x
|
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Maryland
(State
or Other Jurisdiction of Incorporation or
Organization) |
74-2830661
(I.R.S.
Employer Identification No.)
|
2114
Central Street, Suite 600, Kansas City, MO
(Address
of Principal Executive Office)
|
64108
(Zip
Code)
|
Large
accelerated filer ¨
|
Non-accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Small business
filer x
|
Part
I
|
||
Item
1.
|
Business
|
2
|
Item
1A.
|
Risk
Factors
|
3
|
Item
1B.
|
Unresolved
Staff Comments
|
9
|
Item
2.
|
Properties
|
9
|
Item
3.
|
Legal
Proceedings
|
9
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
12
|
Part
II
|
||
Item
5.
|
Market
For Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases
of Equity Securities
|
12
|
Item
6.
|
Selected
Financial Data
|
13
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
34
|
Item
8.
|
Financial
Statements and Supplementary Data
|
35
|
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
86
|
Item
9A.
|
Controls
and Procedures
|
86
|
Item
9B.
|
Other
Information
|
88
|
Part
III
|
||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
88
|
Item
11.
|
Executive
Compensation
|
88
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder
Matters
|
89
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
89
|
Item
14.
|
Principal
Accounting Fees and Services
|
89
|
89
|
||
Part
IV
|
||
Item
15.
|
Exhibits,
Financial Statement Schedules
|
90
|
|
·
|
interest
rate fluctuations may harm our cash flow as the spread between the
interest rates we pay on our borrowings and hedges and the interest rates
we receive on our mortgage assets
narrows;
|
|
·
|
the
value of our residual and subordinated securities and the income we
receive from them are based primarily on LIBOR, and an increase in LIBOR
increases funding costs which reduces the cash flow we receive from, and
the value of, these securities;
|
|
·
|
existing
borrowers with adjustable-rate mortgages or higher risk loan products may
incur higher monthly payments as the interest rate increases, and
consequently may experience higher delinquency and default rates,
resulting in decreased cash flows from, and decreased value of, our
mortgage securities; and
|
|
·
|
mortgage
prepayment rates vary depending on such factors as mortgage
interest rates and market conditions, and changes in prepayment rates may
harm our earnings and the value of our mortgage
securities.
|
|
·
|
actual
or perceived changes in our ability to continue as a going
concern;
|
|
·
|
actual
or anticipated changes in the delinquency and default rates on mortgage
loans, in general, and specifically on the loans we invest in through our
mortgage securities;
|
|
·
|
actual
or anticipated changes in residential real estate
values;
|
|
·
|
actual
or anticipated changes in market interest
rates;
|
|
·
|
actual
or anticipated changes in our earnings and cash
flow;
|
|
·
|
general
market and economic conditions, including the operations and stock
performance of other industry
participants;
|
|
·
|
developments
in the subprime mortgage lending industry or the financial services sector
generally;
|
|
·
|
the
impact of new state or federal legislation or adverse court
decisions;
|
|
·
|
the
activities of investors who engage in short sales of our common
stock;
|
|
·
|
actual
or anticipated changes in financial estimates by securities
analysts;
|
|
·
|
sales,
or the perception that sales could occur, of a substantial number of
shares of our common stock by
insiders;
|
|
·
|
additions
or departures of senior management and key personnel;
and
|
|
·
|
actions
by institutional shareholders.
|
|
·
|
authorize
the issuance of additional shares of common stock or preferred stock
without shareholder approval, including the issuance of shares of
preferred stock that have preference rights over the common stock with
respect to dividends, liquidation, voting and other matters or shares of
common stock that have preference rights over our outstanding common stock
with respect to voting;
|
|
·
|
classify
or reclassify any unissued shares of common stock or preferred stock and
to set the preferences, rights and other terms of the classified or
reclassified shares; and
|
|
·
|
issue
additional shares of common stock or preferred stock in exchange for
outstanding securities, with the consent of the holders of those
securities.
|
Dividends
|
||||||||||||||||||||
High
|
Low
|
Date
Declared
|
Date Paid
|
Amount
Per Share
|
||||||||||||||||
2007
|
||||||||||||||||||||
First
Quarter
|
$ | 105.80 | $ | 13.72 | N/A | N/A | N/A | |||||||||||||
Second
Quarter
|
40.00 | 19.56 | N/A | N/A | N/A | |||||||||||||||
Third
Quarter
|
34.68 | 5.10 | N/A | N/A | N/A | |||||||||||||||
Fourth
Quarter
|
9.32 | 1.16 | N/A | N/A | N/A | |||||||||||||||
2008
|
||||||||||||||||||||
First
Quarter
|
$ | 3.44 | $ | 1.10 | N/A | N/A | N/A | |||||||||||||
Second
Quarter
|
2.03 | 1.00 | N/A | N/A | N/A | |||||||||||||||
Third
Quarter
|
1.99 | .28 | N/A | N/A | N/A | |||||||||||||||
Fourth
Quarter
|
1.01 | .22 | N/A | N/A | N/A |
Total
Number of
Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Plans or
Programs (A)
|
|||||||||||||
October
1, 2008 – October 31, 2008
|
- | - | - | $ | 1,020 | |||||||||||
November
1, 2008 – November 30, 2008
|
- | - | - | 1,020 | ||||||||||||
December
1, 2008 – December 31, 2008
|
- | - | - | 1,020 |
(A)
|
A
current report on Form 8-K was filed on October 2, 2000 announcing that
the Board of Directors authorized the Company to repurchase its common
shares, bringing the total authorization to $9
million.
|
|
·
|
maintenance
of adequate liquidity to sustain us and allow us to take advantage of
investment opportunity, and
|
|
·
|
generating
income for our shareholders.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Cash
and cash equivalents, including restricted cash
|
$ | 30,836 | $ | 34,362 | ||||
Net
loss income available to common shareholders, per diluted
share
|
(72.37 | ) | (78.55 | ) |
For
the Year Ended December 31,
|
||||||||||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||||||||||
Securitization
Trust
(A)
|
Estimated
Fair Value |
Discount
Rate |
Constant
Pre- payment Rate |
Expected
Credit
Losses
|
Estimated
Fair Value |
Discount
Rate |
Constant
Pre- payment Rate |
Expected
Credit Losses |
||||||||||||||||||||||||
NMFT
Series :
|
||||||||||||||||||||||||||||||||
2002-3
|
$ | 2,041 | 25 | % | 16 | % | 0.8 | % | $ | 1,932 | 25 | % | 24 | % | 0.6 | % | ||||||||||||||||
2003-1
|
5,108 | 25 | 13 | 2.0 | 3,260 | 25 | 20 | 1.7 | ||||||||||||||||||||||||
2003-2
|
2,272 | 25 | 12 | 1.9 | 2,817 | 25 | 18 | 1.2 | ||||||||||||||||||||||||
2003-3
|
2,402 | 25 | 12 | 2.7 | 1,233 | 25 | 16 | 1.2 | ||||||||||||||||||||||||
2003-4
|
1 | 25 | 13 | 2.7 | 1,279 | 25 | 20 | 1.6 | ||||||||||||||||||||||||
2004-1
|
16 | 25 | 15 | 3.4 | 180 | 25 | 24 | 2.4 | ||||||||||||||||||||||||
2004-2
|
27 | 25 | 14 | 3.5 | 180 | 25 | 23 | 2.4 | ||||||||||||||||||||||||
2004-3
|
73 | 25 | 15 | 4.4 | 986 | 25 | 24 | 3.0 | ||||||||||||||||||||||||
2004-4
|
11 | 25 | 16 | 4.3 | 48 | 25 | 26 | 2.6 | ||||||||||||||||||||||||
2005-1
|
− | 25 | 17 | 6.2 | 512 | 25 | 27 | 3.6 | ||||||||||||||||||||||||
2005-2
|
− | 25 | 16 | 7.0 | 642 | 25 | 24 | 3.3 | ||||||||||||||||||||||||
2005-3
|
− | 25 | 17 | 9.3 | 1,562 | 25 | 24 | 3.6 | ||||||||||||||||||||||||
2005-4
|
3 | 25 | 18 | 11.5 | 1,556 | 25 | 27 | 4.5 | ||||||||||||||||||||||||
2006-2
|
73 | 25 | 19 | 17.0 | 2,301 | 25 | 32 | 6.8 | ||||||||||||||||||||||||
2006-3
|
125 | 25 | 20 | 19.8 | 2,994 | 25 | 31 | 8.4 | ||||||||||||||||||||||||
2006-4
|
136 | 25 | 20 | 20.0 | 2,960 | 25 | 32 | 8.2 | ||||||||||||||||||||||||
2006-5
|
214 | 25 | 20 | 24.0 | 4,217 | 25 | 31 | 11.0 | ||||||||||||||||||||||||
2006-6
|
286 | 25 | 19 | 24.4 | 4,712 | 25 | 30 | 10.0 | ||||||||||||||||||||||||
Total
|
$ | 12,788 | $ | 33,371 |
S&P
Rating
|
Original
Face
|
Amortized
Cost
Basis
|
Fair
Value
|
Number
of
Securities
|
Weighted
Average
Yield
|
|||||||||||||||
Subordinated
Securities:
|
||||||||||||||||||||
Investment
Grade (A)
|
$ | 12,505 | $ | 11,891 | $ | 833 | 3 | 6.25 | % | |||||||||||
Non-investment
Grade (B)
|
422,609 | 406,125 | 5,547 | 87 | 8.08 | |||||||||||||||
Total
Subordinated Securities
|
435,114 | 418,016 | 6,380 | 90 | 7.84 | |||||||||||||||
Residual
Securities:
|
||||||||||||||||||||
Unrated
|
59,500 | 15,952 | 705 | 1 | 25.00 | |||||||||||||||
Total
|
$ | 494,614 | $ | 433,968 | $ | 7,085 | 91 | 9.55 | % |
S&P
Rating
|
Original
Face
|
Amortized
Cost
Basis
|
Fair
Value
|
Number
of
Securities
|
Weighted
Average
Yield
|
|||||||||||||||
Subordinated
Securities:
|
||||||||||||||||||||
Investment
Grade (A)
|
$ | 389,881 | $ | 367,581 | $ | 80,004 | 91 | 11.46 | % | |||||||||||
Non-investment
Grade (B)
|
45,233 | 38,514 | 4,458 | 17 | 17.05 | |||||||||||||||
Total
Subordinated Securities
|
435,114 | 406,095 | 84,462 | 108 | 11.76 | |||||||||||||||
Residual
Securities:
|
||||||||||||||||||||
Unrated
|
N/A | 41,275 | 24,741 | 1 | 21.00 | |||||||||||||||
Total
|
$ | 435,114 | $ | 447,370 | $ | 109,203 | 109 | 13.85 | % |
(A)
|
Investment
grade includes all securities with S&P ratings above
BB+.
|
(B)
|
Non-investment
grade includes all securities with S&P ratings below
BBB-.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Interest
payable
|
$ | 10,177 | $ | 6,879 | ||||
Value
of derivatives owned by mortgage loan securitization
trusts
|
9,102 | 6,896 | ||||||
Obligations
under office space lease
|
4,558 | 1,457 | ||||||
Taxes
payable
|
3,893 | 11,362 | ||||||
Global
facility financing fee
|
− | 11,814 | ||||||
Accrued
expenses and other liabilities
|
6,198 | 14,984 | ||||||
Total
|
$ | 33,928 | $ | 53,392 |
For
the Year Ended
December
31,
|
||||||||
2008
|
2007
|
|||||||
Interest
income:
|
||||||||
Mortgage
securities
|
$ | 46,997 | $ | 102,500 | ||||
Mortgage
loans held-in-portfolio
|
186,601 | 258,663 | ||||||
Other
interest income
|
1,411 | 5,083 | ||||||
Total
interest income
|
235,009 | 366,246 | ||||||
Interest
expense:
|
||||||||
Short-term
borrowings secured by mortgage securities
|
436 | 23,649 | ||||||
Asset-backed
bonds secured by mortgage loans
|
95,012 | 178,937 | ||||||
Asset-backed
bonds secured by mortgage securities
|
13,271 | 17,635 | ||||||
Junior
subordinated debentures
|
6,261 | 8,148 | ||||||
Total
interest expense
|
114,980 | 228,369 | ||||||
Net
interest income before provision for credit losses
|
120,029 | 137,877 | ||||||
Provision
for credit losses
|
(707,364 | ) | (265,288 | ) | ||||
Net
interest (expense) income
|
$ | (587,335 | ) | $ | (127,411 | ) |
Payments
Due by Period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than
1 Year |
1-3
Years
|
3-5
Years
|
After
5 Years
|
|||||||||||||||
Non-recourse
- long—term debt (A)
|
$ | 3,553,299 | $ | 696,611 | $ | 988,857 | $ | 531,767 | $ | 1,336,064 | ||||||||||
Junior
subordinated debentures (B)
|
185,817 | 8,862 | 7,695 | 7,695 | 161,565 | |||||||||||||||
Operating
leases (C)
|
13,694 | 6,184 | 6,887 | 436 | 187 | |||||||||||||||
Total,
consolidated obligations
|
3,752,810 | 711,657 | 1,003,439 | 539,898 | 1,497,816 | |||||||||||||||
Non-recourse
obligations
|
(3,553,299 | ) | (696,611 | ) | (988,857 | ) | (531,767 | ) | (1,336,064 | ) | ||||||||||
Recourse
obligations
|
$ | 199,511 | $ | 15,046 | $ | 14,582 | $ | 8,131 | $ | 161,752 |
(A)
|
The
asset-backed bonds will be repaid only to the extent there is sufficient
cash receipts on the underlying mortgage loans, which collateralize the
debt. The trusts that own these assets and asset-backed
obligations have no recourse to us for any shortfall. The
timing of the repayment of these mortgage loans is affected by
prepayments. These amounts include expected interest payments on the
obligations. Interest obligations on our variable-rate long-term debt are
based on the prevailing interest rate at December 31, 2008 for each
respective obligation.
|
(B)
|
The
junior subordinated debentures are assumed to mature in 2035 and 2036 in
computing the future payments. These amounts include expected interest
payments on the obligations. Interest obligations on our junior
subordinated debentures are based on the prevailing interest rate at
December 31, 2008 for each respective obligation. On February
18, 2009, the Company, NMI, NovaStar Capital Trust I and NovaStar Capital
Trust II (the “Trusts”) and the trust preferred security holders
entered into agreements to exchange the existing preferred obligations for
new preferred obligations. The new preferred obligations
require quarterly distributions of interest to the holders at a rate equal
to 1.0% per annum beginning January 1, 2009 through December 31, 2009,
subject to reset to a variable rate equal to the three-month LIBOR plus
3.5% upon the occurrence of an “Interest Coverage Trigger.”, see note 21
to the consolidated financial statements for additional
details.
