July 21, 2017 2:55 AM ET

Capital Markets

Company Overview of Novastar Mortgage Inc.

Company Overview

Novastar Mortgage Inc. operates as an investment arm of Novation Holdings, Inc. Novastar Mortgage Inc. is a mortgage company that invests in and lends residential mortgage loans. It focuses on single-family loans and provides servicing for loans, title and settlement services, as well as risk management services. The company operates through independent brokers and regional offices. Novastar Mortgage Inc. was founded in 1996 and is based in Kansas City, Missouri. Novastar Mortgage Inc. operates as a subsidiary of Novastar Financial Inc. On July 20, 2016, Novastar Mortgage Inc. filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Mary...

8140 Ward Parkway

Suite 300

Kansas City, MO 64114-2006

United States

Founded in 1996

Phone:

816-237-7500

Key Executives for Novastar Mortgage Inc.

Chairman
Age: 56
Senior Vice President of National Sales Manager
Senior Vice President of Wholesale Operations
Chief Credit Officer
Compensation as of Fiscal Year 2017.

Novastar Mortgage Inc. Key Developments

Second Amended Reorganization Plan Approved for Novation Companies, Inc.

The US Bankruptcy Court approved the second amended plan of reorganization of Novation Companies, Inc. on June 12, 2017. The debtor has filed its amended plan in the Court on May 17, 2017. As per the amended plan, administrative claims, fee claims, US trustee fees, priority tax claims of $0.04 million and priority non-tax claims shall be paid full in cash. Noteholder Claims against Novation of an outstanding principal amount of $85.94 million and accrued and unpaid interest of $5.80 million, shall be issued the Amended Senior Notes having an interest rate of LIBOR plus 350 basis points and would mature by March 20, 2033. Additionally, the noteholders shall receive a lump sum payment to the Indenture Trustee in an amount equal to accrued and unpaid interest and an aggregate payment of $0.50 million on account of reimbursement of outstanding fees and expenses of the Noteholders’ counsel. General Unsecured Claims Against Novation of $1.15 million and General Unsecured Claims Against NovaStar Mortgage shall be paid full over a one year period, together with interest at the Federal Judgment Rate. Allowed RMBS Litigation Claim against Novation and Allowed RMBS Litigation Claim against NovaStar shall receive to the extent such claim is covered by an insurance policy, payment solely from and to the extent of the applicable coverage and in the event such claim is not covered by an insurance policy, payment shall be paid in full in cash once allowed by Final Order payable over 10 years in quarterly installments. Interests’ holders in Novation & NovaStar shall retain their interests. Intercompany Claims shall be deemed cancelled with no distribution. The plan will be funded through available cash on hand.

Second Amended Reorganization Plan Filed by Novation Companies, Inc.

Novation Companies, Inc. filed its second amended plan of reorganization in the US Bankruptcy Court on May 17, 2017. As per the plan filed, Noteholder Claims against Novation of an outstanding principal amount of $85.94 million and accrued and unpaid interest of $5.80 million, shall be issued the Amended Senior Notes having an interest rate of LIBOR plus 350 basis points and would mature by March 20, 2033. Additionally, the noteholders shall receive a lump sum payment to the Indenture Trustee in an amount equal to accrued and unpaid interest and an aggregate payment of $0.50 million on account of reimbursement of outstanding fees and expenses of the Noteholders’ counsel. General Unsecured Claims Against Novation of $1.15 million and General Unsecured Claims Against NovaStar Mortgage shall be paid full over a one year period, together with interest at the Federal Judgment Rate. The treatment of all other classes of claims shall remain unchanged.

First Ammended Reorganization Plan & Related Disclosure Statement Filed by Novation Companies, Inc.

Novation Companies, Inc. filed its first amended plan of reorganization and related disclosure statement in the US Bankruptcy Court on April 4, 2017. As per the plan filed, fee claims has been estimated at $2.5 million. Noteholder Claims Against Novation of $85.94 million shall be reinstated and interest, fees and charges will be paid full in cash. In case of insufficient funds, interest shall be paid through issuance of Amended Senior Notes Payments. Treatment of all the other classes of claims remains same as per the previous plan. The plan will be funded through available cash on hand. Novation Companies, Inc. filed modified first amended disclosure statement in the US Bankruptcy Court on April 10, 2017. Treatment of all the classes of claims remains same as per the previous disclosure statement.

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