letter shall be governed by, and construed in accordance with,
the laws of the State of New York.

         This Commitment Letter is delivered to you on the understanding that
none of this Commitment Letter or the Commitment Terms, nor any of their terms
or substance, shall be disclosed, directly or indirectly, to any other person
except (a) to your officers, agents, attorneys and other advisors who are
directly involved in the consideration of this matter, (b) to Clearwing,
provided that Clearwing has agreed to keep its contents confidential, (c) to
persons or entities other than those listed in (a) and (b) hereof with Patriot's
prior written permission, or (d) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law (in which case you
agree to inform us promptly thereof).

         You acknowledge that Patriot may be providing debt financing, equity
capital or other funding or services (including financial advisory services) to
other companies with whom you compete or in respect of which you may have
conflicting interests regarding the transactions described herein or otherwise.

                                       4

<PAGE>

You also acknowledge that Patriot has no obligation to use in connection with
the transactions contemplated by this letter, or to furnish to you, confidential
information obtained from other companies.

         The compensation, reimbursement, indemnification and confidentiality
provisions contained herein (respectively, the "Surviving Provisions") and in
the NDA and the Extension Letter shall remain in full force and effect
regardless of whether definitive documentation shall be executed and delivered
and notwithstanding the non-acceptance or termination of this Commitment Letter
or termination of Patriot's commitment hereunder. Your obligations under this
Commitment Letter, other than those arising under the Surviving Provisions,
shall terminate upon the termination hereof and if documentation with respect to
a Committed Facility is executed, shall be superseded by the provisions of such
documentation upon the initial funding thereunder.

         If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof, and of the Commitment Terms, by returning
to us an executed counterpart hereof, together with the amounts payable upon the
acceptance hereof, not later than 12:00 noon, New York City time, on Wednesday,
October 27, 2004. Please note that Patriot's wire transfer instructions for the
payments required in connection herewith are set forth on Exhibit B hereto.
Patriot's commitment and agreements herein will automatically expire at such
time in the event Patriot has not received such executed counterpart and such
amounts in accordance with this paragraph.



                  [Remainder of page intentionally left blank]



                                       5

<PAGE>


         Patriot is pleased to have the opportunity to assist you in connection
with this important facility.

                                            Very truly yours,

                                            THE PATRIOT GROUP, LLC


                                            By: /s/ Charles A. Forbes, Jr.
                                                -------------------------------
                                            Name:  Charles A. Forbes, Jr.
                                            Title: Co-Chief Executive Officer

Accepted and agreed to as of
the date first written above by:

AMERICAN BUSINESS FINANCIAL SERVICES, INC.


By: /s/ Anthony J. Santilli
    -----------------------------------------
Name:  Anthony J. Santilli, Jr.
Title: Chairman, President, Chief Executive Officer
       and Chief Operating Officer





                                       6

<PAGE>


                                                                     EXHIBIT A-1
                                                                     -----------

                   American Business Financial Services, Inc.

                  Residential Mortgage Loan Warehouse Agreement

                Summary of Terms and Conditions for Wet Warehouse

                                October 26, 2004

I.       PARTIES

Issuer Parent:                 A special purpose bankruptcy-remote Delaware
                               statutory trust ("Trust 3" or the "Issuer
                               Parent"), 97% of the beneficial interests in
                               which shall be owned by ABFS Consolidated
                               Holdings, Inc. ("Holdings"), a direct,
                               wholly-owned subsidiary of American Business
                               Financial Services, Inc., and 3% of the
                               beneficial interests in which shall be owned by
                               the Originators (as defined below).

Issuer:                        A special purpose bankruptcy-remote Delaware
                               statutory trust ("Trust 4" or the "Issuer"), all
                               of the beneficial interests in which shall be
                               owned by Trust 3. The Issuer may be the same
                               entity as the Seller under the Residual Repo.

Investor:                      A limited purpose entity to be formed by Patriot
                               (or one or more of its affiliates and/or
                               subsidiaries). Investors may include participants
                               in addition to Patriot, and Patriot may obtain
                               capital from or arrange direct participation by
                               third parties on a senior or junior basis (such
                               investors, collectively, the "Investor"). The
                               Investor may be the same entity as the Purchaser
                               under the Residual Repo.

Custodian:                     A third party that can fulfill all duties,
                               including necessary wire transfers to acquire wet
                               funded mortgage loans, pursuant to a Custodial
                               Agreement satisfactory to Patriot in its sole
                               discretion. JPMorgan Chase Bank would be
                               acceptable to Patriot as Custodian.

Issuer Owner
Trustee:                       A financial institution to be selected by ABFS
                               that can fulfill all duties required of it under
                               an Issuer Trust Agreement, satisfactory to
                               Patriot in its sole discretion.

Parent Owner
Trustee:                       A financial institution to be selected by ABFS
                               that can fulfill all duties required of it under
                               an Issuer Parent Trust Agreement, satisfactory to
                               Patriot in its sole discretion.

                                     A-1-1

<PAGE>

Investor Co-
Trustees:                      (i) A nationally-chartered commercial bank and
                               (ii) a Delaware trustee, both to be selected by
                               Patriot in its sole discretion, that can, between
                               them, fulfill all duties required of them under
                               an Investor Trust Agreement, satisfactory to
                               Patriot in its sole discretion.

Servicer:                      ABFS, on a short-term renewable basis. The
                               Servicer will earn a servicing fee (to be
                               approved by the Investor in its sole discretion).
                               Investor, in its sole discretion, will grant
                               renewals from time to time. Servicer shall
                               deposit collections daily into a segregated
                               collection/distribution account, subject to the
                               commingling prohibitions contained herein, at the
                               Custodian or the applicable Investor Co-Trustee
                               (as determined by the Investor) for the benefit
                               and under the control of Investor.

Back-up Servicer:              Countrywide Home Loan Servicing LP, pursuant to a
                               Back-up Servicing Agreement satisfactory to
                               Patriot.

II.      FACILITY AMOUNT AND STRUCTURE

Facility Amount:               US$30,000,000.

Facility Term:                 Three (3) years from Closing Date.

Structure:                     Structured warehouse facility with advances
                               evidenced by one or more master variable funding
                               notes (collectively, the "VFN") issued by the
                               Issuer. The VFN, having a principal amount of up
                               to US$30,000,000, will provide funding for, and
                               will be secured primarily by, Wet Loans (as
                               defined below) and proceeds thereof. The VFN may
                               also be secured by Wet Loans which have become
                               Eligible Loans (as defined below). The
                               outstanding principal amount of all advances
                               under the VFN may at no time exceed the Borrowing
                               Base (as defined below). The VFN will be secured
                               by all Loan Collateral (as defined below) and by
                               all Additional Collateral (as defined below).
                               Investor will purchase the VFN on the Closing
                               Date.

                               Issuer will acquire the Wet Loans, on a daily
                               basis, in legal true sales. Trust 3 will purchase
                               Wet Loans from the Originators and Issuer will
                               purchase Wet Loans from Trust 3.

                               Investor reserves the right to bring one or more
                               lenders into the Wet Warehouse provided that the
                               resulting structure provides ABFS with
                               substantially identical funding availability and
                               pricing to the availability and pricing described
                               herein.

Borrowing Base:                As to any loan funded under the Wet Warehouse, at
                               any date, the lesser of (x) the Facility Amount
                               and (y) the product of the Advance Rate (as
                               defined below) applicable to such loan and the
                               lesser of (i) the then-current principal balance
                               of such loan or (ii) the fair market value of
                               such loan as determined by the Investor in its
                               sole discretion.

