East Valley Tribune (AZ) (04/02/08)
Officials at NovaStar Financial are unsure if the mortgage lender will be able to continue "as a going concern" because it has not brought in new revenues or made considerable cuts in costs. The Kansas City company struggled mightily during the mortgage crisis and posted a loss of $733.1 million in 2007, compared with a profit of $66.3 million in 2006, according to a regulatory filing. Last year, NovaStar shuttered its lending operation--which targeted borrowers with blemished credit--and sold off its mortgage servicing rights, before turning its attention to managing its existing portfolio of mortgages and securities. Currently its only source of revenue, the portfolio saw its interest increase 20 percent during the year to $366.2 million; but NovaStar still has to pay off loans, some of which could go into default.
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