|
(C)
|
The
operating lease obligations do not include rental income of $1.9 million
to be received under sublease
contracts.
|
For
the Year Ended
December 31, 2008 |
||||
Primary
sources:
|
||||
Payments
received on mortgage securities
|
$ | 59,912 | ||
Payments
received on mortgage loans – held-for-sale
|
4,024 | |||
Primary
uses:
|
||||
Repayment
of short-term borrowings
|
(45,488 | ) | ||
Payment
of general, administrative and capital expenditures
|
(37,832 | ) |
For
the Years Ended
December 31, |
||||||||
2008
|
2007
|
|||||||
Consolidated
Statements of Cash Flows:
|
||||||||
Cash
provided by (used in) operating activities
|
$ | 29,566 | $ | (445,788 | ) | |||
Cash
flows provided by investing activities
|
493,803 | 1,073,063 | ||||||
Cash
flows used in financing activities
|
(523,719 | ) | (752,433 | ) |
|
·
|
Higher
credit losses have decreased cash available to distribute with respect to
our securities,
|
|
·
|
As
short-term interest rates decline, the net spread to us increases and if
short-term interest rates increase, the spread we receive will
decline,
|
|
·
|
We
have lower average balances of our mortgage securities—available-for-sale
portfolio as the securities have paid down and we have not acquired new
bonds.
|
|
1.
|
We
sold a portion of the beneficial interests we
owned,
|
|
2.
|
The
credit losses on the securitized loans increased to the point where the
remaining beneficial interests we own are not
significant,
|
|
3.
|
We
sold the right to service all securitized
loans,
|
|
4.
|
We
executed amendments to the securitization agreements for the 2006 loan
pools whereby we relinquished all rights to place certain derivative
instruments into the securitization trust and to repurchase a limited
number of loans from the trust for any reason and at any time,
and
|
|
5.
|
For
the 2007 securitized loan pool, a significant portion of the derivatives
placed into the trust have expired and the remaining derivatives will
expire by the end of 2009.
|
December
31, 2008
|
December 31, 2007
|
|||||||||||||||||||||||||||||||||||||||
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
|||||||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||||||||||
Mortgage
loans – held in portfolio, net of allowance
|
$ | − | $ | 411,146 | $ | 523,183 | $ | 847,962 | $ | 1,782,291 | $ | $ | 670,092 | $ | 756,912 | $ | 1,457,054 | $ | 2,884,058 | |||||||||||||||||||||
Trading
securities
|
5,199 | − | − | − | 5,199 | 72,239 | − | − | − | 72,239 | ||||||||||||||||||||||||||||||
Real
estate owned
|
− | 23,289 | 9,233 | 37,958 | 70,480 | − | 32,126 | 4,851 | 39,637 | 76,614 | ||||||||||||||||||||||||||||||
Accrued
interest receivable
|
− | 22,566 | 10,134 | 44,592 | 77,292 | − | 14,239 | 14,090 | 33,375 | 61,704 | ||||||||||||||||||||||||||||||
Other
assets
|
2,043 | − | − | − | 2,043 | 4,473 | − | − | − | 4,473 | ||||||||||||||||||||||||||||||
Total
assets
|
$ | 7,242 | $ | 457,001 | $ | 542,550 | $ | 930,512 | $ | 1,937,305 | $ | 76,712 | $ | 716,457 | $ | 775,853 | $ | 1,530,066 | $ | 3,099,088 | ||||||||||||||||||||
Liabilities
and net deficiency in assets
|
||||||||||||||||||||||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||||||
Asset-backed
bonds secured by mortgage loans
|
$ | − | $ | 566,577 | $ | 700,335 | $ | 1,398,115 | $ | 2,665,027 | $ | − | $ | 735,235 | $ | 765,361 | $ | 1,644,534 | $ | 3,145,130 | ||||||||||||||||||||
Asset-backed
bonds secured by mortgage securities
|
5,384 | − | − | − | 5,384 | 74,542 | − | − | − | 74,542 | ||||||||||||||||||||||||||||||
Other
liabilities
|
24,748 | 47,418 | 22,401 | 104,439 | 199,006 | 21,945 | 33,533 | 22,356 | 73,231 | 151,065 | ||||||||||||||||||||||||||||||
Total
liabilities
|
30,132 | 613,995 | 722,736 | 1,502,554 | 2,869,417 | 96,487 | 768,768 | 787,717 | 1,717,765 | 3,370,737 | ||||||||||||||||||||||||||||||
Total
net deficiency in assets
|
(22,890 | ) | (156,994 | ) | (180,186 | ) | (572,042 | ) | (932,112 | ) | (19,775 | ) | (52,311 | ) | (11,864 | ) | (187,699 | ) | (271,649 | ) | ||||||||||||||||||||
Total
liabilities and net deficiency in assets
|
$ | 7,242 | $ | 457,001 | $ | 542,550 | $ | 930,512 | $ | 1,937,305 | $ | 76,712 | $ | 716,457 | $ | 775,853 | $ | 1,530,066 | $ | 3,099,088 |
(A)
|
Stand-alone
balances do not include impact of intercompany
eliminations.
|
(B)
|
The
above financial information is considered
non-GAAP.
|
For the Year Ended December 31, 2008
|
For the Year Ended December 31, 2007
|
|||||||||||||||||||||||||||||||||||||||
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
|||||||||||||||||||||||||||||||
Interest
Income
|
$ | 26,306 | $ | 45,160 | $ | 27,555 | $ | 109,295 | $ | 208,316 | $ | 34,133 | $ | 68,068 | $ | 67,936 | $ | 120,665 | $ | 290,802 | ||||||||||||||||||||
Interest
expense
|
13,124 | 22,453 | 25,843 | 54,874 | 116,294 | 19,129 | 49,298 | 52,807 | 86,521 | 207,755 | ||||||||||||||||||||||||||||||
Provision
for credit losses
|
− | (127,485 | ) | (165,063 | ) | (414,816 | ) | (707,364 | ) | − | (43,620 | ) | (23,942 | ) | (197,726 | ) | (265,288 | ) | ||||||||||||||||||||||
Servicing
fee expense
|
− | 3,129 | 2,736 | 7,732 | 13,597 | − | 3,938 | 3,210 | 5,867 | 13,015 | ||||||||||||||||||||||||||||||
Mortgage
insurance
|
− | 4,216 | 292 | 11,310 | 15,818 | − | 5,409 | 323 | 10,730 | 16,462 | ||||||||||||||||||||||||||||||
Other
income
|
(15,550 | ) | 6,393 | − | (4,844 | ) | (14,001 | ) | (25,513 | ) | (85 | ) | − | (7,509 | ) | (33,107 | ) | |||||||||||||||||||||||
General
and administrative expenses
|
747 | 46 | 42 | 62 | 897 | 5,798 | 7 | 5 | 11 | 5,821 | ||||||||||||||||||||||||||||||
Net
loss before tax expense
|
(3,115 | ) | (105,776 | ) | (166,421 | ) | (384,343 | ) | (659,655 | ) | (16,307 | ) | (34,289 | ) | (12,351 | ) | (187,699 | ) | (250,646 | ) | ||||||||||||||||||||
Tax
expense
|
− | − | 1,902 | − | 1,902 | 3,469 | − | − | − | 3,469 | ||||||||||||||||||||||||||||||
Net
loss
|
$ | (3,115 | ) | $ | (105,776 | ) | $ | (168,323 | ) | $ | (384,343 | ) | $ | (661,557 | ) | $ | (19,776 | ) | $ | (34,289 | ) | $ | (12,351 | ) | $ | (187,699 | ) | $ | (254,115 | ) |
(A)
|
Stand-alone
balances do not include impact of intercompany
eliminations.
|
(B)
|
The
above financial information is considered
non-GAAP.
|
For the Year Ended December 31, 2008
|
For the Year Ended December 31, 2007
|
||||||||||||||||||||||||||||||||||||||||
Net cash flow from:
|
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
CDO
|
NHES
2006-1
|
NHES
2006
MTA1
|
NHES
2007-1
|
Total
|
|||||||||||||||||||||||||||||||
Operating
activities
|
$ | (7,441 | ) | $ | 27,320 | $ | (4,415 | ) | $ | 43,622 | $ | 59,086 | $ | 25,244 | $ | 7,295 | $ | (39,748 | ) | $ | 65,191 | $ | 57,982 | ||||||||||||||||||
Investing
activities
|
16,135 | 135,777 | 70,706 | 195,954 | 418,572 | (365,097 | ) | 315,726 | 321,479 | 173,813 | 445,921 | ||||||||||||||||||||||||||||||
Financing
activities
|
(8,694 | ) | (163,097 | ) | (66,291 | ) | (239,576 | ) | (477,658 | ) | 339,853 | (323,021 | ) | (281,731 | ) | (239,004 | ) | (503,903 | ) | ||||||||||||||||||||||
Net
cash flow
|
- | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Cash,
beginning of year
|
- | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Cash,
end of year
|
$ | − | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
(A)
|
Stand-alone
balances do not include impact of intercompany
eliminations.
|
(B)
|
The
above financial information is considered
non-GAAP.
|
|
·
|
Have
the transferred assets been isolated from the
transferor?
|
|
·
|
Does
the transferee have the right to pledge or exchange the transferred
assets?
|
|
·
|
Is
there a “call” agreement that requires the transferee to return specific
assets?
|
|
·
|
Is
there an agreement that both obligates and entitles the transferee to
return the transferred assets prior to
maturity?
|
|
·
|
Have
any derivative instruments been
transferred?
|
|
·
|
The
interest spread between the coupon net of servicing fees on the underlying
loans, the cost of financing, mortgage insurance, payments or receipts on
or from derivative contracts and bond administrative
costs.
|
|
·
|
Prepayment
penalties received from borrowers who payoff their loans early in their
life.
|
|
·
|
Overcollateralization
which is designed to protect the primary bondholder from credit loss on
the underlying loans.
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
Assets
|
||||||||
Unrestricted
cash and cash equivalents
|
$ | 24,790 | $ | 25,364 | ||||
Restricted
cash
|
6,046 | 8,998 | ||||||
Mortgage
loans – held-in-portfolio, net of allowance of $776,001 and $230,138,
respectively
|
1,772,838 | 2,870,013 | ||||||
Mortgage
securities -
trading
|
7,085 | 109,203 | ||||||
Mortgage
securities -
available-for-sale
|
12,788 | 33,371 | ||||||
Real
estate owned
|
70,480 | 76,614 | ||||||
Accrued
interest receivable
|
77,292 | 61,704 | ||||||
Other
assets
|
5,704 | 37,244 | ||||||
Assets
of discontinued operations
|
1,441 | 8,255 | ||||||
Total
assets
|
$ | 1,978,464 | $ | 3,230,766 | ||||
Liabilities
and Shareholders’ Deficit
|
||||||||
Liabilities:
|
||||||||
Asset-backed
bonds secured by mortgage loans
|
$ | 2,599,351 | $ | 3,065,746 | ||||
Asset-backed
bonds secured by mortgage securities
|
5,376 | 74,385 | ||||||
Short-term
borrowings secured by mortgage securities
|
- | 45,488 | ||||||
Junior
subordinated debentures
|
77,323 | 83,561 | ||||||
Due
to servicer
|
117,635 | 56,450 | ||||||
Dividends
payable
|
19,088 | 3,816 | ||||||
Accounts
payable and other liabilities
|
33,928 | 53,392 | ||||||
Liabilities
of discontinued operations
|
2,536 | 59,416 | ||||||
Total
liabilities
|
2,855,237 | 3,442,254 | ||||||
Commitments
and contingencies (Note 7)
|
||||||||
Shareholders’
deficit:
|
||||||||
Capital
stock, $0.01 par value, 50,000,000 shares authorized:
|
||||||||
Redeemable
preferred stock, $25 liquidating preference per share; 2,990,000 shares,
issued and outstanding
|
30 | 30 | ||||||
Convertible
participating preferred stock, $25 liquidating preference per share;
2,100,000 shares, issued and outstanding
|
21 | 21 | ||||||
Common
stock, 9,368,053 and 9,439,273 shares, issued and outstanding,
respectively
|
94 | 94 | ||||||
Additional
paid-in capital
|
786,279 | 786,342 | ||||||
Accumulated
deficit
|
(1,671,984 | ) | (996,649 | ) | ||||
Accumulated
other comprehensive income (loss)
|
8,926 | (1,117 | ) | |||||
Other
|
(139 | ) | (209 | ) | ||||
Total
shareholders’ deficit
|
(876,773 | ) | (211,488 | ) | ||||
Total
liabilities and shareholders’ deficit
|
$ | 1,978,464 | $ | 3,230,766 |
For
the Year Ended
December
31,
|
||||||||
2008
|
2007
|
|||||||
Interest
income
|
$ | 235,009 | $ | 366,246 | ||||
Interest
expense
|
114,980 | 228,369 | ||||||
Net
interest income before provision for credit losses
|
120,029 | 137,877 | ||||||
Provision
for credit losses
|
(707,364 | ) | (265,288 | ) | ||||
Net
interest expense after provision for credit losses
|
(587,335 | ) | (127,411 | ) | ||||
Other
operating expense:
|
||||||||
Gains
on debt extinguishment
|
6,418 | - | ||||||
Losses
on derivative instruments
|
(18,094 | ) | (10,997 | ) | ||||
Fair
value adjustments
|
(25,743 | ) | (85,803 | ) | ||||
Impairments
on mortgage securities – available-for-sale
|
(23,100 | ) | (98,692 | ) | ||||
Servicing
fee expense
|
(13,596 | ) | (2,592 | ) | ||||
Appraisal
fee income
|
2,524 | - | ||||||
Appraisal
fee expense
|
(1,693 | ) | - | |||||
Premiums
for mortgage loan insurance
|
(15,847 | ) | (16,462 | ) | ||||
Other
(expense) income, net
|
(19 | ) | 392 | |||||
Total
other operating expense
|
(89,150 | ) | (214,154 | ) | ||||
General
and administrative expenses:
|
||||||||
Office
administration
|
9,407 | 12,565 | ||||||
Professional
and outside services
|
7,019 | 21,811 | ||||||
Compensation
and benefits
|
5,944 | 27,688 | ||||||
Other
appraisal management expenses
|
1,170 | - | ||||||
Other
expense (income)
|
881 | (2,644 | ) | |||||
Total
general and administrative expenses
|
24,421 | 59,420 | ||||||
Loss
from continuing operations before income tax (benefit)
|
(700,906 | ) | (400,985 | ) | ||||
Income
tax (benefit) expense
|
(17,594 | ) | 66,512 | |||||
Loss
from continuing operations
|
(683,312 | ) | (467,497 | ) | ||||
Income
(loss)from discontinued operations, net of income tax
|
22,830 | (256,780 | ) | |||||
Net
loss
|
$ | (660,482 | ) | $ | (724,277 | ) | ||
Basic
earnings per share:
|
||||||||
Loss