                                     A-1-2

<PAGE>

Wet Warehouse
Collateral:                    The VFN will be secured by (i) a perfected first
                               priority security interest in and lien upon all
                               Wet Loans, including all Wet Loans that become
                               Eligible Loans (as defined below), all proceeds
                               thereof, all funds from time to time on deposit
                               in the concentration/distribution and
                               disbursement accounts maintained by the
                               Custodian, all funds returned or to be returned
                               by any Approved Closing Agent (as defined below)
                               and all rights under all Closing Protection
                               Letters and Funds Receipt Agreements (as defined
                               below) (collectively, the "Loan Collateral");
                               (ii) a direct pledge by ABFS of 100% of the
                               common stock of Holdings; (iii) a preferred
                               certificate (the "Trust 3 P Certificate") to be
                               issued by Trust 3 to Investor, entitling Investor
                               to a priority interest in all assets and
                               distributions received by Trust 3 and such rights
                               with respect thereto as are satisfactory to
                               Investor in its sole discretion; (iv) a perfected
                               first priority security interest in and lien on
                               all rights to reimbursement for servicer
                               advances, unearned fees of all types and prepay,
                               late, forbearance, satisfaction, NSF and other
                               similar earned fees due to ABFS as servicer, the
                               "par" amount of which on the Closing Date shall
                               not be less than US$37,000,000 (which shall
                               constitute a super-priority claim to collections
                               within each securitization trust), all pledged by
                               American Business Credit, Inc., or any other
                               applicable affiliate thereof (the "Servicer
                               Reimbursement and Fee Collateral"); and (v) a
                               perfected first priority security interest in and
                               lien on the value of the Purchased Securities in
                               excess of the amount necessary for Seller to
                               satisfy its obligations to Purchaser under the
                               Residual Repo (the "Repo-related Collateral" and,
                               together with the Trust 3 P Certificate and the
                               Servicer Reimbursement and Fee Collateral, the
                               "Additional Collateral"), all on a basis
                               acceptable to Investor in its sole discretion
                               (the collateral described in clauses (i)-(v)
                               immediately above, the "Wet Warehouse
                               Collateral"). It is agreed by the parties that
                               upon the termination of the Residual Repo, the
                               Issuer shall identify replacement Wet Warehouse
                               Collateral acceptable to the Investor in its sole
                               discretion and pledge such replacement Wet
                               Warehouse Collateral to the Investor to replace
                               such Repo-related Collateral as shall be released
                               from the lien of the Investor; provided, that if
                               and only if the Residual Repo shall be terminated
                               on its Termination Date (as defined in Exhibit
                               A-2), then upon thirty (30) days' prior written
                               notice to Investor, Issuer may terminate the Wet
                               Warehouse on the second anniversary of the
                               Closing Date and pay the Investor a one-time
                               termination fee of US$600,000 by wire transfer in
                               immediately available funds (such termination of
                               the Wet Warehouse becoming effective upon
                               confirmation by Investor of receipt of such
                               termination fee as well as all other amounts then
                               due to Investor under the Wet Warehouse and the
                               Residual Repo).

                                     A-1-3

<PAGE>

                               Holdings owns 97% of the "common" equity
                               certificates (or "R Certificates") of ABFS
                               Warehouse Trust 2003-1 ("Trust 1"), which owns
                               the outstanding retained interest-only strips
                               ("IOs") and securitization over-collateralization
                               and residual interests set forth on Schedule I
                               attached hereto (the IOs and such other scheduled
                               interests, collectively, the "Trust 1 IO
                               Collateral"). Three other ABFS entities, American
                               Business Mortgage Services, Inc., HomeAmerican
                               Credit, Inc., and American Business Credit, Inc.
                               (collectively, the "Originators") own and hold
                               the remaining 3% of the Trust 1 R Certificates.

                               The Trust 1 R Certificates (together with all
                               rights relating thereto, the "Trust 3 Assets")
                               will be sold by Holdings and the Originators to
                               Trust 3 in a true sale on the Closing Date. ABFS
                               shall have the responsibility to obtain all
                               consents necessary for such sales.

                               Trust 3 will receive all distributions on the
                               Trust 1 R Certificates. The Trust 3 P Certificate
                               will entitle the holder thereof to receive 100%
                               of the value of the Trust 3 Assets, including
                               without limitation, such distributions and any
                               other Trust 3 Assets, and any proceeds from or
                               other sales or dispositions of any of the
                               foregoing. On the Closing Date, Trust 3 will
                               issue the Trust 3 P Certificate to Investor to
                               secure the obligations of Issuer hereunder and of
                               the Seller under the Residual Repo. The Investor,
                               as the holder of the Trust 3 P Certificate, will
                               be entitled to apply 100% of such value to such
                               obligations. As the holder of the Trust 3 P
                               Certificate, Investor, and its successors and
                               assigns, will have the right to exercise all
                               rights with respect to Trust 3 and the Trust 3
                               Assets, including any rights of termination and
                               any of the rights of the Trust 1 R
                               Certificateholders with respect to Trust 1 and
                               the IO Collateral held by Trust 1 under the
                               Amended and Restated Trust Agreement, dated as of
                               October 14, 2003, pursuant to which Trust 1 was
                               established. In an Event of Default under the Wet
                               Warehouse Facility Documentation, Investor, as
                               the holder of the Trust 3 P Certificate, will
                               have rights customary for secured creditors,
                               including the right to foreclose upon and sell
                               the Trust 3 Assets to satisfy the obligations of
                               the Issuer hereunder and the obligations of the
                               Seller under the Residual Repo; provided that for
                               as long as the Chrysalis Warehouse is
                               outstanding, Investor will not effect any sale or
                               transfer of the Trust 3 Assets to any entity that
                               is not either (i) an affiliate of Investor or
                               (ii) a securitization vehicle or other similar
                               special purpose financing entity.

                               On the Closing Date, Trust 3 will issue Trust 3 R
                               Certificates to Holdings (representing 97% of the
                               Trust 3 common equity) and to the Originators
                               (representing 3% of such equity). ABFS has
                               advised Patriot that any and all of the cash flow
                               from these Trust 3 R Certificates, as well as any
                               and all Trust 3 P Certificate cash flow not

                                     A-1-4

<PAGE>

                               applied to the obligations owed to Investor under
                               the Wet Warehouse or to Purchaser under the
                               Residual Repo, will secure the obligations of
                               ABFS to the holders of its currently outstanding
                               senior collateralized subordinated notes as are
                               secured by the cash flow from the Trust 1 R
                               Certificates. Otherwise, the Trust 3 R
                               Certificates may not be assigned or pledged.

                               The Wet Warehouse Collateral will secure (a) the
                               principal balance of the VFN (except that the
                               Trust 3 P Certificate will secure only 15% of the
                               principal balance of the VFN (but 100% if a Fraud
                               Event occurs)); (b) all earned interest and fees;
                               and (c) all expenses and indemnities at any time
                               reimbursable to Investor. In addition, all Wet
                               Warehouse Collateral (except the Repo-related
                               Collateral) shall secure Seller's obligations
                               under the Residual Repo, and the Investor may
                               apply the Wet Warehouse Collateral in any order
                               to the Issuer's obligations under the Wet
                               Warehouse. A "Fraud Event" shall include, but not
                               be limited to, the pledge or transfer by the
                               Issuer or any other person of any of the mortgage
                               notes or other documents or collateral relating
                               to the Wet Loans to any party not authorized to
                               receive or obtain a security or ownership
                               interest in the same under the terms of the Wet
                               Warehouse Facility Documentation, any Wet Loans
                               not being actual bona fide mortgage loans, any
                               diversion of funds advanced by Investor - or by
                               the Custodian on the Investor's behalf - from
                               their intended use, any material
                               misrepresentation regarding such loans or any
                               attempt to force either Trust 3 or Trust 4 into
                               bankruptcy or violate their separateness
                               covenants.

                               The collateral securing that certain Master Loan
                               and Security Agreement, dated as of October 14,
                               2003, between ABFS Warehouse Trust 2003-2 ("Trust
                               2") and Chrysalis Warehouse Funding, LLC
                               ("Chrysalis;" such facility, in the form filed in
                               2003 with the SEC, the "Chrysalis Warehouse;"
                               such agreement, in the form filed in 2003 with
                               the SEC, the "Chrysalis Loan Agreement"), will at
                               all times be limited to the mortgage loans funded
                               thereunder and the additional collateral granted
                               to Chrysalis by Trust 1 as of the effective date
                               of such credit facility, less the residual
                               interests released by Chrysalis as contemplated
                               herein (the "Remaining Chrysalis Additional
                               Collateral"). Chrysalis' senior claim to the
                               Remaining Chrysalis Additional Collateral will at
                               all times be consistent with its claims under the
                               Chrysalis Warehouse (i.e., based on 10% of its
                               facility outstandings (which percentage has been
                               modified to 12.22% as agreed with ABFS; no other
                               terms have been modified) and percentage fees and
                               interest rates as provided in the original
                               Chrysalis Warehouse) and will be based on a
                               maximum facility size of US$400,000,000
                               (US$250,000,000 if the Chrysalis Warehouse shall
                               fail to be upsized to US$400,000,000 by the
                               earlier of (x) the January 12, 2005 deadline
                               contemplated under the terms thereof (as such
                               deadline may be extended by the parties to the
                               Chrysalis warehouse by mutual agreement) or (y)
                               March 31, 2005).

