NFI Novastar Finl

Item 1.01 Entry into a Material Definitive Agreement

On January 4, 2008, NovaStar Financial, Inc. and certain of its affiliates (the
"Company") entered into a Master Repurchase Agreements Waiver ("Waiver
Agreement") with Wachovia Bank, N.A. and certain of its affiliates ("Wachovia")
pursuant to which, for a period ending on February 4, 2008 (the "Waiver
Period"), Wachovia agreed not to enforce, and waived any breach or event of
default that would otherwise have resulted solely from the Company's failure to
comply with, the requirement under the Master Repurchase Agreements described
below that the Company maintain a specified adjusted tangible net worth.
Further, the requirement under the Master Repurchase Agreements that the Company
maintain liquidity of at least $30 million was amended to require the Company to
maintain liquidity of at least $22 million during the Waiver Period. Wachovia
expressly reserved the right to terminate the Waiver Agreement prior to February
4, 2008, if any other event of default or breach occurs under the Master
Repurchase Agreements other than as described above.

The agreements affected by this Waiver Agreement are the following (the "Master
Repurchase Agreements"), copies of which have previously been filed with the
Securities and Exchange Commission:

 1. 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 Financing Corp. (the "2007 Residual Securities Facility").

 2. Master Repurchase Agreement (2007 Whole Loan) dated as of May 9, 2007,
among Wachovia Bank, National Association, NFI Repurchase Corporation, NMI
Repurchase Corporation, NMI Property Financing, Inc., HomeView Lending, Inc.,
NovaStar Financial Inc., NFI Holding Corporation and NovaStar Mortgage, Inc.

 3. Master Repurchase Agreement (2007 Non-investment Grade) 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. (the "Non-Investment Grade Facility").

 4. Master Repurchase Agreement (2007 Investment Grade) dated as of May 31,
2007, among Wachovia Bank, N. A., Wachovia Capital Markets, LLC, NovaStar
Mortgage, Inc., NovaStar Certificates Financing LLC, and NovaStar Certificates
Financing Corp.

 5. Master Repurchase Agreement (New York) dated as of July 6, 2007, between
Wachovia Bank, National Association and NovaStar Mortgage, Inc.

The foregoing is a summary of the terms of the Waiver Agreement. This summary is
qualified in its entirety by reference to the full text of the Waiver Agreement,
a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by
reference.

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In addition to the Master Repurchase Agreements listed above, Wachovia also
routinely engages in other ordinary course financial transactions with the
Company, including but not limited to financial derivative transactions, and has
acted as an underwriter for certain securitizations sponsored by the Company.





Item 1.02 Termination of a Material Definitive Agreement

In consideration of the Waiver Agreement described above and in furtherance of
the Company's priority of repaying its outstanding obligations to Wachovia, on
January 4, 2008 the Company and Wachovia entered into a letter agreement (the
"Release and Termination Agreement") pursuant to which the 2007 Residual
Securities Facility and the related Guaranty of NovaStar Financial, Inc.,
NovaStar Mortgage, Inc., NFI Holding Corporation, and HomeView Lending, Inc.,
and all rights and obligations of the parties thereunder other than obligations
that by their terms survive termination, were terminated effective on January 4,
2008. In accordance with the Release and Termination Agreement, the Company
repaid the remaining $1,648,181 of its outstanding obligations to Wachovia under
the 2007 Residual Securities Facility and paid to Wachovia a $4.0 million
termination fee provided for under the 2007 Residual Securities Facility.

Upon termination of the 2007 Residual Securities Facility, Wachovia released its
security interest arising under the 2007 Residual Securities Facility, and the
mortgage securities originally sold to Wachovia as collateral thereunder were
then sold by the Company as additional collateral under the Non-Investment Grade
Facility with Wachovia to support the outstanding obligations of the Company
under that facility. In addition, these mortgage securities, and all other
collateral sold to Wachovia under the remaining Master Repurchase Agreements
listed above, remain the property of Wachovia as additional security for the
Company's obligations arising under each of the remaining Master Repurchase
Agreements and any other transactions with Wachovia, pursuant to the terms of a
Collateral Security, Setoff and Netting Agreement between the Company and
Wachovia, a copy of which has previously been filed with the Securities and
Exchange Commission.

The foregoing is a summary of the terms of the Release and Termination
Agreement. This summary is qualified in its entirety by reference to the full
text of the Release and Termination Agreement, a copy of which is attached
hereto as Exhibit 10.2 and is incorporated herein by reference.

In addition to the Master Repurchase Agreements listed above, Wachovia also
routinely engages in other ordinary course financial transactions with the
Company, including but not limited to financial derivative transactions, and has
acted as an underwriter for certain securitizations sponsored by the Company.

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