from continuing operations available to common
shareholders
|
$ | (74.81 | ) | $ | (51.04 | ) | ||
Income
(loss) from discontinued operations, net of income tax
|
2.44 | (27.51 | ) | |||||
Net
loss available to common shareholders
|
$ | (72.37 | ) | $ | (78.55 | ) | ||
Diluted
earnings per share:
|
||||||||
Loss
from continuing operations available to common
shareholders
|
$ | (74.81 | ) | $ | (51.04 | ) | ||
Income
(loss) from discontinued operations, net of income tax
|
2.44 | (27.51 | ) | |||||
Net
loss available to common shareholders
|
$ | (72.37 | ) | $ | (78.55 | ) | ||
Weighted
average basic shares outstanding
|
9,338,131 | 9,332,405 | ||||||
Weighted
average diluted shares outstanding
|
9,338,131 | 9,332,405 |
Redeemable
Preferred
Stock
|
Convertible
Participating
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
(Loss) Income
|
Other
|
Total
Share-
holders’
Equity
(Deficit)
|
|||||||||||||||||||||||||
Balance,
January 1, 2007
|
$ | 30 | $ | - | $ | 93 | $ | 742,028 | $ | (263,572 | ) | $ | 36,548 | $ | (557 | ) | $ | 514,570 | ||||||||||||||
Cumulative
effect adjustment from
adoption of SFAS 157
|
- | - | - | - | 5,430 | - | - | 5,430 | ||||||||||||||||||||||||
Cumulative
effect adjustment from
adoption of SFAS 159
|
- | - | - | - | (1,131 | ) | 1,131 | - | - | |||||||||||||||||||||||
Cumulative
effect adjustment from
adoption of FIN 48
|
- | - | - | - | (1,072 | ) | - | - | (1,072 | ) | ||||||||||||||||||||||
Forgiveness
of founders’ notes receivable
|
- | - | - | - | - | - | 348 | 348 | ||||||||||||||||||||||||
Issuance
of preferred stock, 2,100,000
shares
|
- | 21 | - | 43,591 | - | - | - | 43,612 | ||||||||||||||||||||||||
Preferred
stock beneficial conversion
feature
|
- | - | - | 3,825 | (3,825 | ) | - | - | - | |||||||||||||||||||||||
Issuance
of common stock, 35,094
shares
|
- | - | - | 3,190 | - | - | - | 3,190 | ||||||||||||||||||||||||
Issuance
of stock under stock compensation
plans, 88,867 shares
|
- | - | 1 | 209 | - | - | - | 210 | ||||||||||||||||||||||||
Compensation
recognized under
stock compensation plans
|
- | - | - | 707 | - | - | - | 707 | ||||||||||||||||||||||||
Dividends
on preferred stock ($1.67
per share declared)
|
- | - | - | (8,805 | ) | - | - | (8,805 | ) | |||||||||||||||||||||||
Reversal
of tax benefit derived from
capitalization of affiliates
|
- | - | - | (7,195 | ) | - | - | (7,195 | ) | |||||||||||||||||||||||
Other
|
- | - | (13 | ) | 603 | - | - | 590 | ||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | (724,277 | ) | - | - | (724,277 | ) | ||||||||||||||||||||||
Other
comprehensive loss
|
- | - | - | - | - | (38,796 | ) | - | (38,796 | ) | ||||||||||||||||||||||
Total
comprehensive loss
|
- | - | - | - | - | - | - | (763,073 | ) | |||||||||||||||||||||||
Balance,
December 31, 2007
|
$ | 30 | $ | 21 | $ | 94 | $ | 786,342 | $ | (996,649 | ) | $ | (1,117 | ) | $ | (209 | ) | $ | (211,488 | ) |
Redeemable
Preferred
Stock
|
Convertible
Participating
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
(Loss)
Income
|
Other
|
Total
Share-
holders’
Deficit
|
|||||||||||||||||||||||||
Balance,
January 1, 2008
|
$ | 30 | $ | 21 | $ | 94 | $ | 786,342 | $ | (996,649 | ) | $ | (1,117 | ) | $ | (209 | ) | $ | (211,488 | ) | ||||||||||||
Forgiveness
of founders’ notes receivable
|
- | - | - | - | - | - | 70 | 70 | ||||||||||||||||||||||||
Compensation
recognized under stock
compensation plans
|
- | - | - | (63 | ) | - | - | - | (63 | ) | ||||||||||||||||||||||
Accumulating
dividends on preferred
stock
|
- | - | - | - | (15,273 | ) | - | - | (15,273 | ) | ||||||||||||||||||||||
Other
|
- | - | - | - | 420 | - | - | 420 | ||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | (660,482 | ) | - | - | (660,482 | ) | ||||||||||||||||||||||
Other
comprehensive loss
|
- | - | - | - | - | 10,043 | - | 10,043 | ||||||||||||||||||||||||
Total
comprehensive loss
|
- | - | - | - | - | - | - | (650,439 | ) | |||||||||||||||||||||||
Balance,
December 31, 2008
|
$ | 30 | $ | 21 | $ | 94 | $ | 786,279 | $ | (1,671,984 | ) | $ | 8,926 | $ | (139 | ) | $ | (876,773 | ) |
See
notes to consolidated financial statements.
|
Concluded
|
For
the Year Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (660,482 | ) | $ | (724,277 | ) | ||
Income
(loss) from discontinued operations
|
22,830 | (256,780 | ) | |||||
Loss
from continuing operations
|
(683,312 | ) | (467,497 | ) | ||||
Adjustments
to reconcile loss from continuing operations to net cash used in operating
activities:
|
||||||||
Impairment
on mortgage securities - available-for-sale
|
23,100 | 98,692 | ||||||
Losses
on derivative instruments
|
18,094 | 10,997 | ||||||
Depreciation
expense
|
1,124 | 2,865 | ||||||
Amortization
of deferred debt issuance costs
|
3,081 | 1,696 | ||||||
Compensation
recognized under stock compensation plans
|
(63 | ) | 707 | |||||
Provision
for credit losses
|
707,364 | 265,288 | ||||||
Amortization
of premiums on mortgage loans
|
13,366 | 4,805 | ||||||
Interest
capitalized on loans held-in-portfolio
|
(19,858 | ) | (41,973 | ) | ||||
Forgiveness
of founders’ promissory notes
|
70 | 348 | ||||||
Provision
for deferred income taxes
|
(13,805 | ) | 41,620 | |||||
Fair
value adjustments
|
25,743 | 85,803 | ||||||
Accretion
of available-for-sale and trading securities
|
(50,399 | ) | (99,773 | ) | ||||
Gains
on debt extinguishment
|
(6,418 | ) | - | |||||
Changes
in:
|
||||||||
Accrued
interest receivable
|
(15,588 | ) | (31,855 | ) | ||||
Derivative
instruments, net
|
673 | 3,496 | ||||||
Other
assets
|
5,654 | 37,283 | ||||||
Due
to servicer
|
61,185 | 56,450 | ||||||
Accounts
payable and other liabilities
|
(26,030 | ) | 34,515 | |||||
Net
cash provided by operating activities from continuing
operations
|
43,981 | 3,467 | ||||||
Net
cash used in operating activities from discontinued
operations
|
(14,415 | ) | (449,255 | ) | ||||
Net
cash provided by (used in) operating activities
|
29,566 | (445,788 | ) | |||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from paydowns on mortgage securities - available-for-sale
|
26,899 | 188,443 | ||||||
Proceeds
from paydowns of mortgage securities - trading
|
59,912 | 46,731 | ||||||
Purchase
of mortgage securities - trading
|
- | (21,957 | ) | |||||
Proceeds
from sale of mortgage securities - trading
|
- | 7,420 | ||||||
Proceeds
from repayments of mortgage loans held-in-portfolio
|
288,243 | 824,060 | ||||||
Proceeds
from sales of assets acquired through foreclosure
|
114,194 | 6,288 | ||||||
Restricted
cash proceeds (payments)
|
2,952 | (8,998 | ) | |||||
Purchases
of property and equipment
|
(25 | ) | (3,132 | ) | ||||
Acquisition
of businesses, net of cash acquired
|
(710 | ) | - | |||||
Net
cash provided by investing activities
|
491,465 | 1,038,855 | ||||||
Net
cash provided by investing activities from discontinued
operations
|
2,114 | 34,208 | ||||||
Net
cash provided by investing activities
|
493,579 | 1,073,063 |
For
the Year Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from issuance of asset-backed bonds
|
- | 2,111,415 | ||||||
Payments
on asset-backed bonds
|
(477,662 | ) | (797,101 | ) | ||||
Proceeds
from issuance of capital stock and exercise of equity instruments, net of
offering costs
|
- | 47,012 | ||||||
Net
change in short-term borrowings
|
(45,488 | ) | (458,192 | ) | ||||
Repurchase
of trust preferred debt
|
(550 | ) | - | |||||
Dividends
paid on vested options
|
- | (405 | ) | |||||
Dividends
paid on preferred stock
|
- | (6,653 | ) | |||||
Net
cash (used in) provided by financing activities from continuing
operations
|
(523,700 | ) | 896,076 | |||||
Net
cash used in financing activities from discontinued
operations
|
(19 | ) | (1,648,509 | ) | ||||
Net
cash (used in) provided by financing activities
|
(523,719 | ) ) | (752,433 | ) | ||||
Net
decrease in cash and cash equivalents
|
(574 | ) | (125,158 | ) | ||||
Cash
and cash equivalents, beginning of period
|
25,364 | 150,522 | ||||||
Cash
and cash equivalents, end of period
|
$ | 24,790 | $ | 25,364 |
For
the Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Cash
paid for interest
|
$ | 111,949 | $ | 310,293 | ||||
Cash
paid for income taxes
|
3,679 | 6,012 | ||||||
Cash
received on mortgage securities – available-for-sale with no cost
basis
|
3,401 | 3,475 | ||||||
Non-cash
investing and financing activities:
|
||||||||
Transfer
of loans to held-in-portfolio from held-for-sale
|
- | 1,880,340 | ||||||
Transfer
of mortgage securities available-for-sale to trading (A)
|
- | 46,683 | ||||||
Assets
acquired through foreclosure
|
108,172 | 120,148 | ||||||
Cost
basis of securities retained in securitizations
|
- | 56,387 | ||||||
Tax
benefit derived from capitalization of affiliate
|
- | 7,195 | ||||||
Preferred
stock dividends accrued, not yet paid
|
15,273 | 3,816 |
(A) Transfer
was made upon adoption of SFAS
159.
|
See
notes to consolidated financial statements.
|
Concluded
|
·
|
The
Company received $42.8 million in cash from its unsecuritized mortgage
securities portfolio.
|
·
|
The
Company used $45.5 million in cash to fully repay all secured borrowings
and terminate all secured lending agreements. As a result, the Company has
no short-term borrowing capacity or agreements currently
available.
|
·
|
The
Company paid general and administrative expenses, including those related
to its discontinued lending and servicing operations, totaling $37.1
million.
|
·
|
The
Company invested $0.7 million in
StreetLinks.
|
|
·
|
Whole Loan Sales Whole
loan sales represent loans sold to third parties with servicing released.
Gains and losses on whole loan sales are recognized in the period the sale
occurs and the Company has determined that the criteria for sales
treatment has been achieved as it has surrendered control over the assets
transferred. The Company generally has an obligation to repurchase whole
loans sold in circumstances in which the borrower fails to make up to the
first three payments due to the
buyer.
|
|
·
|
Loans and Securities Sold
Under Agreements to Repurchase (Repurchase Agreements)
Repurchase agreements represent legal sales of loans or mortgage
securities and a related agreement to repurchase the loans or mortgage
securities at a later date. Repurchase agreements are accounted for as
secured borrowings because the Company has not surrendered control of the
transferred assets as it is both entitled and obligated to repurchase the
transferred assets prior to their maturity. Repurchase agreements are
classified as short-term borrowings in the Company’s consolidated balance
sheet.
|
|
·
|
Securitization
Transactions A
securitization transaction is the transfer or sale of mortgage loans to
independent trusts which issue securities to investors. As discussed
above, the accounting treatment for transfers of assets upon
securitization depends on whether or not the Company has retained control
over the transferred assets. The securities are collateralized by the
mortgage loans transferred into the independent trusts. The Company
retains interests in some of the securities issued by the trust. Certain
of the securitization agreements require the Company to repurchase loans
that are found to have legal deficiencies subsequent to the date of
transfer. The fair values of these recourse obligations are recorded upon
the transfers of the mortgage loans and on an ongoing basis. The Company
also retained the right, but not the obligation, to acquire loans when
they are 90 to 119 days delinquent and at the time a property is
liquidated, but transferred this right to the purchaser of the Company’s
mortgage servicing rights in 2007. Prior to that transfer, the Company
recorded an asset and a liability on the balance sheet for the aggregate
fair value of delinquent loans that it had a right to call as of the
balance sheet date when the securitization is accounted for as a
sale.
|
|
·
|
Resecuritization
Transactions A resecuritization is the transfer or sale of mortgage
securities that the Company has retained in previous securitization
transactions to an independent trust. Similar to a securitization, the
trust issues securities that are collateralized by the mortgage securities
transferred to the trust. Resecuritization transactions are accounted for
as either a sale or a secured borrowing based on whether or not the
Company has retained or surrendered control over the transferred assets.