                                     A-1-5

<PAGE>

Purpose:                       The VFN will fund the purchase by Trust 4 of
                               residential first and second mortgage loans
                               originated by various ABFS subsidiaries and
                               meeting ABFS's underwriting guidelines in effect
                               from time to time (the "Underwriting
                               Guidelines").

Eligible Loans:                Whole loan eligibility criteria to be
                               substantially similar to those contained in the
                               Chrysalis Warehouse ("Eligibility Criteria"),
                               including a certification with respect to each
                               loan from the Custodian. Whole loans originally
                               funded as Wet Loans which come to meet the
                               Eligibility Criteria are referred to herein as
                               "Eligible Loans".

Wet Loans:                     Funded and closed mortgage loans which by their
                               terms would qualify as Eligible Loans but for the
                               fact that full and complete documentation has not
                               been received by the Custodian ("Wet Loans"). The
                               funding of Wet Loans will at all times be subject
                               to the requirements set forth under "Wet Loan
                               Advance Requirements" below.

Advance Rate:                  As to any Wet Loan funded under the Wet
                               Warehouse, as provided under that certain Amended
                               and Restated Senior Secured Credit Agreement,
                               dated as of September 22, 2003 (the "Chase
                               Warehouse"), between ABFS and JPMorgan Chase Bank
                               as Agent (90% for fixed-rate first mortgage
                               loans, 88% for adjustable-rate first mortgage
                               loans and 75% for second mortgage loans). Wet
                               Loan purchases will be the subject of the
                               additional requirements set forth under "Wet Loan
                               Advance Requirements" below.

                               Wet Loans (i) may be financed under the Wet
                               Warehouse for a maximum of six (6) business days
                               from and including the date of origination of
                               each such Wet Loan and (ii) cannot have been
                               financed under any other wet loan financing
                               facility, except those Wet Loans financed on the
                               Closing Date that were - immediately prior
                               thereto - financed under the Chase Warehouse if
                               the Chase Warehouse is being terminated on the
                               Closing Date; provided, that Wet Loans which
                               become Eligible Loans prior to the close of the
                               sixth business day from origination may remain
                               financed under the Wet Warehouse for a maximum of
                               sixty (60) additional days. Such Eligible Loans
                               will continue to be financed at the lesser of (a)
                               the applicable Advance Rate or (b) the advance
                               rate which would be applicable to such loan under
                               the Chrysalis Warehouse (if such loan were
                               subject to such facility), subject in all cases
                               and at all times to the principal balance of the
                               VFN not exceeding the Facility Amount. Wet Loans
                               and Eligible Loans will only be released as Wet
                               Warehouse Collateral if the principal balance of
                               the VFN does not exceed the Borrowing Base -
                               after giving effect to such release - and no
                               default or event of default under the Wet
                               Warehouse has occurred and is continuing.

                                     A-1-6

<PAGE>

                               In addition, the Advance Rate provided by
                               Investor with respect to any category of Wet
                               Loans or Eligible Loans will at no time exceed
                               the advance rate offered to ABFS under any other
                               ABFS warehouse facility for similar loans (as
                               determined by the Investor), and to effectuate
                               such intent ABFS will provide to Investor (and/or
                               the Custodian), no less frequently than weekly,
                               copies of all borrowing base certificates and
                               remittance reports provided to or by other
                               lenders and such other information as the
                               Custodian or Investor may request. Investor may,
                               in its discretion in connection with its ongoing
                               monitoring of the Wet Warehouse Collateral,
                               including but not limited to its ongoing review
                               of contract underwriting, decrease the Advance
                               Rates for the Wet Warehouse from time to time.

Loan Advance
Mechanics:                     The Custodian will act as the disbursing agent
                               for funding of all advances under the Wet
                               Warehouse at the expense of the Issuer, including
                               but not limited to funding for all Wet Loan
                               purchases by Trust 4. Funding for Wet Loan
                               purchases by Trust 4 shall be deposited by
                               Investor and Issuer into a
                               concentration/distribution account maintained by
                               the Custodian. Once the Custodian has received
                               all amounts due from each of Investor (advance in
                               accordance with applicable Advance Rates) and
                               Issuer (deposit representing applicable haircut
                               amount and fees) in the concentration/
                               distribution account, the combined deposit will
                               be transferred to a disbursement account
                               maintained by the Custodian. The amounts needed
                               by Issuer to fund the concentration/distribution
                               account will be supplied to it solely through
                               capital contributions made by Holdings (which
                               will also obtain the needed funds solely by
                               capital contributions) through Trust 3 and by
                               excess cash flow. The Custodian will wire
                               transfer the Wet Loan purchase price to the
                               Approved Closing Agent, subject to such
                               procedures with respect to validating wire
                               transfer instructions provided by ABFS as are
                               satisfactory to Investor, and will receive by
                               direct delivery the related documentation for
                               such Wet Loan from such Approved Closing Agent.

Wet Loan Advance
Requirements:                  Wet Loans will be closed in escrow by an Approved
                               Closing Agent which is bonded by an Approved
                               Title Insurer pursuant to a Closing Protection
                               Letter (except in New York, where a guarantee
                               letter shall be provided in form and substance
                               acceptable to the Investor) and Funds Receipt
                               Agreement benefiting the Investor and specific
                               closing instructions provided by the Custodian on
                               behalf of the Investor.

                                     A-1-7

<PAGE>

                               An "Approved Title Insurer" shall mean any
                               single-A-rated insurance company reasonably
                               satisfactory to the Custodian on behalf of the
                               Investor.

                               An "Approved Closing Agent" shall mean a closing
                               agent which is independently owned and operated
                               (i.e., has no affiliation with ABFS), is bonded
                               by an Approved Title Insurer (or a guarantee
                               letter in New York) and is insured against errors
                               and omissions in an amount satisfactory to
                               Patriot in its sole discretion.

                               Under each "Closing Protection Letter" (or
                               guarantee letter in New York) the applicable
                               Approved Title Insurer (or comparable entity
                               under a guarantee letter in New York) will
                               guarantee the performance of the applicable
                               Approved Closing Agent and agree to reimburse the
                               Investor for any losses incurred due to (i)
                               malfeasance or fraud on the part of the Approved
                               Closing Agent or (ii) the failure of the Approved
                               Closing Agent to follow the specific closing
                               instructions specified by the Investor.

                               Each "Funds Receipt Agreement" will provide
                               specific instructions for the applicable Approved
                               Closing Agent to close and deliver mortgage loans
                               funded by Investor immediately or to wire the
                               funds back to Investor (or the Custodian, if so
                               directed by the Investor in writing) if the
                               funding does not occur within one (1) business
                               day, such wire to include, without limitation,
                               the applicable haircut amount deposited by the
                               Issuer. If any Approved Closing Agent at any time
                               fails to either deliver the loan collateral file
                               (such file to consist of the note, the mortgage,
                               the title policy, the assignment of mortgage and
                               all other related documents) or return funds to
                               the Custodian as required (it being understood
                               that all Approved Closing Agents will be required
                               to deliver loan documents directly to the
                               Custodian), the applicable Approved Title Insurer
                               pursuant to the Closing Protection Letter (or
                               comparable entity under a guarantee letter in New
                               York) will be obligated to reimburse the Investor
                               for the full amount of the wire.

Additional Collateral:         The market value (as determined by the Investor
                               in its sole discretion) of the Additional
                               Collateral (as adjusted to take into account all
                               potential senior claims of Chrysalis against the
                               Trust 1 IO Collateral represented by the
                               Remaining Chrysalis Additional Collateral) shall
                               be greater than US$60,000,000 at all times.

