American Banker (08/18/08) P. 9; Berry, Kate
Former subprime lender NovaStar Financial Inc.--which unloaded its servicing assets to Morgan Stanley's Saxon Mortgage Services Inc. in the fourth quarter for $147 million--is returning to the prime mortgage market by acquiring a majority stake in PipeFire LLC, a residential appraisal management company that will be renamed StreetLinks National Appraisal Services. Although the $750,000 purchase will give the company its first operating business in months, NovaStar still faces "substantial liquidity risk" due to weakness in the mortgage-backed securities market, the company conceded in its first-quarter SEC filing. After recording a $289 million loss for the three-month period, NovaStar Financial informed the agency that the "impact of market factors and the mortgage securities market" would prevent it from issuing timely financial results for the second quarter.
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