In the resecuritization transaction, the Company may retain an interest in
a security that represents the right to receive the cash flows on the
underlying mortgage security collateral after the senior bonds, issued to
third parties, have been repaid in
full.
|
|
·
|
Appraisal
Fees Appraisal fees are collected as part of the
appraisal management process performed by StreetLinks based on negotiated
rates with each appraiser. Revenue is recognized when the
appraisal is completed and provided to the lender or borrower, depending
on who placed the order.
|
|
·
|
Broker Fees Broker
fees are paid by other lenders for placing loans with third-party
investors (lenders) and are based on negotiated rates with each lender to
whom the Company brokers loans. Revenue is recognized upon loan
origination and delivery.
|
|
·
|
Loan Origination
Fees Loan origination fees represent fees paid to the
Company by borrowers and are associated with the origination of mortgage
loans. Loan origination fees are determined based on the type and amount
of loans originated. Loan origination fees and direct origination costs on
mortgage loans held-in-portfolio are deferred and recognized over the life
of the loan using the level yield method. Loan origination fees and direct
origination costs on mortgage loans held-for-sale are deferred and
considered as part of the carrying value of the loan when
sold.
|
|
·
|
Service Fee
Income Service fees are paid to the Company by either
the investor on mortgage loans serviced or the borrower. Fees paid by
investors on loans serviced are determined as a percentage of the
principal collected for the loans serviced and are recognized in the
period in which payments on the loans are received. Fees paid by borrowers
on loans serviced are considered ancillary fees related to loan servicing
and include late fees and processing fees. Revenue is recognized on fees
received from borrowers when an event occurs that generates the fee and
they are considered to be
collectible.
|
December 31,
2008
|
December 31,
2007
|
|||||||
Mortgage
loans – held-in-portfolio:
|
||||||||
Outstanding
principal
|
$ | 2,529,791 | $ | 3,067,737 | ||||
Net
unamortized deferred origination costs
|
19,048 | 32,414 | ||||||
Amortized
cost
|
2,548,839 | 3,100,151 | ||||||
Allowance
for credit losses
|
(776,001 | ) | (230,138 | ) | ||||
Mortgage
loans – held-in-portfolio
|
$ | 1,772,838 | $ | 2,870,013 | ||||
Weighted
average coupon
|
8.00 | % | 8.59 | % |
For the Year Ended December 31,
|
||||||||||||||||||||||||
Total Principal Amount of
Loans (A)
|
Principal Amount of
Loans 60 Days or More
Past Due
|
Net Credit Losses
During the Year Ended
December 31, (B)
|
||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Loans
securitized
|
$ | 8,121,668 | $ | 10,087,692 | $ | 3,371,720 | $ | 1,806,141 | $ | 469,182 | $ | 231,814 | ||||||||||||
Loans
held-in-portfolio
|
2,684,213 | 3,215,695 | 1,270,261 | 572,943 | 155,765 | 15,458 | ||||||||||||||||||
Total
loans securitized or held-in-portfolio
|
$ | 10,805,881 | $ | 13,303,387 | $ | 4,641,981 | $ | 2,379,084 | $ | 624,947 | $ | 247,272 |
(A)
|
Includes
assets acquired through
foreclosure.
|
(B)
|
Represents
the realized losses as reported by the securitization trusts for each
period presented.
|
Securitization
Name
|
Date Issued
|
Principal
Balance of Loans
Pledged
|
Bonds Issued
(A)
|
Net Bond
Proceeds
|
Interest Rate Spread
Over One Month
LIBOR (A)(B)
|
||||||||||||
2007:
|
|||||||||||||||||
NHES
2007-1
|
February
28, 2007
|
$ | 1,888,756 | $ | 1,794,386 | $ | 1,784,662 |
0.10%-1.75%
|
(A)
|
The
amounts shown do not include subordinated bonds retained by the
Company.
|
(B)
|
The
interest rate for the A-2A2 bond is fixed at
5.86%
|
2008
|
2007
|
|||||||
Balance,
beginning of period
|
$ | 230,138 | $ | 22,452 | ||||
Provision
for credit losses
|
707,364 | 265,288 | ||||||
Charge-offs,
net of recoveries
|
(161,501 | ) | (57,602 | ) | ||||
Balance,
end of period
|
$ | 776,001 | $ | 230,138 |
Assets after intercompany
eliminations
|
Liabilities after
intercompany
|
Recourse to
|
||||||||||||||||||
Consolidated
VIEs
|
Total Assets
|
Unrestricted
|
Restricted (A)
|
eliminations
|
the Company(B)
|
|||||||||||||||
December
31, 2008
|
|
|
|
|||||||||||||||||
Mortgage
Loan VIEs(C)
|
$ | 1,930,063 | - | $ | 1,920,610 | $ | 2,730,280 | - | ||||||||||||
CDOs(D)
|
7,242 | - | 6,842 | 8,557 | - |
(A)
|
Assets
are considered restricted when they cannot be freely pledged or sold by
the Company.
|
(B)
|
This
column reflects the extent, if any, to which investors have recourse to
the Company beyond the assets held by the VIE and assumes a total loss of
the assets held by the VIE.
|
(C)
|
For
Mortgage Loan VIEs, assets are primarily recorded in Mortgage loans –
held-in-portfolio. Liabilities are primarily recorded in Asset-backed
bonds secured by mortgage loans.
|
(D)
|
For
the CDO, assets are primarily recorded in Mortgage securities –
trading and liabilities are recorded in Asset-backed bonds secured by
mortgage securities.
|
Size/Principal
Outstanding (A)
|
Assets
on
Balance
Sheet(B)
|
Liabilities
on
Balance
Sheet(B)
|
Maximum
Exposure
to Loss(C)
|
2008
Loss on
Sale
|
2008
Cash
Flows
|
|||||||||||||||||||
Residential
mortgage loans(D)
|
$ | 8,121,668 | $ | 15,919 | $ | - | $ | 15,919 | $ | - | $ | 58,891 |
(A)
|
Size/Principal
Outstanding reflects the estimated principal of the underlying assets held
by the VIE/SPEs.
|
(B)
|
Assets
and Liabilities on the Company’s Balance Sheet reflect the effect of
FIN 39 balance sheet netting, if
applicable.
|
(C)
|
The
maximum exposure to loss includes the following: the assets held by the
Company – including the value of derivatives that are in an asset
position and retained interests in the VIEs/SPEs; and the notional amount
of liquidity and other support generally provided through total return
swaps. The maximum exposure to loss for liquidity and other support
assumes a total loss on the referenced assets held by the
VIE.
|
(D)
|
For
Residential mortgage loans QSPEs, assets on balance sheet are primarily
securities issued by the entity and are recorded in Mortgage
securities-available-for-sale and Mortgage
securities-trading.
|
Carrying
amount/fair value of residual interests
|
$ | 13,493 | ||
Weighted
average life (in years)
|
2.7 | |||
Weighted
average prepayment speed assumption (CPR) (percent)
|
18 | |||
Fair
value after a 10% increase in prepayment speed
|
$ | 12,721 | ||
Fair
value after a 25% increase in prepayment speed
|
$ | 11,867 | ||
Weighted
average expected annual credit losses (percent of current collateral
balance)
|
24.1 | |||
Fair
value after a 10% increase in annual credit losses
|
$ | 11,842 | ||
Fair
value after a 25% increase in annual credit losses
|
$ | 10,335 | ||
Weighted
average residual cash flows discount rate (percent)
|
24.1 | |||
Fair
value after a 500 basis point increase in discount rate
|
$ | 12,859 | ||
Fair
value after a 1000 basis point increase in discount rate
|
$ | 12,286 | ||
Market
interest rates:
|
||||
Fair
value after a 100 basis point increase in market rates
|
$ | 7,921 | ||
Fair
value after a 200 basis point increase in market rates
|
$ | 5,098 |
Cost Basis
|
Unrealized
Gain
|
Unrealized Losses
Less Than Twelve
Months
|
Estimated Fair
Value
|
Average
Yield (A)
|
||||||||||||||||
As
of December 31, 2008
|
$ | 3,771 | $ | 9,017 | - | $ | 12,788 | 38.2 | % | |||||||||||
As
of December 31, 2007
|
33,302 | 69 | - | 33,371 | 26.9 |
(A)
|
The
average yield is calculated from the cost basis of the mortgage securities
and does not give effect to changes in fair value that are reflected as a
component of shareholders’ equity.
|
Original Face
|
Amortized Cost
Basis
|
Fair Value
|
Average
Yield (A)
|
|||||||||||||
As
of December 31, 2008
|
||||||||||||||||
Subordinated
securities pledged to CDO
|
$ | 332,489 | $ | 321,293 | $ | 4,798 | ||||||||||
Other
subordinated securities
|
102,625 | 96,723 | 1,582 | |||||||||||||
Residual
securities
|
- | 15,952 | 705 | |||||||||||||
Total
|
$ | 435,114 | $ | 433,968 | $ | 7,085 | 9.55 | % | ||||||||
As
of December 31, 2007
|
||||||||||||||||
Subordinated
securities pledged to CDO
|
$ | 332,489 | $ | 314,046 | $ | 60,870 | ||||||||||
Other
subordinated securities
|
102,625 | 92,049 | 23,592 | |||||||||||||
Residual
securities
|
- | 41,275 | 24,741 | |||||||||||||
Total
|
$ | 435,114 | $ | 447,370 | $ | 109,203 | 13.85 | % |
Date Issued
|
Bonds Issued
(A)(B)
|
Interest Rate Spread
Over LIBOR (A)
|
Par Amount of
Collateral
Pledged
|
||||||||
2007:
|
|||||||||||
NovaStar
ABS CDO I
|
February 8, 2007
|
$
|
331,500
|
0.32%-2.25%
|
$
|
374,862
|
|||||
NHES Series 2007-1
|
February 28,
2007
|
1,794,386
|
0.10%-1.75%
|
1,888,756
|
(A)
|
The
amounts shown do not include subordinated bonds retained by the
Company.
|
(B)
|
The
bonds issued for the NHES 2006-MTA1 securitization include $19.2 million
in Class X Notes. The Class X Notes are AAA-rated and are entitled to
interest-only cash flows.
|
Asset-backed Bonds
|
Mortgage Loans
|
|||||||||||||||||||
Remaining
Principal
|
Weighted
Average
Interest
Rate
|
Estimated
Weighted
Average
Months
to Call or
Maturity
|
Remaining
Principal
|
Weighted
Average
Coupon
|
||||||||||||||||
As
of December 31, 2008:
|
||||||||||||||||||||
ABB
Secured by Mortgage Loans:
|
||||||||||||||||||||
NHES
Series 2006-1
|
$ | 553,668 | 0.33 | % | 84 | $ | 528,766 | 8.95 | % | |||||||||||
NHES
Series 2006-MTA1
|
683,757 | 0.75 | 40 | 680,127 | 5.80 | |||||||||||||||
NHES
Series 2007-1
|
1,372,015 | 0.78 | 116 | 1,320,898 | 8.76 | |||||||||||||||
Unamortized
debt issuance costs, net
|
(10,090 | ) | ||||||||||||||||||
$ | 2,599,351 | |||||||||||||||||||
ABB
Secured by Mortgage Securities:
|
||||||||||||||||||||
NovaStar
ABS CDO I
|
$ | 325,930 | (A) | 3.08 | % | 26 | (B) | (B) | ||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||
ABB
Secured by Mortgage Loans:
|
||||||||||||||||||||
NHES
Series 2006-1
|
$ | 716,768 | 5.17 | % | 24 | $ | 694,101 | 8.49 | % | |||||||||||
NHES
Series 2006-MTA1
|
750,048 | 5.14 | 19 | 753,787 | 8.23 | |||||||||||||||
NHES
Series 2007-1
|
1,611,592 | 5.17 | 30 | 1,619,849 | 8.79 | |||||||||||||||
Unamortized
debt issuance costs, net
|
(12,662 | ) | ||||||||||||||||||
$ | 3,065,746 | (A) | ||||||||||||||||||
ABB
Secured by Mortgage Securities:
|
||||||||||||||||||||
NovaStar
ABS CDO I
|
$ | 331,500 | 5.56 | % | 32 | (B) | (B) |
(A)
|
The
NovaStar ABS CDO I ABB are carried at a fair value of $5.4 million and
$74.4 million on the Company’s consolidated balance sheet at December 31,
2008 and 2007, respectively.
|
(B)
|
Collateral
for the NovaStar ABS CDO I are subordinated mortgage
securities.
|
Asset-backed
Bonds
|
||||
2009
|
$
|
660,463
|
||
2010
|
556,296
|
|||
2011
|
371,597
|
|||
2012
|
332,824
|
|||
2013
|
147,498
|
|||
Thereafter
|
867,432
|
|||
$
|
2,936,110
|
Lease
Obligations
|
||||
2009
|
$ | 4,718 | ||
2010
|
4,656 | |||
2011
|
677 | |||
2012
|
225 | |||
2013
|
187 | |||
$ | 10,463 |
For the Year Ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Net
loss
|
$ | (660,482 | ) | $ | (724,277 | ) | ||
Other
comprehensive income (loss):
|
||||||||
Change
in unrealized loss on mortgage securities –
available-for-sale
|
(14,152 | ) | (138,306 | ) | ||||
Change
in unrealized gain on derivative instruments used in cash flow
hedges
|
(1,364 | ) | (736 | ) | ||||
Impairment
on mortgage securities - available-for-sale reclassified to
earnings
|
23,100 | 98,692 | ||||||
Valuation
allowance for deferred taxes
|
- | 1,855 | ||||||
Net
settlements of derivative instruments used in cash flow hedges
reclassified to earnings
|
2,459 | (301 | ) | |||||
Other
comprehensive income (loss)
|
10,043 | (38,796 | ) | |||||
Total
comprehensive loss
|
$ | (650,439 | ) | $ | (763,073 | ) |
|
·
|
Level
1—Quoted prices for identical instruments in active
markets
|
|
·
|
Level
2—Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
|
|
·
|
Level
3—Instruments whose significant value drivers are
unobservable.