Distributions:                 (i) Any payments of principal, interest and other
                               amounts paid by obligors with respect to the Wet
                               Loans and Eligible Loans, and all foreclosure
                               proceeds, insurance proceeds and other recoveries
                               thereon, (ii) any proceeds of the refinancing,
                               sale or securitization of any Wet Loans or
                               Eligible Loans and any other proceeds of the Loan
                               Collateral, (iii) any cash flow from the Trust 1
                               IO Collateral released by Chrysalis under the

                                     A-1-8

<PAGE>

                               Chrysalis Warehouse, all of which shall be turned
                               over to the Parent Owner Trustee, for the benefit
                               of the Trust 3 P Certificate holder and other
                               parties with interests in the Trust 3 R
                               Certificates, (iv) all proceeds of Servicer
                               Reimbursement and Fee Collateral, and (v) any
                               proceeds of Repo-related Collateral
                               (collectively, the "Wet Warehouse Available
                               Collections"), shall be deposited into one or
                               more collection/distribution accounts
                               (established under such terms as are satisfactory
                               to the Investor) and be paid on a monthly basis
                               on each Payment Date (as defined in Annex I to
                               Exhibit A-1) as follows:

                               first, to the Issuer Owner Trustee, Parent Owner
                               Trustee, Investor Co-Trustees, Custodian and
                               Back-up Servicer, pro rata, any outstanding fees
                               not paid by the Issuer;

                               second, to the Servicer to pay any servicing
                               fees;

                               third, to the Investor to pay any fees owed to
                               Investor;

                               fourth, to the Investor to pay any interest owed
                               to Investor;

                               fifth, to the Investor to pay any principal
                               amounts of the VFN needed to remain in compliance
                               with the Borrowing Base and to pay the
                               outstanding principal balance of the VFN upon the
                               maturity, early termination or acceleration of
                               the Wet Warehouse;

                               sixth, to the Investor to pay any other amounts
                               due to Investor under the Wet Warehouse;

                               seventh, remaining Wet Warehouse Available
                               Collections (other than any remaining portion
                               thereof described in clause (v) of the definition
                               of "Wet Warehouse Available Collections") to the
                               Purchaser or other applicable parties (other than
                               the Seller) under the Residual Repo to the extent
                               the funds available under such facility are
                               insufficient to make the required payments
                               thereunder; and

                               eighth, provided no Event of Default has occurred
                               and is continuing under the Wet Warehouse, the
                               remainder to the Issuer.

                               Amounts due Investor under priorities "third"
                               through "sixth" shall be deemed to be "Required
                               Distributions" for purposes of the Wet Warehouse,
                               and failure of Investor to receive such Required
                               Distributions in full, by operation of the
                               waterfall above or otherwise, shall constitute an
                               Event of Default under the Wet Warehouse.

                               More frequent payments, resulting from the
                               refinancing, sale or securitization of Eligible
                               Loans, will also be permitted, under arrangements
                               satisfactory to the Investor. Release of excess
                               cash flow from the Trust 1 IO Collateral received
                               on the 15th of each month may be permitted by the

                                     A-1-9

<PAGE>

                               Investor prior to a Payment Date subject to such
                               conditions as the Investor shall determine in its
                               sole discretion. Wet Warehouse Available
                               Collections referred to in clauses (iii), (iv)
                               and (v) of the definition thereof shall not be
                               commingled with funds pledged or belonging to
                               others; Wet Warehouse Available Collections
                               referred to in clauses (i) and (ii) of the
                               definition thereof may be commingled with funds
                               pledged to other ABFS lenders or belonging to
                               ABFS whole loan purchasers under arrangements
                               satisfactory to Investor in its sole discretion.

III.     CERTAIN PAYMENT PROVISIONS

Investor Fees and
Interest Rates:                As set forth on Annex I to Exhibit A-1.

Other Fees and
Expenses:                      Fees and expenses of the Issuer Owner Trustee,
                               Parent Owner Trustee, Investor Co-Trustees,
                               Custodian, Servicer and Back-up Servicer to be
                               paid by ABFS, such fees and expenses being
                               separate and apart from any fees and expenses
                               owed to Patriot or Investor (including the
                               Monitoring Fee (as defined below) and Work Fees).
                               In addition, all out-of-pocket fees and expenses
                               incurred by the Investor in connection with the
                               administration, amendment and/or enforcement of
                               the Wet Warehouse will be reimbursed by the
                               Issuer or ABFS on demand.

IV.      CERTAIN CONDITIONS

Initial Conditions:            The availability of the Wet Warehouse shall be
                               conditioned upon satisfaction of, among other
                               things, the following conditions precedent not
                               later than November 5, 2004 (the date upon which
                               all such conditions precedent shall be satisfied,
                               the "Closing Date"):

                               (a) The Issuer shall have executed and delivered
                               definitive financing documentation with respect
                               to the Wet Warehouse, including without
                               limitation the Trust 3 P Certificate (the "Wet
                               Warehouse Facility Documentation") and a master
                               repurchase agreement with respect to the Residual
                               Repo in form and substance satisfactory to
                               Investor;

                               (b) The Investor and all participants therein or
                               lenders thereto shall have received all fees
                               required to be paid (including but not limited to
                               all Work Fees), and all expenses for which
                               invoices have been presented shall have been paid
                               in full, on or before the Closing Date (with Work
                               Fees being applied thereto as provided herein);

                               (c) All governmental and third party approvals
                               necessary or, in the discretion of the Investor,
                               advisable in connection with the transactions
                               contemplated hereby and the continuing operations
                               of ABFS and its subsidiaries, including Holdings,
                               the Issuer Parent and the Issuer, shall have been
                               obtained and be in full force and effect;

                                     A-1-10

<PAGE>

                               (d) The Investor shall have received and
                               determined as satisfactory, prior to the Closing
                               Date, (i) ABFS's annual report and final audited,
                               consolidated financial statements for the fiscal
                               year ended June 30, 2004 substantially in the
                               form filed or to be filed with the Securities and
                               Exchange Commission (the "SEC") on Form 10-K,
                               together with the opinion thereon of BDO Seidman,
                               LLP; (ii) satisfactory unaudited interim
                               consolidated financial statements of ABFS for
                               each of July, August, September and October of
                               the current fiscal year (to the extent such
                               statements have been produced by ABFS); (iii) all
                               correspondence between ABFS and the SEC regarding
                               ABFS's registration statement on Form S-2 filed
                               on October 15, 2004 regarding its retail secured
                               subordinated indebtedness; (iv) ABFS's latest
                               contingent financial restructuring plan; and (v)
                               any other correspondence between ABFS and the SEC
                               which Patriot may request;

                               (e) The Investor shall have received such legal
                               opinions, documents and other instruments as are
                               customary for transactions of this type and as
                               they may reasonably request;

                               (f) ABFS and its affiliates shall be in full
                               compliance (after giving effect to any waivers
                               obtained thereunder satisfactory to Patriot) with
                               all terms and conditions contained in the
                               Chrysalis Loan Agreement, all other financings
                               and all of its securitizations;

                               (g) ABFS shall have received one or more
                               definitive warehouse commitments from one or more
                               other new lenders to the company to provide an
                               aggregate minimum US$100,000,000 in warehouse
                               funding, with an aggregate minimum US$30,000,000
                               sub-limit for wet loans ("Additional Warehouse
                               Lines"), which Additional Warehouse Lines shall
                               be required to close not later than the Closing
                               Date;

                               (h) ABFS shall have obtained a "key man" life
                               insurance policy on the life of Anthony J.
                               Santilli, to be collaterally assigned to the
                               Investor, in an amount at least equal to
                               US$2,000,000 (provided that ABFS shall use its
                               best efforts to increase the amount of such
                               policy to US$5,000,000 within six months of the
                               Closing Date);

                               (i) Investor shall have entered into such
                               intercreditor agreements with ABFS's other
                               lenders as are, in Investor's sole discretion,
                               necessary to effectuate the intent of the Wet
                               Warehouse and preserve its interests in the Wet
                               Warehouse Collateral, in each case on terms and
                               conditions satisfactory to Investor in its sole
                               discretion, including but not limited to (a)
                               restrictions on the sale or disposition of

                                     A-1-11

<PAGE>

                               Trust 1 IO Collateral and (b) the commingling of
                               Wet Warehouse Available Collections referred to
                               in clauses (i) and (ii) of the definition thereof
                               under "Distributions" above;

                               (j) All conditions contained in the Commitment
                               Letter shall each have been satisfied;

                               (k) Investor shall have received copies of
                               certified resolutions of the Board of Directors
                               of ABFS and Holdings (including any applicable
                               committees thereof) authorizing and approving the
                               Wet Warehouse, in form and substance satisfactory
                               to Investor; and

                               (l) ABFS, Holdings and the pledgor(s) of Servicer
                               Reimbursement and Fee Collateral shall provide
                               Investor with current financial statements,
                               prepared in accordance with GAAP, along with
                               certifications, which must evidence that each has
                               a positive net worth (and cover related matters)
                               as of the Closing Date.

