Kansas City subprime lender NovaStar Financial Inc. fell to another 52-week low at $6 and closed at $6.40, down 79 cents, or 10.99 percent. TheStreet.com reported that NovaStar today sent a bulletin to mortgage brokers that it is suspending funding of some mortgage loans, citing a severe dislocation in the secondary market.
We have eight houses, most of which are rentals, and one is through NovaStar. I put off commenting on NovaStar but these guys truly believe in paperwork. The more mail they can generate the more they are impressed with themselves. They like to call their borrowers too. It’s almost like they are fishing for answers to whether they will have jobs next month. They also modified their monthly statements to accomodate deferred interest. The change caused borrowers to call NovaStar, asking about the new modified statements.
NovaStar borrowers, when current of their loan and with no probable cause, can expect NovaStar to start calling on or about the 3rd or 4th of the month. Now we know it is because they are severely dislocated. I suggest that they are also black and blue and singing the blues as they play in the subprime marketplace.
If you want to see foreclosures in NovaStar’s home base of Kansas City I recommend the Heart Real Estate website. You can see pictures of the homes, including pictures of the inside of most. The foreclosures shown may not be related to NovaStar in any way.