|
Description
|
December 31,
2006 (Carrying
value prior to
adoption)
|
Cumulative-effect
Adjustment to
January 1, 2007
Accumulated Deficit
|
January 1, 2007
(Carrying value
after adoption)
|
|||||||||
Mortgage
securities – trading
|
$ | 329,361 | $ | 5,430 | $ | 334,791 |
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Description
|
Fair Value at
December 31,
2008
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Mortgage
securities -trading
|
$ | 7,085 | $ | - | $ | - | $ | 7,085 | ||||||||
Mortgage
securities – available-for-sale
|
12,788 | - | - | 12,788 | ||||||||||||
Total
Assets
|
$ | 20,066 | $ | - | $ | - | $ | 20,066 | ||||||||
Liabilities
|
||||||||||||||||
Asset-backed
bonds secured by mortgage securities
|
$ | 5,376 | $ | - | $ | - | $ | 5,376 | ||||||||
Derivative
instruments, net
|
9,102 | 9,102 | ||||||||||||||
Total
Liabilities
|
$ | 14,478 | $ | - | $ | 9,102 | $ | 5,376 |
Description
|
Fair Value at
December 31,
2007
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||||||
Assets
|
||||||||||||||||
Mortgage
securities -trading
|
$ | 109,203 | $ | - | $ | 84,462 | $ | 24,741 | ||||||||
Mortgage
securities – available-for-sale
|
33,371 | - | - | 33,371 | ||||||||||||
Derivative
instruments, net
|
(6,896 | ) | - | (6,896 | ) | - | ||||||||||
Total
Assets
|
$ | 135,678 | $ | - | $ | 77,566 | $ | 58,112 | ||||||||
Liabilities
|
||||||||||||||||
Asset-backed
bonds secured by mortgage securities
|
$ | 74,385 | $ | - | $ | 74,385 | $ | - |
Cost Basis
|
Unrealized
Loss
|
Estimated Fair
Value of
Mortgage
Securities
|
||||||||||
As
of December 31, 2007
|
$ | 41,275 | $ | (16,534 | ) | $ | 24,741 | |||||
Increases
(decreases) to mortgage securities-trading:
|
||||||||||||
Securities
transferred from level 2 to level 3
|
414,080 | (395,359 | ) | 18,721 | ||||||||
Accretion
of income
|
23,652 | - | 23,652 | |||||||||
Proceeds
from paydowns of securities
|
(45,039 | ) | - | (45,039 | ) | |||||||
Mark-to-market
value adjustment
|
- | (14,990 | ) | (14,990 | ) | |||||||
Net
increase (decrease) to mortgage securities
|
392,693 | (410,349 | ) | (17,656 | ) | |||||||
As
of December 31, 2008
|
$ | 433,968 | $ | (426,883 | ) | $ | 7,085 |
Cost Basis
|
Unrealized
Loss
|
Estimated Fair
Value of
Mortgage
Securities
|
||||||||||
As
of December 31, 2006
|
$ | - | $ | - | $ | - | ||||||
Increases
(decreases) to mortgage securities-trading:
|
||||||||||||
New
securities retained in securitizations
|
56,387 | 226 | 56,613 | |||||||||
Accretion
of income
|
3,102 | - | 3,102 | |||||||||
Proceeds
from paydowns of securities
|
(18,214 | ) | - | (18,214 | ) | |||||||
Mark-to-market
value adjustment
|
- | (16,760 | ) | (16,760 | ) | |||||||
Net
increase (decrease) to mortgage securities
|
41,275 | (16,534 | ) | 24,741 | ||||||||
As
of December 31, 2007
|
$ | 41,275 | $ | (16,534 | ) | $ | 24,741 |
Cost Basis
|
Unrealized
Gain
|
Estimated Fair
Value of
Mortgage
Securities
|
||||||||||
As
of December 31, 2007
|
$ | 33,302 | $ | 69 | $ | 33,371 | ||||||
Increases
(decreases) to mortgage securities:
|
||||||||||||
Accretion
of income (A)
|
7,988 | - | 7,988 | |||||||||
Proceeds
from paydowns of securities (A) (B)
|
(14,419 | ) | - | (14,419 | ) | |||||||
Impairment
on mortgage securities - available-for-sale
|
(23,100 | ) | - | (23,100 | ) | |||||||
Mark-to-market
value adjustment
|
- | 8,948 | 8,948 | |||||||||
Net
decrease to mortgage securities
|
(29,531 | ) | 8,948 | (20,583 | ) | |||||||
As
of December 31, 2008
|
$ | 3,771 | $ | 9,017 | $ | 12,788 |
(A)
|
Cash
received on mortgage securities with no cost basis was $3.4 million for
the year ended December 31, 2008.
|
(B)
|
For
mortgage securities with a remaining cost basis, the Company reduces the
cost basis by the amount of cash that is contractually due from the
securitization trusts. In contrast, for mortgage securities in which the
cost basis has previously reached zero, the Company records in interest
income the amount of cash that is contractually due from the
securitization trusts. In both cases, there are instances where the
Company may not receive a portion of this cash until after the balance
sheet reporting date. Therefore, these amounts are recorded as receivables
from the securitization trusts, which are included in the other assets
line on the Company’s consolidated balance sheets. As of
December 31, 2008 the Company had no receivables from securitization
trusts related to mortgage securities available-for-sale with a remaining
or zero cost basis.
|
Cost Basis
|
Unrealized
Gain
|
Estimated Fair
Value of
Mortgage
Securities
|
||||||||||
As
of December 31, 2006
|
$ | 310,760 | $ | 38,552 | $ | 349,312 | ||||||
Increases
(decreases) to mortgage securities:
|
||||||||||||
Transfer
to mortgage securities – trading upon adoption of SFAS 159
|
(47,814 | ) | 1,131 | (46,683 | ) | |||||||
Accretion
of income (A)
|
48,778 | - | 48,778 | |||||||||
Proceeds
from paydowns of securities (A) (B)
|
(179,730 | ) | - | (179,730 | ) | |||||||
Impairment
on mortgage securities - available-for-sale
|
(98,692 | ) | 98,692 | - | ||||||||
Mark-to-market
value adjustment
|
- | (138,306 | ) | (138,306 | ) | |||||||
Net
decrease to mortgage securities
|
(277,458 | ) | (38,483 | ) | (315,941 | ) | ||||||
As
of December 31, 2007
|
$ | 33,302 | $ | 69 | $ | 33,371 |
(A)
|
Cash
received on mortgage securities with no cost basis was $3.5 million for
the year ended December 31, 2007.
|
(B)
|
For
mortgage securities with a remaining cost basis, the Company reduces the
cost basis by the amount of cash that is contractually due from the
securitization trusts. In contrast, for mortgage securities in which the
cost basis has previously reached zero, the Company records in interest
income the amount of cash that is contractually due from the
securitization trusts. In both cases, there are instances where the
Company may not receive a portion of this cash until after the balance
sheet reporting date. Therefore, these amounts are recorded as receivables
from the securitization trusts, which are included in the other assets
line on the Company’s consolidated balance sheets. As of
December 31, 2007, the Company had receivables from securitization trusts
of $12.5 million, related to mortgage securities available-for-sale with a
remaining cost basis. At December 31, 2007 there were no receivables from
securitization trusts related to mortgage securities with a zero cost
basis.
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Description
|
Fair Value at
December 31,
2008
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||||||
Real
estate owned
|
$ | 70,480 | $ | - | $ | - | $ | 70,480 |
Description
|
Fair Value at
December 31,
2007
|
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
|
Significant
Other Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
||||||||||||
Real estate
owned
|
$ | 76,614 | $ | - | $ | - | $ | 76,614 |
Fair Value Adjustments
For the Year Ended
December 31
|
|||||||||||
Asset or Liability Measured at
Fair Value
|
Fair Value
Measurement
Frequency
|
2008
|
2007
|
Statement of Operation Line
Item Impacted
|
|||||||
Mortgage
securities - trading
|
Recurring
|
$ | (88,715 | ) | $ | (342,918 | ) |
Fair
value adjustments
|
|||
Mortgage
securities – available-for-sale
|
Recurring
|
(23,100 | ) | (98,692 | ) |
Impairment
on mortgage securities – available-for-sale
|
|||||
Derivative
instruments, net
|
Recurring
|
(2,627 | ) | (14,027 | ) |
(Losses)
gains on derivative instruments
|
|||||
Asset-backed
bonds secured by mortgage securities
|
Recurring
|
62,973 | 257,115 |
Fair
value adjustments
|
|||||||
Total
fair value gains (losses)
|
$ | (51,469 | ) | $ | (198,522 | ) |
Unpaid Principal
Balance
|
Gain
Recognized
|
Balance at Fair
Value
|
||||||||||
As
of December 31, 2008
|
$ | 324,243 | $ | 62,973 | $ | 5,376 | ||||||
As
of December 31, 2007
|
331,500 | 257,115 | 74,385 |
Notional Amount
|
Fair Value
|
Maximum
Days to
Maturity
|
||||||||||
As
of December 31, 2008:
|
||||||||||||
Non-hedge
derivative instruments
|
$ | 461,500 | $ | (9,034 | ) | 390 | ||||||
Cash
flow hedge derivative instruments
|
40,000 | (68 | ) | 25 | ||||||||
As
of December 31, 2007:
|
||||||||||||
Non-hedge
derivative instruments
|
$ | 1,101,500 | $ | (6,406 | ) | 756 | ||||||
Cash
flow hedge derivative instruments
|
300,000 | (490 | ) | 391 |
For the Year Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Interest
income:
|
||||||||
Mortgage
securities
|
$ | 46,997 | $ | 102,500 | ||||
Mortgage
loans held-in-portfolio
|
186,601 | 258,663 | ||||||
Other
interest income (A)
|
1,411 | 5,083 | ||||||
Total
interest income
|
$ | 235,009 | $ | 366,246 |
(A)
|
Other
interest income represents interest earned on corporate operating cash
balances.
|
For the Year Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Interest
expense:
|
||||||||
Short-term
borrowings secured by mortgage securities
|
$ | 436 | $ | 23,649 | ||||
Asset-backed
bonds secured by mortgage loans
|
95,012 | 178,937 | ||||||
Asset-backed
bonds secured by mortgage securities
|
13,271 | 17,635 | ||||||
Junior
subordinated debentures
|
6,261 | 8,148 | ||||||
Total
interest expense
|
$ | 114,980 | $ | 228,369 |
December 31,
|
December
31,
|
|||||||
2008
|
2007(A)
|
|||||||
Assets
|
||||||||
Mortgage
loans -
held-for-sale
|
$ | 1,117 | $ | 5,253 | ||||
Real
estate owned
|
324 | 2,574 | ||||||
Other
assets
|
- | 428 | ||||||
Total
assets
|
$ | 1,441 | $ | 8,255 | ||||
Liabilities
|
||||||||
Short-term
borrowings secured by mortgage loans
|
$ | - | $ | 19 | ||||
Accounts
payable and other liabilities
|
2,536 | 59,397 | ||||||
Total
liabilities
|
$ | 2,536 | $ | 59,416 |
For the Years Ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Interest
income
|
$ | 1,173 | $ | 102,648 | ||||
Interest
expense
|
(12 | ) | 79,483 | |||||
Net
interest income
|
1,185 | 23,165 | ||||||
Other
operating (expense) income:
|
||||||||
Gains
(losses) on sales of mortgage assets
|
1,281 | (2,579 | ) | |||||
Gains
(losses) on derivative instruments
|
- | (4,913 | ) | |||||
Valuation
adjustment on mortgage loans – held-for-sale
|
(3,331 | ) | (101,125 | ) | ||||
Fee
income
|
903 | 22,900 | ||||||
Premiums
for mortgage loan insurance
|
- | (2,668 | ) | |||||
Other
income
|
409 | (6,777 | ) | |||||
Total
other operating expense
|
(738 | ) | (95,162 | ) | ||||
General
and administrative expenses (A)
|
36,187 | (184,783 | ) | |||||
Gain
(loss) from discontinued operations before income tax
expense
|
36,634 | (256,780 | ) | |||||
Income
tax expense
|
13,804 | - | ||||||
Gain
(loss) income from discontinued operations
|
$ | 22,830 | $ | (256,780 | ) |
(A)
|
The
general and administrative expenses line includes the reversal of a $45.2
million liability during year ended December 31, 2008 which was recorded
in connection with the judgment rendered against NHMI in the California
Action by AIM, the settlement of which became final as of September 11,
2008.
|
December 31,
2008
|
December
31, 2007
|
|||||||
Mortgage
loans – held-for-sale:
|
||||||||
Outstanding
principal
|
$ | 15,578 | $ | 17,545 | ||||
Allowance
for the lower of cost or fair value
|
(14,461 | ) | (12,292 | ) | ||||
Mortgage
loans – held-for-sale
|
$ | 1,117 | $ | 5,253 | ||||
Weighted
average coupon
|
10.13 | % | 10.23 | % |
For the Year Ended December
31,
|
||||||||
2008
|
2007
|
|||||||
Balance,
beginning of period
|
$ | 12,292 | $ | 5,006 | ||||
Valuation
adjustment on mortgage loans - held-for-sale
|
3,331 | 101,125 | ||||||
Transfer
from the reserve for loan repurchases
|
- | 23,206 | ||||||
Transfer
to cost basis of mortgage loans – held-in-portfolio
|
- | (14,843 | ) | |||||
Reduction
due to loans securitized or sold to third parties
|
- | (82,384 | ) | |||||
Transfers
to real estate owned
|
239 | (19,818 | ) | |||||
Charge-offs,
net of recoveries
|
(1,401 | ) | - | |||||
Balance,
end of period
|
$ | 14,461 | $ | 12,292 |
Allocated Value of
Retained Interests
|
||||||||||||||||||||||||
Net Bond
Proceeds
|
Mortgage
Servicing
Rights
|
Subordinated
Bond
Classes
|
Principal
Balance
of Loans
Sold
|
Fair Value
of
Derivative
Instruments
Transferred
|
Gain
Recognized
|
|||||||||||||||||||
NMFT
Series 2007-2
|
$ | 1,331,299 | $ | 9,766 | $ | 56,387 | $ | 1,400,000 | $ | 4,161 | $ | 4,981 |
NovaStar Mortgage
Funding Trust Series
|
Constant
Prepayment
Rate
|
Average Life
(in Years)
|
Expected Total Credit Losses, Net
of Mortgage Insurance (A)
|
Discount
Rate
|
||||||||||||
2007-2
|
34 | % | 2.31 | 5.7 | % | 20 | % |
(A)
|
Represents
expected credit losses for the life of the securitization up to the
expected date in which the related asset-backed bonds can be
called.
|
For the Years Ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Balance,
beginning of period
|
$ | 2,153 | $ | 24,773 | ||||
Provision
for repurchased loans
|
(1,782 | ) | 3,254 | |||||
Transfer
to the allowance for the lower of cost of fair value on mortgage loans –
held for sale
|
- | (23,206 | ) | |||||
Charge-offs,
net
|
(276 | ) | (2,668 | ) | ||||
Balance,
end of period
|
$ | 95 | $ | 2,153 |
Balance,
beginning of period
|
$
|
62,830
|
||
Amount
capitalized in connection with transfer of loans to securitization
trusts
|
9,766
|
|||
Amortization
|
(25,252
|
)
|
||
Sale
of mortgage servicing rights
|
(47,344
|
)
|
||
Balance,
end of period
|
$
|
-
|
Maximum
Borrowing
Capacity
|
Rate
|
Days to
Reset
|
Balance
|
|||||||
December
31, 2007
|
||||||||||
Short-term
borrowings (indexed to one- month LIBOR):
|
||||||||||
Repurchase
agreement expiring May 8, 2008 (A)
|
$
|
1,900,000
|
4.57
|
% |
1
|
$
|
19
|
(A)
|
Eligible
collateral for this agreement was both mortgage loans and mortgage
securities. The maximum borrowing capacity under this facility
was reduced by the amount of borrowings outstanding from time to time with
this lender under related
facilities.