On-Going
Conditions:                    Each financing shall be conditioned upon (a) the
                               accuracy of all representations and warranties in
                               the Wet Warehouse Facility Documentation
                               (including, without limitation, material adverse
                               change and litigation representations) and (b)
                               there being no default or event of default in
                               existence at the time of, or after giving effect
                               to the making of, such extension of credit. As
                               used herein and in the Wet Warehouse Facility
                               Documentation, a "material adverse change" shall
                               mean any event, development or circumstance that
                               has had or could reasonably be expected to have a
                               material adverse effect on (x) the business,
                               assets, property, condition (financial or
                               otherwise), or prospects of ABFS and its
                               affiliates taken as a whole or on the value of
                               the Wet Warehouse Collateral, or (y) the validity
                               or enforceability of any of the Wet Warehouse
                               Facility Documentation or the rights or remedies
                               of the Investor thereunder.

                               ABFS shall maintain an effective registration
                               statement with the SEC for retail subordinated
                               indebtedness with availability of at least
                               $30,000,000 at all times. In addition, as
                               provided under the Chrysalis Warehouse, ABFS
                               shall not be unable for any reason to sell or
                               issue subordinated debentures or senior
                               collateralized subordinated notes under any
                               existing Sub-debt Indentures (defined in the
                               Chrysalis Loan Agreement as all indentures
                               entered into prior to the closing date of that
                               credit facility between ABFS and U.S. Bank
                               National Association) or any other similar future
                               indentures for more than three consecutive weeks
                               or on more than two occasions in any twelve-month
                               period irrespective of the length of time of any
                               such occasions.

                                     A-1-12

<PAGE>

                               ABFS must at all times satisfy all requirements
                               for continuing its current Nasdaq listing status.
                               A delisting notification will be a default under
                               the Wet Warehouse Facility Documentation, with a
                               cure period provided to reestablish ABFS's
                               listing on Nasdaq equal to the applicable cure
                               period provided in Nasdaq's listing standards
                               and/or regulations.

                               ABFS shall not make any material changes to its
                               Underwriting Guidelines, unless Investor shall
                               have given prior written approval for such
                               changes.

                               ABFS shall at all times keep Investor informed in
                               writing of its mortgage loan programs and related
                               program pricing, including without limitation any
                               and all changes thereto as and when made.

                               ABFS and Issuer shall at all times maintain all
                               required lending and other licenses in each
                               applicable jurisdiction in which it transacts
                               business.

                               At all times during the term of the Committed
                               Facility, ABFS shall retain Anthony J. Santilli,
                               Jeffrey Ruben and Albert Mandia in their current
                               positions at ABFS or, if and to the extent
                               Jeffrey Ruben or Albert Mandia shall cease to
                               hold their current positions, secure a
                               replacement employee reasonably satisfactory to
                               Investor within 60 days thereafter.

                               At all times during the life of the Wet
                               Warehouse, ABFS shall maintain in force a "key
                               man" life insurance policy on the life of Anthony
                               J. Santilli, to be collaterally assigned to the
                               Investor, in an amount at least equal to
                               US$2,000,000 (provided that ABFS shall use its
                               best efforts to increase the amount of such
                               policy to US$5,000,000 within six months of the
                               Closing Date).

                               Investor shall be added as a named insured to
                               ABFS's errors and omissions insurance and
                               fidelity bond.

                               ABFS shall at all times preserve current coverage
                               levels of general liability, errors and omissions
                               and fidelity bond coverage.

                               ABFS shall not discriminate against the Investor
                               with respect to the Wet Loans it chooses to
                               finance under the Wet Warehouse.

V.       CERTAIN DOCUMENTATION MATTERS

The Wet Warehouse Facility Documentation shall contain representations,
warranties, covenants and events of default customary for agreements of this
type and other terms deemed appropriate by the Investor, including, without
limitation:

                                     A-1-13

<PAGE>

Certain Financial
Covenants:                     ABFS to have at least US$350,000,000 in aggregate
                               active warehouse facility commitments from one or
                               more other lenders or investors at all times.
                               Terms and conditions of facilities shall be
                               reasonably acceptable to Investor.

                               The pledgor(s) of the Servicer Reimbursement and
                               Fee Collateral shall periodically certify, and
                               provide monthly financial statements prepared in
                               accordance with GAAP evidencing, that each
                               maintains a positive net worth at the end of the
                               period covered by each such certification.

Other Covenants/
Representations:               Covenants/representations to include but not be
                               limited to those set forth in the Chrysalis Loan
                               Agreement (with covenants covering the Wet
                               Warehouse Collateral), and the following (all
                               schedules to be revised as of the Closing Date,
                               with any changes therein being satisfactory to
                               Investor in its sole discretion):

                               As of the Closing Date, there are no material
                               actions or proceedings threatened or commenced
                               and continuing against ABFS where the evaluated
                               exposure as determined by ABFS in consultation
                               with its outside legal counsel is in excess of
                               US$50,000, other than those summarized on
                               Schedule B attached to the Commitment Letter.

                               As of the Closing Date, there are no material
                               complaints asserted against ABFS by consumers or
                               regulators on their behalf other than those
                               summarized on Schedule C attached to the
                               Commitment Letter.

                               As of the Closing Date, there are no threatened
                               or pending enforcement actions, administrative
                               proceedings or investigations involving ABFS by
                               any federal, state or local governmental entity
                               other than those summarized on Schedule D
                               attached to the Commitment Letter.

                               With respect to ABFS-sponsored securitizations
                               which were insured by financial guaranty
                               company(ies), Schedule E lists (and ABFS has
                               provided copies of) all amendments and waivers to
                               contracts related to such securitizations, all
                               correspondence with such financial guaranty
                               company(ies) that is or may be material to the
                               holders of the residual interests in such
                               securitization and all servicer extension notices
                               and waivers related thereto received by ABFS
                               prior to the Closing Date from the financial
                               guaranty company.

                               ABFS is licensed and qualified to originate loans
                               and transact business in and is in good standing
                               under the laws of each state where it originates
                               and services mortgage loans unless otherwise
                               exempt under applicable law from such licensing
                               or qualification.

                                     A-1-14

<PAGE>

                               No mortgage loans subject to the Wet Warehouse
                               are: (a) mortgage loans that are subject to the
                               provisions of the Homeownership and Equity
                               Protection Act of 1994 as amended; (b) "high
                               cost" mortgage loans, "covered" mortgage loans,
                               "high risk home" mortgage loans or "predatory"
                               mortgage loans or any other comparable term, no
                               matter how defined under any federal, state or
                               local law, (c) mortgage loans subject to any
                               comparable federal, state or local statutes or
                               regulations, or any other statute or regulation
                               providing for heightened regulatory scrutiny or
                               assignee liability to holders of such mortgage
                               loans, or (d) High Cost Loans or Covered Loans as
                               applicable (as such terms are defined in the
                               Standard & Poor's LEVELS(R) Glossary Revised,
                               Appendix E, as such Appendix E may be revised
                               from time to time).

                               ABFS does not and will not engage in any
                               predatory or deceptive lending practices,
                               including but not limited to, the extension of
                               credit to a mortgagor without regard for the
                               mortgagor's ability to repay the mortgage loan
                               and the extension of credit to a mortgagor which
                               has no apparent benefit to the mortgagor, in
                               connection with the mortgage loans that it
                               originates.

                               ABFS does not and will not require mortgagors to
                               purchase any credit life, disability, accident or
                               health insurance product as a condition of
                               obtaining an extension of credit.

                               The information set forth in the multi-state
                               prepayment charge grid attached on Schedule F
                               attached to the Commitment Letter is complete,
                               true and correct in all material respects and
                               each prepayment charge imposed by ABFS in the
                               mortgage loans that it originates is permissible,
                               enforceable and collectable under applicable
                               federal and state law.

Events of Default:             Events of Default to include, but not be limited
                               to, failure to satisfy any of the "Initial
                               Conditions," any of the "On-Going Conditions",
                               those events of default under Chrysalis Loan
                               Agreement, and the following:

                               Failure by ABFS to obtain required Additional
                               Warehouse Lines required by the Wet Warehouse
                               Facility Documentation.

                               Loss of servicing rights under (i) more than two
                               outstanding ABFS securitizations or (ii) any
                               warehouse facility (including the Wet Warehouse).

                               Any other customary Events of Default and any
                               events of default under the Residual Repo.

