RESIDENTIAL ASSET FUNDING CORP
8-K, 1999-04-09
ASSET-BACKED SECURITIES
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<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                ----------------

                                    FORM 8-K


                                 CURRENT REPORT



                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported) February 25, 1999.


                 NovaStar Mortgage Funding Trust, Series 1999-1
           (Issuer in respect of the NovaStar Home Equity Loan Asset-
                           Backed Bonds Series 1999-1)
            ---------------------------------------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<CAPTION>
           Delaware                   333-64775              51-6512366
<S>                                  <C>                 <C> 
(State or other jurisdiction         (Commission           (IRS Employer
      of incorporation)              File Number)        Identification No.)
</TABLE>

              c/o First Union National Bank, 230 S. Tryon Street,
                      9th Floor, Charlotte, NC                       28288-1179
              ---------------------------------------------------    -----------
               (Address of principal executive offices)               (Zip Code)

        Registrant's telephone number, including area code (704) 383-9568


 -------------------------------------------------------------------------------
         (Former name or former address, if changed since last report.)


                                      -5-
<PAGE>   2


      Item 5.     See the monthly statement to Bondholders attached as Exhibit 
      20.1 hereto reflecting the required information for the February 1999 
      payment to the NovaStar Home Equity Loan Asset-Backed Bonds Series 1999-1

      Item 7.     Financial Statements and Exhibits.

      (c) Exhibits.

      Item 601 (a) of Regulation.
      S-K Exhibit Number.

      20.1        Monthly statement to holders of NovaStar Home Equity Loan
      Asset-Backed Bonds Series 1999-1 relating to the February 25, 1999 Payment
      Date.


                                      -6-
<PAGE>   3



                                   Signatures

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf of NovaStar
Mortgage Funding Trust Series 1999-1 by the undersigned thereunto duly
authorized.



Dated:  April 9, 1999    By:    First Union National Bank, as Indenture Trustee
                                and on behalf of NovaStar Home Mortgage Funding
                                Trust Series 1999-1

                                BY:   Robert Ashbaugh
                                  -----------------------
                                      Vice President

                                      -7-
<PAGE>   4


                                  EXHIBIT INDEX


20.1 Monthly statement to holders of NovaStar Home Equity Loan Asset-Backed
Bonds Series 1999-1 relating to the February 25, 1999 Payment Date.




                                      -8-


<PAGE>   1

                         NovaStar Mortgage Funding Trust
                  NovaStar Home Equity Loan Asset-Backed Bonds
                                  Series 1999-1

                             Statement To Bondholder

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
                                                  DISTRIBUTIONS IN DOLLARS
                            PRIOR                                                         CUMULATIVE              CURRENT
            ORIGINAL      PRINCIPAL                                             REALIZED   REALIZED   DEFERRED   PRINCIPAL
 CLASS     FACE VALUE      BALANCE      INTEREST      PRINCIPAL      TOTAL       LOSSES     LOSSES    INTEREST    BALANCE
- -----------------------------------------------------------------------------------------------------------------------------
<S>     <C>            <C>            <C>            <C>         <C>           <C>        <C>         <C>      <C> 
  A-1    75,000,000.00  75,000,000.00   302,027.63   163,418.66    465,446.29     0.00       0.00       0.00    74,836,581.34
  A-2    20,000,000.00  20,000,000.00    81,890.70    11,292.55     93,183.25     0.00       0.00       0.00    19,988,707.45
  A-3    45,000,000.00  45,000,000.00   235,687.50   235,808.16    471,495.66     0.00       0.00       0.00    44,764,191.84
  A-4    20,000,000.00  20,000,000.00   106,433.33    12,394.22    118,827.55     0.00       0.00       0.00    19,987,605.78
  B-1     2,197,208.51   2,197,208.51     8,848.24         0.00      8,848.24     0.00       0.00       0.00     2,197,208.51
  B-2       585,922.27     585,922.27     8,996.55         0.00      8,996.55     0.00       0.00       0.00       585,922.27
  B-3     1,318,325.11   1,318,325.10    11,507.88         0.00     11,507.88     0.00       0.00       0.00     1,318,325.10
  B-4       585,922.27     585,922.27    11,692.81         0.00     11,692.81     0.00       0.00       0.00       585,922.27
 IO-1    77,519,379.85  77,519,379.85   232,413.69         0.00    232,413.69     0.00       0.00       0.00    77,519,379.85
 IO-2    20,671,834.62  20,671,834.62    49,625.79         0.00     49,625.79     0.00       0.00       0.00    20,671,834.62
 IO-3    46,035,805.62  46,035,805.62    65,452.49         0.00     65,452.49     0.00       0.00       0.00    46,035,805.62
 IO-4    20,460,358.06  20,460,358.06    23,440.01         0.00     23,440.01     0.00       0.00       0.00    20,460,358.06