|
2007
(A)
|
||||
Maximum
month-end outstanding balance during the period
|
$
|
2,339,431
|
||
Average
balance outstanding during the period
|
865,495
|
|||
Weighted
average rate for period
|
6.80
|
% | ||
Weighted
average interest rate at period end
|
4.57
|
% |
(A)
|
Information
pertaining to the year ended December 31, 2008, was not included as the
outstanding balance was paid off during May
2008.
|
Lease
Obligations
|
||||
2009
|
$
|
1,465
|
||
2010
|
1,057
|
|||
2011
|
497
|
|||
2012
|
212
|
Lease
Receipts
|
||||
2009
|
$ | 681 | ||
2010
|
576 | |||
2011
|
419 | |||
2012
|
177 |
Fair Value Measurements at Reporting Date Using
|
|||||||||||||||||
Description
|
Fair Value at
December 31,
2008
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
Mortgage
loans-held-for-sale
|
$ | 1,117 | $ | - | $ | - | $ | 1,117 | |||||||||
Real
estate owned
|
324 | - | - | 324 | |||||||||||||
Total
|
$ | 1,441 | $ | - | $ | - | $ | 1,441 |
Description
|
Fair Value at
December 31,
2007
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||||||
Mortgage
loans-held-for-sale
|
$ | 5,253 | $ | - | $ | - | $ | 5,253 | ||||||||
Real
estate owned
|
2,574 | - | - | 2,574 | ||||||||||||
Total
|
$ | 7,827 | $ | - | $ | - | $ | 7,827 |
Asset or Liability
Measured at Fair
Value
|
Fair Value
Measurement
Frequency
|
Fair Value
Adjustments for
the Year Ended
December 31, 2008
|
Fair Value
Adjustments for the
Year Ended
December 31, 2007
|
Statement of Operations
Line Item Impacted
|
|||||||
Mortgage
loans held-for-sale
|
Nonrecurring
|
$ | (3,331 | ) | $ | (101,125 | ) |
Valuation
adjustment on mortgage loans – held-for-sale
|
|||
Real
estate owned
|
Nonrecurring
|
(656 | ) | (6,250 | ) |
(Losses)
gains on sales of mortgage assets
|
|||||
Total
fair value losses
|
$ | (3,987 | ) | $ | (107,375 | ) |
2008
|
2007
|
|||||||||||||||
Carrying Value
|
Fair Value
|
Carrying
Value
|
Fair Value
|
|||||||||||||
Financial
assets:
|
||||||||||||||||
Mortgage
loans – held-for-sale
|
$ | 1,117 | $ | 1,117 | $ | 5,253 | $ | 5,253 | ||||||||
Financial
liabilities:
|
||||||||||||||||
Short-term
borrowings
|
- | - | 19 | 19 |
For the Year Ended December
31,
|
||||||||
2008
|
2007
|
|||||||
Numerator:
|
||||||||
Loss
from continuing operations
|
$ | (683,312 | ) | $ | (467,497 | ) | ||
Dividends
on preferred shares
|
(15,273 | ) | (8,805 | ) | ||||
Loss
from continuing operations available to common
shareholders
|
(698,585 | ) | (476,302 | ) | ||||
Income
(loss) from discontinued operations, net of income tax
|
22,830 | (256,780 | ) | |||||
Loss
available to common shareholders
|
$ | (675,755 | ) | $ | (733,082 | ) | ||
Denominator:
|
||||||||
Weighted
average common shares outstanding – basic
|
9,338,131 | 9,332,405 | ||||||
Weighted
average common shares outstanding – dilutive:
|
||||||||
Weighted
average common shares outstanding – basic
|
9,338,131 | 9,332,405 | ||||||
Stock
options
|
- | - | ||||||
Restricted
stock
|
- | - | ||||||
Weighted
average common shares outstanding – dilutive
|
9,338,131 | 9,332,405 | ||||||
Basic
earnings per share:
|
||||||||
Loss
from continuing operations
|
$ | (73.17 | ) | $ | (50.10 | ) | ||
Dividends
on preferred shares
|
(1.64 | ) | (0.94 | ) | ||||
Loss
from continuing operations available to common
shareholders
|
(74.81 | ) | (51.04 | ) | ||||
Income
(loss) from discontinued operations, net of income tax
|
2.44 | ) | (27.51 | ) | ||||
Net
loss available to common shareholders
|
$ | (72.37 | ) | $ | (78.55 | ) | ||
Diluted
earnings per share:
|
||||||||
Loss
from continuing operations
|
$ | (73.17 | ) | $ | (50.10 | ) | ||
Dividends
on preferred shares
|
(1.64 | ) | (0.94 | ) | ||||
Loss
from continuing operations available to common
shareholders
|
(74.81 | ) | (51.04 | ) | ||||
Income
(loss) from discontinued operations, net of income tax
|
2.44 | ) | (27.51 | ) | ||||
Net
loss available to common shareholders
|
$ | (72.37 | ) | $ | (78.55 | ) |
For the Year Ended
December 31,
|
||||||
2008
|
2007
|
|||||
Number
of stock options and restricted stock (in thousands)
|
206 | 340 | ||||
Weighted
average exercise price of stock options
|
$
|
57.36 |
$
|
35.88 |
For the Year Ended
December 31,
|
||||||||
2008
|
2007(A)
|
|||||||
Current:
|
||||||||
Federal
|
$ | (2,804 | ) | $ | 21,422 | |||
State
and local
|
(985 | ) | 3,470 | |||||
Total
current
|
(3,789 | ) | 24,892 | |||||
Deferred:
|
||||||||
Federal
|
(12,293 | ) | 36,706 | |||||
State
and local
|
(1,512 | ) | 4,914 | |||||
Total
deferred
|
(13,805 | ) | 41,620 | |||||
Total
income tax expense (benefit)
|
$ | (17,594 | ) | $ | 66,512 |
(A)
|
Does
not reflect the deferred tax effects of unrealized gains and losses on
mortgage securities-available-for-sale and derivative financial
instruments that are included in shareholders’ equity. As a result of
these tax effects, shareholders’ equity increased by $1.9 million in
2007. Additionally, it does not reflect the deferred tax
effects of a contribution of securities and the write-off of net operating
losses related to equity based compensation recorded to additional
paid-in-capital of $7.4 million for the year ended December 31,
2007.
|
For the Year Ended
December 31,
|
||||||||
2008
|
2007
|
|||||||
Income
tax at statutory rate
|
$ | (245,317 | ) | $ | (140,345 | ) | ||
State
income taxes, net of federal tax benefit
|
(12,028 | ) | (29,618 | ) | ||||
Tax
effect of REIT termination effective January 1, 2006
|
- | (51,476 | ) | |||||
Valuation
allowance
|
250,161 | 276,967 | ||||||
Interest
and penalties
|
1,581 | 8,132 | ||||||
Tax
benefit of gain recorded in discontinued operations
|
(13,804 | ) | - | |||||
Other
|
1,813 | 2,852 | ||||||
Total
income tax expense (benefit)
|
$ | (17,594 | ) | $ | 66,512 |
December 31,
2008
|
December 31,
2007
|
|||||||
Deferred
tax assets:
|
||||||||
Basis
difference – investments
|
$ | 377,129 | $ | 229,371 | ||||
Federal
net operating loss carryforwards
|
93,783 | 60,335 | ||||||
Accrued
litigation
|
75 | 17,887 | ||||||
Allowance
for loan losses
|
106,073 | 25,375 | ||||||
State
net operating loss carryforwards
|
13,922 | 14,964 | ||||||
Deferred
compensation
|
- | 7,070 | ||||||
Excess
inclusion income
|
3,918 | 4,932 | ||||||
Loan
sale recourse obligations
|
36 | 811 | ||||||
Other
|
9,980 | 8,650 | ||||||
Gross
deferred tax asset
|
604,916 | 369,395 | ||||||
Valuation
allowance
|
(601,110 | ) | (368,312 | ) | ||||
Deferred
tax asset
|
3,806 | 1,083 | ||||||
Deferred
tax liabilities:
|
||||||||
Other
|
3,806 | 1,083 | ||||||
Deferred
tax liability
|
3,806 | 1,083 | ||||||
Net
deferred tax asset
|
$ | - | $ | - |
2008
|
2007
|
|||||||
Beginning
balance
|
$ | 6,329 | $ | 962 | ||||
Gross
decreases – tax positions in prior period
|
(5,367 | ) | - | |||||
Gross
increases – tax positions in current period
|
- | 5,367 | ||||||
Lapse
of statute of limitations
|
(482 | ) | - | |||||
Ending
balance
|
$ | 480 | $ | 6,329 |
2008
|
2007
|
|||||||
Weighted
average:
|
||||||||
Fair
value, at date of grant
|
$ | 1.40 | $ | 10.06 | ||||
Expected
life in years
|
10 | 5 | ||||||
Annual
risk-free interest rate
|
3.84 | % | 4.46 | % | ||||
Volatility
|
84.3 | % | 65.0 | % | ||||
Dividend
yield
|
0.0 | % | 0.0 | % |
Stock Options
|
Number of
Shares
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||
Outstanding
at the beginning of the year
|
267,342
|
$
|
47.81
|
||||||||
Granted
|
5,000
|
1.65
|
|||||||||
Exercised
|
-
|
-
|
|||||||||
Forfeited
or expired
|
(111,945
|
)
|
34.62
|
||||||||
Outstanding
at the end of the year
|
160,397
|
$
|
55.63
|
5.01
|
$
|
(8,880
|
) | ||||
Exercisable
at the end of the year
|
114,612
|
$
|
65.32
|
3.80
|
$
|
(7,456
|
) | ||||
Stock
options expected to vest at the end of the year
|
22,835
|
$
|
38.29
|
8.05
|
$
|
(1,424
|
) |
Stock Options
|
Number of
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term (Years)
|
Aggregate
Intrinsic
Value (in
thousands)
|
|||||||
Outstanding
at the beginning of the year
|
124,432
|
$
|
94.60
|
||||||||
Granted
|
217,101
|
15.08
|
|||||||||
Exercised
|
(6,875
|
)
|
30.48
|
||||||||
Forfeited
or expired
|
(67,316
|
)
|
37.41
|
||||||||
Outstanding
at the end of the year
|
267,342
|
$
|
47.81
|
7.94
|
$
|
(12,009
|
)
|
||||
Exercisable
at the end of the year
|
81,499
|
$
|
77.45
|
5.52
|
$
|
(6,076
|
)
|
||||
Stock
options expected to vest at the end of the year
|
41,468
|
$
|
68.23
|
8.56
|
$
|
(2,710
|
)
|
December 31, 2008
|
December 31, 2007
|
|||||||||||||||
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value
|
Number
of
Shares
|
Weighted
Average
Grant Date
Fair Value
|
|||||||||||||
Outstanding
at the beginning of year
|
107,211 | $ | 36.50 | 55,219 | $ | 111.52 | ||||||||||
Granted
|
- | - | 115,463 | 16.72 | ||||||||||||
Vested
|
(1,745 | ) | 185.68 | (2,237 | ) | 185.68 | ||||||||||
Forfeited
|
(71,220 | ) | 33.96 | (61,234 | ) | 28.55 | ||||||||||
Outstanding
at the end of period
|
34,246 | $ | 38.38 | 107,211 | $ | 36.50 |
2008
|
2007
|
|||||||||||||||
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair Value
|
|||||||||||||
Financial
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ | 24,790 | $ | 24,790 | $ | 25,364 | $ | 25,364 | ||||||||
Restricted
cash
|
6,046 | 5,595 | 8,998 | 8,998 | ||||||||||||
Mortgage
loans - held-in-portfolio
|
1,772,838 | 1,772,838 | 2,870,013 | 2,459,105 | ||||||||||||
Mortgage
securities - trading
|
7,085 | 7,085 | 109,203 | 109,203 | ||||||||||||
Mortgage
securities - available-for-sale
|
12,788 | 12,788 | 33,371 | 33,371 | ||||||||||||
Accrued
interest receivable
|
77,292 | 77,292 | 61,704 | 61,704 | ||||||||||||
Financial
liabilities:
|
||||||||||||||||
Borrowings:
|
||||||||||||||||
Asset-backed
bonds secured by mortgage loans
|
2,599,351 | 1,772,838 | 3,065,746 | 2,410,894 | ||||||||||||
Asset-backed
bonds secured by mortgage securities
|
5,376 | 5,376 | 74,385 | 74,385 | ||||||||||||
Short-term
|
- | - | 45,488 | 45,488 | ||||||||||||
Junior
subordinated debentures
|
77,323 | 6,248 | 83,561 | 83,561 | ||||||||||||
Accrued
interest payable
|
10,242 | 10,242 | 6,903 | 6,903 | ||||||||||||
Derivative
instruments:
|
||||||||||||||||
Interest
rate cap agreements
|
(8 | ) | (8 | ) | (85 | ) | (85 | ) | ||||||||
Interest
rate swap agreements
|
9,302 | 9,302 | 9,441 | 9,441 | ||||||||||||
Credit-default
swap agreements
|
(193 | ) | (193 | ) | (2,460 | ) | (2,460 | ) |
Equity Compensation Plan Information
|
|||||||||
Plan Category
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
|
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
|
Number of
Securities
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(Excluding
Shares
Reflected in
the First
Column)
|
||||||
Equity
compensation plans approved by stockholders
|
160,397
|
(A)
|
$
|
55.63
|
535,594
|
(B)
|
|||
Equity
compensation plans not approved by stockholders
|
-
|
-
|
-
|
||||||
Total
|
160,397
|
$
|
55.63
|
535,594
|
(A)
|
Certain
of the options have dividend equivalent rights (DERs) attached to them
when issued. As of December 31, 2008, these options have 22,149 DERs
attached.
|
(B)
|
Represents
shares that may be issued pursuant to the Company’s 2004 Incentive Stock
Plan, which provides for the grant of qualified incentive stock options,
non-qualified stock options, deferred stock, restricted stock, restricted
stock units, performance share awards, dividend equivalent rights and
stock appreciation awards.
|
(1)
|
The
financial statements as set forth under Item 8 of this report on Form 10-K
are included herein.
|
(2)
|
The
required financial statement schedules are omitted because the information
is disclosed elsewhere herein.
|
Exhibit
No.
|
Description
of Document
|
|
2.11
|
Servicing
Rights Transfer Agreement, dated as of October 12, 2007, between Saxon
Mortgage Services, Inc. and NovaStar Mortgage, Inc.
|
|
3.12
|
Articles
of Amendment and Restatement of NovaStar Financial, Inc.(including all
amendments and
applicable Articles Supplementary)
|
|
3.1.13
|
Certificate
of Amendment of the Registrant
|
|
3.24
|
Amended
and Restated Bylaws of the Registrant, adopted July 27,
2005
|
|
4.15
|
Specimen
Common Stock Certificate
|
|
4.26
|
Specimen
Preferred Stock Certificate
|
|
10.17
|
Employment
Agreement, dated September 30, 1996, between the Registrant and Scott F.