                                     A-1-15

<PAGE>

                               Upon an Event of Default, the Wet Warehouse will
                               terminate and all outstandings thereunder,
                               including, without limitation, amounts due under
                               the VFN, will be immediately due and payable.
                               Investor shall be entitled to enforce any rights
                               and all remedies pursuant to the Wet Warehouse
                               Facility Documentation and applicable law,
                               including without limitation its right to sell
                               all or portions of the Loan Collateral on a
                               servicing-released basis and its rights with
                               respect to the Trust 3 P Certificate and the
                               other Additional Collateral.

Governing Law                  State of New York.

Jurisdiction:                  Federal and State Courts located in the borough
                               of Manhattan, City of New York.

Counsel to Investor
and Patriot:                   Thacher Proffitt & Wood LLP and Kirkland &
                               Ellis LLP.

Opinions:                      Closing opinions acceptable to Investor
                               including, but not limited to, perfected security
                               interest opinions with respect to all of the Wet
                               Warehouse Collateral, a non-consolidation opinion
                               (which shall include, but not be limited to,
                               opinions regarding the non-consolidation of the
                               Issuer, on the one hand, with Trust 1, Trust 3,
                               Holdings and American Business Financial
                               Services, Inc., on the other hand) and true sale
                               opinions with respect to the Wet Loans and
                               Eligible Loans as between the Originators and
                               Trust 3, and Trust 3 and the Issuer.

                                     A-1-16

<PAGE>


                             Annex I to Exhibit A-1
                             ----------------------

                              Investor Compensation
                              ---------------------


Pricing:                       Rate - 1 month Libor + 2.50% per annum on all
                               outstanding VFN balances, payable on the last day
                               of the relevant interest period. Interest
                               generally shall be due monthly, and interest
                               shall also be due whenever the VFN balance is
                               repaid (e.g., when Eligible Loans are released to
                               be refinanced under another warehouse line or
                               sold or securitized) on the balance repaid.

                               Default Rate - Rate plus 5.00% applicable upon
                               and following an Event of Default and applicable
                               to overdue interest, fees and other obligations,
                               as well as to principal amounts then due.

                               Payment Date - Generally to coincide with each
                               Roll Date under the Residual Repo. Payment Dates
                               may be scheduled more frequently as Investor
                               deems necessary to apply proceeds arising from
                               the refinancing, sale or securitization of
                               Eligible Loans.

Fees:                          Commitment Fee - US$950,000, payable by 6:00 p.m.
                               on the date of acceptance by ABFS of the
                               Commitment Letter.

                               Closing Fee - US$250,000 payable on the Closing
                               Date; provided, however, that as agreed in the
                               Extension Letter, if the Closing Date occurs on
                               or prior to November 5, 2004 (or such later date
                               as Issuer and Investor may agree), Investor will
                               credit to the Closing Fee the US$250,000 fee paid
                               by ABFS in connection with the Extension Letter,
                               resulting in a reduction of the Closing Fee to
                               US$-0-.

                               Facility Fee - US$600,000, payable on the first
                               anniversary of the Closing Date.

                               Credit Support and Arrangement Fee - US$150,000
                               per month, payable on the Closing Date and on a
                               specific day of each month thereafter (as shall
                               be determined by the Investor). Credit Support
                               and Arrangement Fees payable for the first twelve
                               (12) months after the Closing Date (US$1,800,000
                               in aggregate) will be fully-earned on the Closing
                               Date. Credit Support and Arrangement Fees payable
                               thereafter will be fully earned as they become
                               due.

                               Non-Use Fee - 0.50% per annum on the undrawn
                               portion of the Wet Warehouse.

                                     A-1-17

<PAGE>

                               Monitoring Fee - US$50,000 per calendar quarter,
                               payable on the Closing Date and thereafter at
                               three-month intervals during the term of the Wet
                               Warehouse, for a total of US$600,000. Monitoring
                               Fees payable in respect of the first four (4)
                               calendar quarters after the Closing Date
                               (US$200,000 in aggregate) will be fully earned on
                               the Closing Date. Monitoring Fees payable
                               thereafter will be fully earned as they come due.

                               Termination Fee - US$600,000 payable in
                               connection with any termination by Issuer of the
                               Wet Warehouse as contemplated in the first
                               paragraph under "Wet Warehouse Collateral" in
                               Exhibit A-1.

Rate and
Fee Basis:                     Shall at all times be calculated on the basis of
                               a 360-day year and the actual number of days
                               elapsed.



                                     A-1-18

<PAGE>


                                                                     EXHIBIT A-2
                                                                     -----------

                   American Business Financial Services, Inc.

         Residential Mortgage Loan Residual Master Repurchase Agreement

                Summary of Terms and Conditions for Residual Repo

                                October 26, 2004

I.       PARTIES

Seller:                        Trust 4. Holdings will contribute the Purchased
                               Assets (defined below) to Trust 3 on the Closing
                               Date. Trust 3 will contribute the Purchased
                               Assets to the Seller on the Closing Date.

Purchaser:                     A limited purpose entity to be formed by Patriot
                               (or one or more of its affiliates and/or
                               subsidiaries). Purchasers may include
                               participants in addition to Patriot, and Patriot
                               may obtain capital from or arrange direct
                               participation by third parties on a senior or
                               junior basis (such purchasers, collectively, the
                               "Purchaser"). Purchaser shall from time to time
                               enter into transactions (the "Transactions") to
                               purchase Purchased Securities (as defined below)
                               with an obligation of Seller to repurchase the
                               Purchased Securities.

Seller Owner
Trustee:                       The same financial institution designated as the
                               Issuer Owner Trustee and Parent Owner Trustee in
                               Exhibit A-1.

Purchaser Co-
Trustees:                      The same financial institutions designated as the
                               Investor Co-Trustees in Exhibit A-1.

Purchased Securities:          Residual interests set forth on Annex II hereto
                               (subject to modification by Patriot in accordance
                               with the immediately succeeding paragraph),
                               relating to one or more issued and outstanding
                               ABFS securitizations, together with (i) any and
                               all rights of Seller, Servicer and/or applicable
                               affiliates thereof to effect a cleanup call with
                               respect to the securitization(s) to which such
                               residual interests relate and (ii) any and all
                               rights to purchase delinquent loans (including,
                               without limitation, for the purpose of managing
                               delinquency and loss percentages used to
                               calculate whether a "Trigger Event" or a similar
                               event has occurred under the related pooling and
                               servicing agreement or the related sale and
                               servicing agreement pursuant to which the
                               Purchased Securities were issued); provided, that
                               Purchaser shall only control the exercise of such
                               rights to purchase delinquent loans from the
                               related trust upon an Event of Default (and,
                               accordingly, ABFS may exercise such rights prior
                               thereto) (collectively, the "Purchased
                               Securities"). Purchased Securities will be

                                     A-2-1

<PAGE>

                               delivered to Purchaser free and clear of any and
                               all liens and encumbrances, together with bond
                               powers necessary and sufficient to permit
                               re-registration of the Purchased Securities in
                               the name of Purchaser. Any Additional Residual
                               Interests (as defined below) shall also
                               constitute Purchased Securities.

                               The parties agree that the initial selection of
                               the Purchased Securities set forth on Annex II
                               hereto may be adjusted by Purchaser (in
                               reasonable consultation with ABFS and Clearwing
                               Capital, LLC) at any time on or prior to the date
                               and time by which Patriot shall have delivered
                               written confirmation of its investment committee
                               approval of the Committed Facility, provided that
                               the aggregate book value of the Purchased
                               Securities finally selected - determined by
                               reference to ABFS's Analysis of Interest-Only
                               Strip and MSA Fair Values for deals 1998-3
                               through 2003-2, as at 9/30/04, provided by ABFS
                               to Patriot on October 8, 2004 (as to any residual
                               interest included in such analysis, the "ABFS
                               Book Value") - does not exceed by more than
                               US$3,000,000 the aggregate ABFS Book Value of the
                               Purchased Securities identified in Annex II to
                               Exhibit A-2. Notwithstanding the foregoing, the
                               parties agree that the Preliminary Securities
                               Purchase Price may be adjusted by Purchaser at
                               any time prior to the Closing Date to reflect any
                               change in the Repo Market Value of the Purchased
                               Securities which may result from distributions on
                               the Purchased Securities after September 30,
                               2004, changes in market conditions or other
                               factors as determined by Purchaser (any such
                               adjustment, a "Pre-Closing Adjustment") (see also
                               "Securities Purchase Price" below).

