American Business Financial Services, Inc.

Client Profile
American Business Financial Services, Inc. (‘ABFS’ or the ‘Company’) originates, sells and services sub-prime consumer mortgage loans. These loans are secured by first and second mortgages on one-to-four family residences and provided primarily to credit-impaired borrowers who are generally unable to obtain financing from traditional banks or savings and loan associations.
Situation
In 2003 and 2004, the Company endured a liquidity crisis due to (1) its inability to securitize loans, (2) reduced warehouse line capacity, and (3) the cessation of its subordinated note program. As a result, the Company filed for Chapter 11 bankruptcy protection in January 2005. As part of the bankruptcy filing, ABFS was instructed to market for sale the servicing rights for owned and securitized loans to provide additional liquidity to the estate to assist in the wind down of the Company’s operations.
Solution
SSG was retained to facilitate the sale of ABFS’ loan serving assets through a Chapter 11 Section 363 sale. SSG assisted ABFS in its successful completion of the sale involving the loan servicing rights to a strategic investor, Ocwen Financial Corporation. The transaction closed in May 2005