Hartman
|
|
10.1.18
|
Amendment
dated December 20, 2006 to the Employment Agreement dated September 30,
1996 between NovaStar Financial Inc., and Scott F.
Hartman.
|
|
10.29
|
Employment
Agreement, dated September 30, 1996, between the Registrant and W. Lance
Anderson
|
|
10.2.110
|
Amendment
dated December 20, 2006 to the Employment Agreement dated September 30,
1996 between NovaStar Financial Inc., and W. Lance
Anderson.
|
|
10.311
|
Employment
Agreement between NovaStar Mortgage, Inc. and David A. Pazgan, Executive
Vice President of NovaStar Mortgage, Inc.
|
|
10.3.112
|
Amendment
dated December 20, 2006 to the Employment Agreement dated July 15, 2004
between NovaStar Mortgage Inc., and Dave Pazgan.
|
|
10.413
|
Separation
and Consulting Agreement, dated as of October 16, 2007 among NovaStar
Mortgage and David A. Pazgan.
|
|
10.514
|
Employment
Agreement between NovaStar Financial, Inc. and Jeffrey D. Ayers,
Senior
Vice President, General Counsel and Secretary
|
|
10.615
|
Employment
Agreement between NovaStar Financial, Inc. and Gregory S. Metz, Senior
Vice President and Chief Financial Officer
|
|
10.6.116
|
Amendment
dated December 20, 2006 to the Employment Agreement dated July 15, 2004
between NovaStar Financial Inc., and Gregory
Metz.
|
1
|
Incorporated
by reference to Exhibit 2.1 to Form 10-Q filed by the Registrant on
November 14, 2007.
|
3
|
Incorporated
by reference to Exhibit 3.1 to Form 8-K filed by the Registrant with the
SEC on May 26, 2005.
|
4
|
Incorporated
by reference to Exhibit 3.3.1 to Form 10-Q filed by the Registrant with
the SEC on August 5, 2005.
|
5
|
Incorporated
by reference to Exhibit 4.1 to Form 10-Q filed by the Registrant with the
SEC on August 5, 2005.
|
6
|
Incorporated
by reference to Exhibit 4.3 to Form 8-A/A filed by the Registrant with the
SEC on January 20, 2004.
|
7
|
Incorporated
by reference to Exhibit 10.8 to Form S-11 filed by the Registrant with the
SEC on July 29, 1997.
|
8
|
Incorporated
by reference to Exhibit 10 to Form 8-K filed by the Registrant with the
SEC on December 21, 2006.
|
9
|
Incorporated
by reference to Exhibit 10.9 to Form S-11 filed by the Registrant with the
SEC on July 29, 1997.
|
10
|
Incorporated
by reference to Exhibit 10 to Form 8-K filed by the Registrant with the
SEC on December 21, 2006.
|
11
|
Incorporated
by reference to Exhibit 10.27 to Form 8-K filed by the Registrant with the
SEC on February 11, 2005.
|
12
|
Incorporated
by reference to an Exhibit 10 to Form 8-K filed by the Registrant with the
SEC on December 21, 2006.
|
13
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on October 18, 2007
|
14
|
Incorporated
by reference to Exhibit 10.28 to Form 10-K filed by the Registrant with
the SEC on March 1, 2007.
|
Exhibit
No.
|
Description
of Document
|
|
10.717
|
Separation
and Consulting Agreement, dated as of January 3, 2008, by and between
NovaStar Financial, Inc. and Gregory Metz.
|
|
10.818
|
Employment
Agreement between NovaStar Financial, Inc. and Michael L. Bamburg,
Executive President and Chief Investment Officer
|
|
10.9
|
Employment
Agreement between NovaStar Financial, Inc. and Todd M. Phillips, dated
December 17, 2007
|
|
10.10
|
Retention
Agreement, dated as of December 17, 2007, by and between NovaStar
Financial, Inc. and Todd M. Phillips
|
|
10.1119
|
Employment
Agreement, dated as of January 7, 2008, by and between NovaStar Financial,
Inc. and Rodney E. Schwatken.
|
|
10.1220
|
Form
of Indemnification Agreement for Officers and Directors of NovaStar
Financial, Inc. and its Subsidiaries
|
|
10.1321
|
NovaStar
Mortgage, Inc. Deferred Compensation Plan Amended and Restated Effective
as of December 31, 2007
|
|
10.13.122
|
Amended
and Restated Trust Agreement for the NovaStar Mortgage, Inc. Deferred
Compensation Plan
|
|
10.13.223
|
Amendment
One to the Amended and Restated Trust Agreement for the NovaStar Mortgage,
Inc. Deferred Compensation Plan
|
|
10.1424
|
1996
Executive and Non-Employee Director Stock Option Plan, as last amended
December 6, 1996
|
|
10.1525
|
NovaStar
Financial Inc. 2004 Incentive Stock Plan
|
|
10.15.126
|
Amendment
One to the NovaStar Financial, Inc. 2004 Incentive Stock Option
Plan
|
|
10.15.227
|
Stock
Option Agreement under NovaStar Financial, Inc. 2004 Incentive Stock
Plan
|
|
10.15.328
|
Restricted
Stock Agreement under NovaStar Financial, Inc. 2004 Incentive Stock
Plan
|
|
10.15.429
|
Performance
Contingent Deferred Stock Award Agreement under NovaStar Financial, Inc.
2004 Incentive Stock Plan
|
|
10.1630
|
NovaStar
Financial, Inc. Executive Bonus Plan
|
|
10.1731
|
2005
Compensation Plan for Independent Directors
|
|
10.1832
|
NovaStar
Financial, Inc. Long Term Incentive Plan
|
|
10.1933
|
Purchase
Agreement, dated March 15, 2005, among NovaStar Financial, Inc., NovaStar
Mortgage, Inc., NovaStar Capital Trust I, Merrill Lynch International and
Taberna Preferred Funding I, LTD
|
|
10.2034
|
Amended
and Restated Trust Agreement, dated March 15, 2005, between NovaStar
Financial, Inc., JPMorgan Chase Bank, Chase Bank USA and certain
administrative trustees
|
|
10.2135
|
Junior
Subordinated Indenture, dated March 15, 2005, between NovaStar Financial,
Inc., and JPMorgan Chase
Bank
|
18
|
Incorporated
by reference to Exhibit 10.32 to Form 8-K filed by the Registrant with the
SEC on March 28, 2007.
|
19
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K/A filed by the Registrant with
the SEC on January 10, 2008.
|
20
|
Incorporated
by reference to Exhibit 10.10 to Form 8-K filed by the Registrant with the
SEC on November 16, 2005.
|
21
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on December 21, 2007.
|
22
|
Incorporated
by reference to Exhibit 4.6 to Form S-8 filed by the Registrant with the
SEC on November 29, 2006.
|
23
|
Incorporated
by reference to Exhibit 10.45.1 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
24
|
Incorporated
by reference to Exhibit 10.14 to Form S-11 filed by the Registrant with
the SEC on July 29, 1997.
|
25
|
Incorporated
by reference to Exhibit 10.15 to Form S-8 filed by the Registrant with the
SEC on June 30, 2004.
|
26
|
Incorporated
by reference to Exhibit 10.46 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
27
|
Incorporated
by reference to Exhibit 10.25.1 to Form 8-K filed by the Registrant with
the SEC on February 4, 2005.
|
28
|
Incorporated
by reference to Exhibit 10.25.2 to Form 8-K filed by the Registrant with
the SEC on February 4, 2005.
|
29
|
Incorporated
by reference to Exhibit 10.25.3 to Form 8-K filed by the Registrant with
the SEC on February 4, 2005.
|
30
|
Incorporated
by reference to Exhibit 10.26 to Form 8-K filed by the Registrant with the
SEC on March 15, 2007.
|
31
|
Incorporated
by reference to Exhibit 10.30 to Form 8-K filed by the Registrant with the
SEC on February 11, 2005.
|
32
|
Incorporated
by reference to Exhibit 10.34 to Form 8-K filed by the Registrant with the
SEC on February 14, 2006.
|
33
|
Incorporated
by reference to Exhibit 10.34 to Form 10-Q filed by the Registrant with
the SEC on May 5, 2005.
|
34
|
Incorporated
by reference to Exhibit 4.4 to Form 10-Q filed by the Registrant with the
SEC on May 5, 2005.
|
35
|
Incorporated
by reference to Exhibit 4.5 to Form 10-Q filed by the Registrant with the
SEC on May 5, 2005.
|
Exhibit
No.
|
Description
of Document
|
|
10.2236
|
Parent
Guarantee Agreement, dated March 15, 2005, between NovaStar Financial,
Inc., and JP Morgan Chase Bank
|
|
10.2337
|
Purchase
Agreement, dated April 18, 2006, among NovaStar Financial, Inc., NovaStar
Mortgage, Inc., NovaStar Capital Trust II and Kodiak Warehouse
LLC
|
|
10.2438
|
Amended
and Restated Trust Agreement, dated April 18, 2006, between NovaStar
Mortgage, Inc., JPMorgan Chase Bank, NA Chase Bank USA, NA and certain
administrative trustees as well as the form of security representing the
Junior Subordinated Notes and the form of Trust Preferred Securities
Certificate
|
|
10.2539
|
Junior
Subordinated Indenture, dated April 18, 2006 between NovaStar Mortgage,
Inc., NovaStar Financial, Inc. and JPMorgan Chase Bank,
NA
|
|
10.2640
|
Parent
Guarantee Agreement, dated April 18, 2006, between NovaStar Financial,
Inc. and JP Morgan Chase Bank, NA
|
|
10.2741
|
Master
Repurchase Agreement (2007 Residual Securities), dated as of April 18,
2007, among Wachovia Investment Holdings, LLC, Wachovia Capital
Markets, LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC
and NovaStar Certificates Financial Corporation
|
|
10.27.142
|
Amendment
Number One to Master Repurchase Agreement (Residual Securities), dated as
of May 10,
2007, among Wachovia Investment Holdings, LLC, Wachovia Capital Markets,
LLC, NovaStar
Mortgage, Inc., NovaStar Certificates Financing, LLC, NovaStar
Certificates Financing
Corporation, NovaStar Financial, Inc., NFI Holding Corporation and
HomeView Lending, Inc.
|
|
10.27.243
|
Amendment Number
Two, dated as of September 7, 2007, to the Master Repurchase Agreement
(2007 Residual Securities), dated as of April 18, 2007, among
Wachovia Investment Holdings, LLC, Wachovia Capital Markets
LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing
LLC, NovaStar Certificates Financing Corp., NovaStar Financial, Inc. and
NFI Holding Corporation
|
|
10.27.344
|
Letter
Agreement (Release of Security Interest relating to Master Repurchase
Agreement (2007 Residual Securities)), dated as of January 4, 2008, by and
among NovaStar Mortgage, Inc., NovaStar Certificates Financing LLC,
NovaStar Certificates Financing Corporation, NFI Holding Corporation,
NovaStar Financial, Inc., HomeView Lending, Inc., Wachovia Investment
Holdings, LLC, and Wachovia Capital Markets, LLC.
|
|
10.2845
|
Guaranty,
dated as of April 18, 2007, made by NovaStar Financial, Inc., NFI Holding
Corporation, NovaStar Mortgage Inc. and Homeview Lending, Inc.
in favor of Wachovia Investment Holdings, LLC
|
|
10.2946
|
Collateral Security,
Setoff and Netting Agreement, dated as of April 18, 2007, among Wachovia
Bank, NA, Wachovia Investment Holdings, LLC, Wachovia Capital
Markets, LLC, NovaStar Financial, Inc., NovaStar Mortgage, Inc.
and certain of their respective affiliates
|
|
10.3047
|
Master
Repurchase Agreement (2007 Servicing Rights), dated as of April 25, 2007,
among Wachovia Bank, N.A., Wachovia Capital Markets, LLC, and NovaStar
Mortgage, Inc
|
|
10.30.148
|
Amendment
Number One to Master Repurchase Agreement (2007 Servicing Rights), dated
as of May
10, 2007, among Wachovia Bank, N.A., Wachovia Capital Markets, LLC,
NovaStar Mortgage,
Inc., NovaStar Financial, Inc., NovaStar Holding Corporation and HomeView
Lending, Inc.
|
|
10.30.249
|
Amendment
Number Two, dated as of September 7, 2007 to Master Repurchase Agreement
(2007
Servicing Rights), dated as of April 25, 2007, among Wachovia Bank, N.A.,
Wachovia Capital
Markets, LLC, NovaStar Mortgage, Inc., NovaStar Financial, Inc., NovaStar
Holding
Corporation and HomeView Lending,
Inc.
|
36
|
Incorporated
by reference to Exhibit 4.6 to Form 10-Q filed by the Registrant with the
SEC on May 5, 2005.
|
37
|
Incorporated
by reference to Exhibit 10.38 to Form 8-K filed by the Registrant with the
SEC on April 24, 2006.
|
38
|
Incorporated
by reference to Exhibit 10.39 to Form 8-K filed by the Registrant with the
SEC on April 24, 2006.
|
39
|
Incorporated
by reference to Exhibit 10.40 to Form 8-K filed by the Registrant with the
SEC on April 24, 2006.
|
40
|
Incorporated
by reference to Exhibit 10.41exhibit to Form 8-K filed by the Registrant
with the SEC on April 24,
2006.
|
41
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on April 25, 2007.
|
42
|
Incorporated
by reference to Exhibit 10.4 to Form 8-K filed by the Registrant with the
SEC on May 15, 2007
|
43
|
Incorporated
by reference to Exhibit 10.5 to Form 8-K filed by the Registrant with the
SEC on September 12, 2007.
|
44
|
Incorporated
by reference to Exhibit 10.2to Form 8-K filed by the Registrant with the
SEC on January 10, 2008.
|
45
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on April 25, 2007.
|
46
|
Incorporated
by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the
SEC on April 25, 2007.
|
47
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on May 1, 2007.
|
48
|
Incorporated
by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the
SEC on May 15, 2007
|
49
|
Incorporated
by reference to Exhibit 10.4 to Form 8-K filed by the Registrant with the
SEC on September 12, 2007.
|
Exhibit
No.
|
Description
of Document
|
|
10.30.350
|
Amendment
Number Three, dated as of October 22, 2007, to the Master Repurchase
Agreement
(2007 Servicing Rights), dated as of April 25, 2007, among Wachovia Bank,
N.A., as
Buyer, Wachovia Capital Markets, LLC, as Agent, NovaStar Mortgage, Inc.,
as Seller and a
Guarantor, and NovaStar Financial, Inc., NFI Holding Corporation, and
HomeView Lending, Inc., as
Guarantors.