II.      FACILITY AMOUNT AND STRUCTURE

Facility Amount:               The Initial Securities Purchase Price (as defined
                               below), which shall in no event exceed
                               US$23,000,000 (the "Facility Amount"). The
                               Facility Amount shall reflect any Pre-Closing
                               Adjustment and shall be reduced by any and all
                               Permanent Margin Payments (defined below), which
                               shall be applied to permanently reduce the then
                               current Securities Purchase Price on the
                               applicable Roll Date (as defined below) (or other
                               date selected by Purchaser in its sole
                               discretion).

Termination Date:              Two (2) years from Closing Date.

Structure:                     Repurchase facility. On the Closing Date,
                               Purchaser will acquire the Purchased Securities
                               from Seller pursuant to the terms of the Master
                               Repurchase Agreement (as defined below), for the
                               Preliminary Securities Purchase Price (adjusted
                               to reflect any Pre-Closing Adjustment). Purchaser
                               will receive all payments and distributions on
                               the Purchased Securities directly from the
                               issuers thereof, to be applied pursuant to
                               "Distributions" below.

                                     A-2-2

<PAGE>

                               Purchaser reserves the right to include one or
                               more purchasers in the Residual Repo provided
                               that the resulting structure provides ABFS with
                               substantially identical funding availability and
                               pricing to the availability and pricing described
                               herein.


Securities
Purchase Price:                Initially, US$23,000,000 (the "Preliminary
                               Securities Purchase Price"), which amount shall
                               be adjusted to reflect any Pre-Closing Adjustment
                               (so adjusted, the "Initial Securities Purchase
                               Price"), and on any date following the Closing
                               Date, the Initial Securities Purchase Price less
                               the sum of all Permanent Margin Payments made by
                               Seller to Purchaser up to such date (each such
                               resulting amount, the then applicable "Securities
                               Purchase Price").

Roll Date:                     The 26th calendar day of each month (or, if such
                               day is not a business day, the next succeeding
                               business day) or such other calendar day of each
                               month agreed by the parties and reflected in the
                               Residual Repo Facility Documentation.

Securities
Repurchase Price:              The aggregate of (i) the Securities Purchase
                               Price; (ii) any accrued and unpaid Price
                               Differential; and (iii) any accrued and unpaid
                               fees (including any due and unpaid Repurchase
                               Option Premium), expenses, breakage costs and/or
                               indemnity amounts, such amounts to be paid in
                               connection with Seller's repurchase of the
                               Purchased Securities on the Termination Date in
                               accordance with the Residual Repo Facility
                               Documentation.

Price Differential:            As of any date of determination, the aggregate
                               amount obtained by daily application of the
                               Pricing Rate (or during the continuation of an
                               Event of Default, by daily application of the
                               Default Rate) to the Securities Purchase Price on
                               a 360-day-per-year basis for the actual number of
                               days elapsed during the period commencing on (and
                               including) the Closing Date and ending on (but
                               excluding) the date of determination (reduced by
                               any amount of such Price Differential in respect
                               of such period previously paid by Seller to
                               Purchaser). The accrued Price Differential shall
                               be paid monthly on each Roll Date.

Valuation:                     The value of the Purchased Securities (the "Repo
                               Market Value") will be determined by Purchaser in
                               its sole discretion and will be marked to market
                               daily at Purchaser's sole discretion.

Margin Call:                   If on any date the Repo Market Value of the
                               Purchased Securities is less than the Purchaser's
                               Margin Amount for all Purchased Securities (such
                               value shortfall, a "Margin Deficit"), then
                               Purchaser may make a margin call on Seller (a
                               "Margin Call"). If a Margin Call is made, Seller

                                     A-2-3

<PAGE>

                               shall be obligated, but shall have the option, to
                               (A) transfer cash or additional residual
                               interests to Purchaser acceptable to Purchaser in
                               its sole discretion ("Additional Residual
                               Interests"), so that such cash (which shall be
                               valued at the then applicable Purchaser's Margin
                               Percentage) and the Repo Market Value of the
                               Purchased Securities, including any such
                               Additional Residual Interests, will thereupon
                               equal or exceed the Purchaser's Margin Amount
                               and/or (B) pay to Purchaser such amount of the
                               outstanding Securities Purchase Price as is
                               needed to eliminate the Margin Deficit (and any
                               such payment shall permanently reduce the
                               Securities Purchase Price and the then
                               outstanding Facility Amount) (each such payment,
                               a "Permanent Margin Payment"). Seller shall have
                               one (1) business day to specify the extent to
                               which it is exercising options (A) and/or (B)
                               above (and otherwise will be deemed to have
                               elected option (B) above), and shall have an
                               additional four (4) business days to satisfy any
                               such Margin Call. Residual Repo Available
                               Collections (as defined below) may - and, to the
                               extent Seller fails to make an election following
                               a Margin Call, such amounts will - be applied as
                               and when provided below to make Permanent Margin
                               Payments. Any and all cash transferred by Seller
                               in connection with a Margin Call pursuant to
                               option (A) above will be deposited into an
                               account controlled by the Purchaser (the
                               "Residual Repo Cash Margin Account"). Amounts at
                               any time on deposit in the Residual Repo Cash
                               Margin Account may be applied by the Purchaser to
                               offset any deficit in amounts available to effect
                               the payments contemplated under priorities
                               "first" through "fifth" under "Distributions"
                               below and will be released to the Seller if the
                               Seller makes any Permanent Margin Payments needed
                               to eliminate any Margin Deficit and is not in
                               default under the Residual Repo or the Wet
                               Warehouse.

Purchaser's
Margin Amount:                 As of any date, the amount equal to the product
                               of the Purchaser's Margin Percentage and the
                               Securities Repurchase Price.

Purchaser's
Margin Percentage:             Initially, two hundred percent (200%); provided,
                               that on each of the first ten (10) Roll Dates,
                               the Purchaser's Margin Percentage shall increase
                               by five percentage points (5%), reaching two
                               hundred fifty percent (250%) on the tenth (10th)
                               Roll Date and remaining at 250% at all times
                               thereafter.

Optional
Termination:                   On any Roll Date prior to the Termination Date,
                               the Seller may terminate the Residual Repo by
                               repurchasing the Purchased Securities (in whole
                               but not in part) for the Securities Repurchase
                               Price (including therein any unpaid Repurchase
                               Option Premium) and paying the applicable Exit
                               Fee to the Purchaser (a "Seller Termination").

                                     A-2-4

<PAGE>

Repo Additional
Collateral:                    The Wet Warehouse Collateral (other than the
                               Repo-related Collateral) (the "Repo Additional
                               Collateral") will secure the Securities
                               Repurchase Price (expressly including all accrued
                               Price Differential, fees and all expenses and
                               indemnities at any time reimbursable to
                               Purchaser), except that the Trust 3 P Certificate
                               will secure such amounts only up to the limits
                               contemplated under "Wet Warehouse Collateral" in
                               Exhibit A-1.

Distributions:                 Any distributions on or with respect to the
                               Purchased Securities (the "Residual Repo
                               Available Collections"), plus the proceeds of any
                               Repo Additional Collateral (to the extent
                               necessary to make the payments set forth in
                               priorities "first" through "fourth" below), shall
                               be deposited into a collection/distribution
                               account (established under such terms as are
                               satisfactory to the Purchaser) and applied on a
                               monthly basis on each Roll Date (taking into
                               account the election or deemed election of Seller
                               with respect to any Margin Call as contemplated
                               under "Margin Call" above) as follows:

                               first, to the Purchaser to pay any Repurchase
                               Option Premium and other fees then due;

                               second, to the Purchaser to pay the accrued Price
                               Differential;

                               third, to the Purchaser for any Permanent Margin
                               Payments then due and payable;

                               fourth, to the Purchaser to pay any other amounts
                               due to Purchaser under the Master Repurchase
                               Agreement;

                               fifth, remaining Residual Repo Available
                               Collections to the Investor or other applicable
                               parties (other than the Issuer) under the Wet
                               Warehouse to the extent the funds available under
                               such facility are insufficient to make the
                               required payments thereunder; and

                               sixth, provided no Event of Default has occurred
                               and is continuing under the Residual Repo, the
                               remainder to the Seller.

                               Amounts due Purchaser under priorities "first"
                               through "fourth" shall be deemed to be "Required
                               Distributions" for purposes of the Residual Repo,
                               and failure of Purchaser to receive such Required
                               Distributions in full, by operation of the
                               waterfall above or otherwise, shall constitute an
                               Event of Default under the Residual Repo.