|
|
10.3151
|
Guaranty
and Pledge Agreement, dated as of April 25, 2007, made by
NovaStar Financial, Inc., NFI Holding Corporation, NovaStar Mortgage Inc.
and HomeView Lending, Inc. in favor of Wachovia Bank,
N.A.
|
|
10.3252
|
Amended
and Restated Master Repurchase Agreement, dated January 5, 2007, among DB
Structured Products, Inc., Aspen Funding Corp., and Newport Funding Corp.,
as Buyers, and NovaStar Financial, Inc., NovaStar Mortgage, Inc., NovaStar
Certificates Financing Corporation, NovaStar Certificates Financing LLC,
Acceleron Lending, Inc., and HomeView Lending, Inc., as
Sellers
|
|
10.3353
|
Master
Repurchase Agreement, dated August 2, 2006, among Aspen Funding Corp.,
Newport
Funding
Corp., and Deutsche Bank Securities, Inc., as Buyers, and NovaStar
Certificates Financing Corporation, NovaStar Certificates Financing LLC,
and NovaStar Mortgage, Inc., as Sellers
|
|
10.3454
|
Guaranty
dated August 2, 2006, by NovaStar Financial, Inc., as Guarantor, in favor
of Buyers
|
|
10.3555
|
Amended
and Restated Master Netting Agreement dated January 5, 2007, among DB
Structured Products, Inc., Aspen Funding Corp., and Newport Funding Corp.,
and NovaStar Financial, Inc., NovaStar Mortgage, Inc., NovaStar
Certificates Financing Corporation, NovaStar Certificates Financing LLC,
Acceleron Lending, Inc., and HomeView Lending, Inc.
|
|
10.3656
|
Master
Repurchase Agreement dated May 19, 2006 between Greenwich Capital
Financial Products, Inc., as Buyer, and NovaStar Mortgage, Inc., NovaStar
Financial, Inc., NovaStar Home Mortgage, Inc., NovaStar Certificates
Financing Corporation, NovaStar Certificates Financing LLC, HomeView
Lending, Inc., and Acceleron Lending, Inc., as Sellers
|
|
10.36.157
|
Amendment
Number One to Master Purchase Agreement, dated September 20, 2006, among
NovaStar Mortgage, Inc., NovaStar Financial, Inc., NovaStar Home Mortgage,
Inc., NovaStar Certificates Financing Corporation, NovaStar Certificates
Financing LLC, HomeView Lending, Inc., and Acceleron Lending, Inc., as
Sellers, and Greenwich Capital Financial Products, Inc., as
Buyer
|
|
10.36.258
|
Amendment
Number Two to Master Purchase Agreement, dated October 27, 2006, among
NovaStar Mortgage, Inc., NovaStar Financial, Inc., NovaStar Home Mortgage,
Inc., NovaStar Certificates Financing Corporation, NovaStar Certificates
Financing LLC, HomeView Lending, Inc., and Acceleron Lending, Inc., as
Sellers, and Greenwich Capital Financial Products, Inc., as
Buyer
|
|
10.36.359
|
Amendment
Number Three to Master Purchase Agreement, dated November 9, 2006, among
NovaStar Mortgage, Inc., NovaStar Financial, Inc., NovaStar Home Mortgage,
Inc., NovaStar Certificates Financing Corporation, NovaStar Certificates
Financing LLC, HomeView Lending, Inc., and Acceleron Lending, Inc., as
Sellers, and Greenwich Capital Financial Products, Inc., as
Buyer
|
|
10.3760
|
Master
Repurchase Agreement dated June 30, 2006 between Greenwich Capital
Financial Products, Inc., as Buyer, and NovaStar Mortgage, Inc., NovaStar
Certificates Financing LLC, and NovaStar Certificates Financing
Corporation, as Sellers
|
|
10.3861
|
Guaranty
dated June 30, 2006, by NovaStar Financial, Inc., as Guarantor, in favor
of Buyer
|
|
10.3962
|
Sales
Agreement between NovaStar Financial, Inc. and Cantor Fitzgerald &
Co., dated September 8, 2006
|
|
10.4063
|
Master
Repurchase Agreement (2007 Whole Loan), dated as of May 9, 2007, among
Wachovia Bank, N.A., NFI Repurchase Corporation, NMI Repurchase
Corporation, HomeView Lending, Inc., NMI Property Financing, Inc.,
NovaStar Financial, Inc., NFI Holding Corporation and NovaStar Mortgage,
Inc.
|
50
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on October 25, 2007.
|
51
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on May 1, 2007.
|
52
|
Incorporated
by reference to Exhibit 10.58 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
53
|
Incorporated
by reference to Exhibit 10.59 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
54
|
Incorporated
by reference to Exhibit 10.60 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
55
|
Incorporated
by reference to Exhibit 10.61 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
56
|
Incorporated
by reference to Exhibit 10.62 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
57
|
Incorporated
by reference to Exhibit 10.62.1 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
58
|
Incorporated
by reference to Exhibit 10.62.2 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
59
|
Incorporated
by reference to Exhibit 10.62.3 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
60
|
Incorporated
by reference to Exhibit 10.63 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
61
|
Incorporated
by reference to Exhibit 10.64 to Form 10-Q filed by the Registrant with
the SEC on May 10, 2007.
|
Exhibit
No.
|
Description
of Document
|
|
10.40.164
|
Amendment
Number One, dated as of September 7, 2007, to the Master Repurchase
Agreement (2007 Whole Loan), dated as of May 9, 2007, among
Wachovia Bank, N.A., NFI Repurchase Corporation, NMI Repurchase
Corporation, HomeView Lending, Inc., NMI Property Financing,
Inc., NovaStar Financial, Inc., NFI Holding Corporation and NovaStar
Mortgage, Inc.
|
|
10.4165
|
Guaranty,
dated as of May 9, 2007, among NovaStar Financial, Inc., NFI Holding
Corporation, NovaStar Mortgage, Inc., HomeView Lending, Inc. and Wachovia
Bank, NA
|
|
10.4266
|
Master
Repurchase Agreement (2007 Non-Investment Grade Securities), dated as of
May 31, 2007, among Wachovia Investment Holdings, LLC, Wachovia Capital
Markets, LLC, NovaStar Mortgage, Inc., NovaStar Certificates Financing,
LLC, NovaStar Certificates Financing Corporation, NFI Holding Corporation
and NovaStar Financial, Inc.
|
|
10.42.167
|
Amendment
Number One, dated as of September 7, 2007, to the
Master Repurchase Agreement (Non-Investment Grade
Securities), dated as of May 31, 2007, among Wachovia
Investment Holdings, LLC, Wachovia Capital Markets LLC, NovaStar Mortgage,
Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates
Financing Corp.
|
|
10.4368
|
Guaranty,
dated as of May 31, 2007, among NovaStar Financial, Inc., NFI Holding
Corporation and Wachovia Investment Holdings, LLC
|
|
10.4469
|
Master
Repurchase Agreement (2007 Investment Grade Securities), dated as of May
31, 2007, among Wachovia Bank, N.A., Wachovia Capital Markets, LLC,
NovaStar Mortgage, Inc., NovaStar Certificates Financing, LLC, NovaStar
Certificates Financing Corporation, NFI Holding Corporation and NovaStar
Financial, Inc.
|
|
10.44.170
|
Amendment
Number One, dated as of September 7, 2007, to the Master Repurchase
Agreement (Investment Grade Securities), dated as of May 31, 2007, among
Wachovia Bank, N.A., Wachovia Capital Markets LLC,
NovaStar Mortgage, Inc., NovaStar Certificates
Financing LLC, NovaStar Certificates Financing Corp., and NovaStar
Financial, Inc. and NFI Holding Corporation.
|
|
10.4571
|
Guaranty,
dated as of May 31, 2007, among NovaStar Financial, Inc., NFI Holding
Corporation and Wachovia Bank, N.A.
|
|
10.4672
|
Waiver
Agreement dated August 17, 2007 by and among NovaStar Mortgage, Inc.,
NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A., Wachovia Capital
Markets, LLC and Wachovia Investment Holdings, LLC.
|
|
10.46.173
|
Waiver
Agreement, dated as of November 7, 2007, by and among NovaStar Mortgage,
Inc., NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.46.274
|
Waiver
Agreement, dated as of November 30, 2007, by and among NovaStar Mortgage,
Inc., NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.46.375
|
Waiver
Agreement, dated as of December 7, 2007, by and among NovaStar Mortgage,
Inc., NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
64
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on September 12, 2007
|
65
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on May 15, 2007
|
66
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on June 6, 2007
|
67
|
Incorporated
by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the
SEC on September 12, 2007
|
68
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on June 6, 2007
|
69
|
Incorporated
by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the
SEC on June 6, 2007
|
70
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on September 12, 2007
|
71
|
Incorporated
by reference to Exhibit 10.4 to Form 8-K filed by the Registrant with the
SEC on June 6, 2007
|
72
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on August 23, 2007
|
73
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on November 14, 2007.
|
74
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on December 5, 2007.
|
75
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on December 10, 2007.
|
Exhibit
No.
|
Description
of Document
|
|
10.46.476
|
Waiver
Agreement, dated as of January 4, 2008, by and among NovaStar Mortgage,
Inc., NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.46.577
|
Waiver
Agreement, dated February 4, 2008, by and among NovaStar Mortgage, Inc.,
NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.46.678
|
Waiver
Agreement, dated February 11, 2008, by and among NovaStar Mortgage, Inc.,
NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.46.779
|
Waiver
Agreement, dated March 11, 2008, by and among NovaStar Mortgage, Inc.,
NovaStar Certificates Financing LLC, NovaStar Certificates Financing
Corporation, NFI Repurchase Corporation, NMI Repurchase Corporation, NMI
Property Financing, Inc., HomeView Lending, Inc., NovaStar Financial,
Inc., NFI Holding Corporation, Wachovia Bank, N.A. and Wachovia Investment
Holdings, LLC.
|
|
10.4780
|
Securities
Purchase Agreement, dated July 16, 2007, by and among NovaStar
Financial, Inc., Massachusetts Mutual Life Insurance Company,
Jefferies Capital Partners IV L.P., Jefferies Employee Partners IV LLC and
JCP Partners IV LLC
|
|
10.4881
|
Standby
Purchase Agreement, dated July 16, 2007, by and among NovaStar
Financial, Inc., Massachusetts Mutual
Life Insurance Company, Jefferies Capital Partners IV
L.P., Jefferies Employee Partners IV LLC and JCP Partners IV
LLC
|
|
10.4982
|
Registration
Rights and Shareholders Agreement, dated July 16, 2007, by and among
NovaStar Financial, Inc., Massachusetts Mutual Life Insurance Company,
Jefferies Capital Partners IV L.P., Jefferies Employee Partners IV LLC and
JCP Partners IV LLC
|
|
10.5083
|
Letter
Agreement, dated July 16, 2007, by and
among NovaStar Financial, Inc., Massachusetts Mutual
Life Insurance Company, Jefferies Capital Partners IV L.P., Jefferies
Employee Partners IV LLC and JCP Partners IV LLC, and Scott
Hartman
|
|
10.5184
|
Letter
Agreement, dated July 16, 2007, by and among NovaStar
Financial, Inc., Massachusetts Mutual Life Insurance Company, Jefferies
Capital Partners IV L.P., Jefferies Employee Partners IV LLC
and JCP Partners IV LLC, and Lance Anderson
|
|
10.5285
|
Letter
Agreement, dated July 16, 2007, by and among NovaStar
Financial, Inc., Massachusetts Mutual Life Insurance Company, Jefferies
Capital Partners IV L.P., Jefferies Employee Partners IV LLC and JCP
Partners IV LLC, and Mike Bamburg
|
|
11.186
|
Statement
Regarding Computation of Per Share Earnings
|
|
14.187
|
NovaStar
Financial, Inc. Code of Conduct
|
|
21.1
|
Subsidiaries
of the Registrant
|
|
23.1
|
Consents
of Deloitte & Touche LLP
|
|
31.1
|
Chief
Executive Officer Certification - Section 302 of the Sarbanes-Oxley Act of
2002
|
|
31.2
|
Principal
Financial Officer Certification - Section 302 of the Sarbanes-Oxley Act of
2002
|
|
32.1
|
Chief
Executive Officer Certification - Section 906 of the Sarbanes-Oxley Act of
2002
|
|
32.2
|
Principal
Financial Officer Certification - Section 906 of the Sarbanes-Oxley Act of
2002
|
76
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on January 10, 2008.
|
77
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on February 8, 2008.
|
78
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on February 15, 2008.
|
79
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on March 14, 2008.
|
80
|
Incorporated
by reference to Exhibit 10.1 to Form 8-K filed by the Registrant with the
SEC on July 20, 2007
|
81
|
Incorporated
by reference to Exhibit 10.2 to Form 8-K filed by the Registrant with the
SEC on July 20, 2007
|
82
|
Incorporated
by reference to Exhibit 10.3 to Form 8-K filed by the Registrant with the
SEC on July 20, 2007
|
83
|
Incorporated
by reference to Exhibit 10.4 to Form 8-K filed by the Registrant with the
SEC on July 20, 2007
|
84
|
Incorporated
by reference to Exhibit 10.5 to Form 8-K filed by the Registrant with the
SEC on July 20, 2007
|
NOVASTAR
FINANCIAL, INC
|
|
(Registrant)
|
|
DATE:
May 27, 2009
|
/s/
W. LANCE ANDERSON
|
W.
Lance Anderson, Chairman of the Board
|
|
of
Directors and Chief Executive
Officer
|
DATE:
May 27, 2009
|
/s/
W. LANCE ANDERSON
|
W.
Lance Anderson, Chairman of the Board
|
|
of
Directors and Chief Executive Officer
|
|
(Principal
Executive Officer)
|
|
DATE:
May 27, 2009
|
/s/
RODNEY E. SCHWATKEN
|
Rodney
E. Schwatken, Chief Financial Officer
and
Chief Accounting Officer
|
|
(Principal
Financial Officer)
|
|
DATE:
May 27, 2009
|
/s/
EDWARD W. MEHRER
|
Edward
W. Mehrer, Director
|
|
DATE:
May 27, 2009
|
/s/
GREGORY T. BARMORE
|
Gregory
T. Barmore, Director
|
|
DATE:
May 27, 2009
|
/s/
ART N. BURTSCHER
|
Art
N. Burtscher, Director
|
|
DATE:
May 27, 2009
|
/s/
DONALD M. BERMAN
|
Donald
M. Berman, Director
|