                                     A-2-5

<PAGE>

                               Release of excess Residual Repo Available
                               Collections received on the 15th of each month
                               may be permitted by the Purchaser prior to the
                               Roll Date subject to such conditions as the
                               Purchaser shall determine in its sole discretion.

III.     CERTAIN PAYMENT PROVISIONS

Purchaser Fees and
Premiums:                      As set forth on Annex I to Exhibit A-2.

Other Fees and
Expenses:                      Fees and expenses of the Seller Owner Trustee,
                               Purchaser Co-Trustees and Custodian to be paid by
                               ABFS and such fees and expenses shall be separate
                               and apart from any fees and expenses owed to
                               Patriot or Purchaser (including the Monitoring
                               Fee and Work Fee). In addition, all out-of-pocket
                               fees and expenses incurred by the Purchaser in
                               connection with the administration, amendment
                               and/or enforcement of the Residual Repo will be
                               reimbursed by the Seller on demand.

IV.      CERTAIN CONDITIONS

Initial Conditions:            The availability of the Residual Repo shall be
                               conditioned upon satisfaction of, among other
                               things, the following conditions precedent not
                               later than November 5, 2004 (the date upon which
                               all such conditions precedent shall be satisfied,
                               the "Closing Date"):

                               (a) The Seller shall have executed and delivered
                               definitive repurchase documentation, including a
                               Master Repurchase Agreement (the "Master
                               Repurchase Agreement"), with respect to the
                               Residual Repo in form and substance satisfactory
                               to Purchaser (the "Residual Repo Facility
                               Documentation");

                               (b) The Purchaser and all participants therein or
                               lenders thereto shall have received all fees
                               required to be paid, and reimbursement for all
                               expenses for which invoices have been presented,
                               on or before the Closing Date;

                               (c) Purchaser shall have entered into the
                               intercreditor agreement(s) referred to in Exhibit
                               A-1;

                               (d) Patriot shall have received copies of
                               certified resolutions of the Board of Directors
                               of ABFS and Holdings (including any applicable
                               committees thereof) authorizing and approving the
                               Residual Repo, in form and substance satisfactory
                               to Patriot; and

                               (e) All Initial Conditions to the Wet Warehouse
                               shall have been satisfied.

                                     A-2-6

<PAGE>

On-Going Conditions:           The availability of the funding provided by the
                               Residual Repo shall at all times be conditioned
                               upon (i) the continued accuracy of all
                               representations and warranties in the Residual
                               Repo Facility Documentation (including, without
                               limitation, the material adverse change and
                               litigation representations), (ii) there not
                               having occurred any Event of Default and (iii)
                               the satisfaction of any other applicable On-Going
                               Conditions under the Wet Warehouse. As used
                               herein and in the Residual Repo Facility
                               Documentation a "material adverse change" shall
                               mean any event, development or circumstance that
                               has had or could reasonably be expected to have a
                               material adverse effect on (a) the business,
                               assets, property, condition (financial or
                               otherwise), or prospects of ABFS and its
                               affiliates taken as a whole or the value of the
                               Purchased Securities or (b) the validity or
                               enforceability of any of the Residual Repo
                               Facility Documentation or the rights or remedies
                               of the Purchaser thereunder.

V.       CERTAIN DOCUMENTATION MATTERS

The Residual Repo Facility Documentation shall contain representations,
warranties, covenants and events of default customary for agreements of this
type and other terms deemed appropriate by the Purchaser, including, without
limitation:

Covenants/
Representations:               Covenants/representations to include but not be
                               limited to those set forth in Chrysalis Loan
                               Agreement as well as all applicable covenants and
                               representations made with respect to the Wet
                               Warehouse and those appropriate for financings of
                               residual interests.

Events of Default:             Events of Default to include, but not limited to,
                               those customary in repurchase agreements and in
                               financings of residual interests, as well as any
                               of the "Initial Conditions," any of the "On-Going
                               Conditions", and all Events of Default set forth
                               with respect to the Wet Warehouse. Failure of
                               Purchaser to receive Required Distributions as
                               contemplated hereinabove shall also constitute an
                               Event of Default.

                               Upon an Event of Default, the Master Repurchase
                               Agreement will terminate and the aggregate
                               Securities Repurchase Price of the Purchased
                               Securities will be immediately due and payable.
                               Purchaser shall be entitled to any and all
                               remedies pursuant to the Master Repurchase
                               Agreement documents and applicable law.

Governing Law:                 State of New York.

Jurisdiction:                  Federal and State Courts located in the borough
                               of Manhattan, City of New York.

Counsel to the
Purchaser and Patriot:         Thacher Proffitt & Wood LLP and Kirkland & Ellis
                               LLP.

                                     A-2-7

<PAGE>

Opinions:                      Standard closing opinions acceptable to Purchaser
                               including, but not limited to, a perfected
                               security interest opinion, a nonconsolidation
                               opinion, a true sale opinion regarding the sales
                               of the Purchased Securities to Trust 3 and to the
                               Seller, and a "securities contract" opinion.

VI.      ACKNOWLEDGEMENTS WITH RESPECT TO RESIDUAL REPO

ABFS acknowledges by signing the Commitment Letter that (i) Purchaser's
assessments of Repo Market Value will be made in Purchaser's sole discretion;
(ii) as current distributions on the Purchased Securities are received, future
distributions, and therefore the discounted value of such distributions, will
decline, which will have the general effect of reducing the Securities Purchase
Price over time; (iii) because distributions on the Purchased Securities will be
applied to make required Permanent Margin Payments to Purchaser prior to any
releases of funds to Seller, Seller may experience significant volatility in the
cash flows it receives from the Purchased Securities, and may receive no such
cash flows over extended periods of time; and (iv) the management and board of
directors of ABFS fully understand the implications of the Residual Repo as they
relate to the ongoing financial and liquidity needs of ABFS.







                                     A-2-8

<PAGE>


                             Annex I to Exhibit A-2
                             ----------------------

                             Purchaser Compensation
                             ----------------------


Pricing:          Repurchase Option Premium: An amount equal to 6.0% of the
                  Facility Amount, payable on the Closing Date, plus another
                  amount, payable on the one-year anniversary of the Closing
                  Date, equal to 6.0% of the Facility Amount as of such date.

                  Pricing Rate: As of any date of calculation, 13.5% per annum,
                  compounded monthly.

                  Default Rate: As of any date of calculation, 20% per annum,
                  compounded monthly, applicable upon and following an Event of
                  Default.

Fees:             Exit Fee - 3.0% of the Facility Amount (immediately prior to
                  the Seller Termination or Termination Date, as applicable),
                  payable upon any Seller Termination or otherwise on the
                  Termination Date.

                  Monitoring Fee - An amount per month to be determined by the
                  Purchaser, based in part on the number of residual interests
                  which are included in the Purchased Securities, payable until
                  the earlier of a Seller Termination and the Termination Date.
                  Substantially all of the Monitoring Fee will be applied to
                  offset fees assessed by an independent residual valuation
                  expert to analyze and value the Purchased Securities on behalf
                  of the Purchaser on a monthly basis.

                                     A-2-9

<PAGE>

                             Annex II to Exhibit A-2
                             -----------------------

                 Schedule of Residual Interests to be Purchased
                 ----------------------------------------------


1.    Class X Certificate, No. X-1, issued by ABFS Mortgage Loan Trust 2001-2.

2.    Certificate No. 1, issued by ABFS Mortgage Loan Trust 2000-2.

3.    Certificate No. 2, issued by ABFS Mortgage Loan Trust 2000-2.

4.    Pool I Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-4.

5.    Pool I Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-4.

6.    Pool II Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-4.

7.    Pool II Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-4.

8.    Pool I Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-3.

9.    Pool I Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-3.

10.   Pool II Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-3.

11.   Pool II Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-3.

12.   Pool I Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-2.

13.   Pool I Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-2.

14.   Pool II Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-2.

15.   Pool II Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-2.

16.   Pool I Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-1.

17.   Pool I Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-1.

18.   Pool II Certificate No. 1, issued by ABFS Mortgage Loan Trust 1999-1.

19.   Pool II Certificate No. 2, issued by ABFS Mortgage Loan Trust 1999-1.

20.   Pool I Certificate No. 1, issued by ABFS Mortgage Loan Trust 1998-4.

21.   Pool I Certificate No. 2, issued by ABFS Mortgage Loan Trust 1998-4.

22.   Pool II Certificate No. 1, issued by ABFS Mortgage Loan Trust 1998-4.

23.   Class R Certificate, No. R-1, issued by ABFS Mortgage Loan Trust 1998-3

                                     A-2-10