- -----------------------------------------------------------------------------------------------------------------------------
TOTALS  162,197,208.51 162,197,208.51 1,138,016.61   422,913.59  1,560,930.20     0.00       0.00       0.00   161,774,294.92
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>






<TABLE>
<CAPTION>

- -------------------------------------------------------------------------------------------------------------------
                             FACTOR INFORMATION PER $1000 OF ORIGINAL FACE                      PASS-THROUGH
                           PRIOR                                            CURRENT                 RATES
                         PRINCIPAL                                         PRINCIPAL
 CLASS     CUSIP          BALANCE      INTEREST   PRINCIPAL     TOTAL       BALANCE          CURRENT       NEXT
- -------------------------------------------------------------------------------------------------------------------
<S>      <C>           <C>            <C>         <C>         <C>         <C>                <C>           <C>
  A-1    66987WAC10    1,000.000000    4.027035   2.178915     6.205950     997.821085        5.369380%    5.366880%
  A-2    66987WAD92    1,000.000000    4.094535   0.564628     4.659163     999.435373        5.459380%    5.456880%
  A-3    66987WAE75    1,000.000000    5.237500   5.240181    10.477681     994.759819        6.285000%    6.285000%
  A-4    66987WAF41    1,000.000000    5.321667   0.619711     5.941378     999.380289        6.386000%    6.386000%
  B-1                    999.999998    4.027035   0.000000     4.027035     999.999998        5.369380%    5.366880%
  B-2                    999.999998   15.354506   0.000000    15.354506     999.999998        5.459380%    5.456880%
  B-3                    999.999998    8.729167   0.000000     8.729167     999.999998        6.285000%    6.285000%
  B-4                    999.999998   19.956250   0.000000    19.956250     999.999998        6.386000%    6.386000%
 IO-1                  1,000.000000    2.998137   0.000000     2.998137   1,000.000000        5.369380%    5.366880%
 IO-2                  1,000.000000    2.400648   0.000000     2.400648   1,000.000000        5.459380%    5.456880%
 IO-3                  1,000.000000    1.421774   0.000000     1.421774   1,000.000000        6.285000%    6.285000%
 IO-4                  1,000.000000    1.145630   0.000000     1.145630   1,000.000000        6.386000%    6.386000%
- -------------------------------------------------------------------------------------------------------------------
Seller:                                       NovaStar Financial, Inc.
Servicer:                                  NovaStar Mortgage Corporation
Record Date:                                       March 31, 1999
Distribution Date:                                February 25, 1999
- -------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>   2


                         NOVASTAR HOME EQUITY LOAN TRUST
                  NOVASTAR HOME EQUITY LOAN ASSET-BACKED BONDS
                                  SERIES 1999-1

                        STATEMENT TO BONDHOLDER - POOL I


- -------------------------------------------------------------------------------
Distribution Date:   February 25, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AGGREGATE COLLECTIONS FROM THE MORTGAGE LOANS IN POOL I
- -------------------------------------------------------------------------------
<TABLE>
<S>                                                              <C>                                     <C>
Total Collection on Pool                                         776,204.84
Total Servicer Advances                                                0.00
Total Compensating Interest                                            0.00
- -------------------------------------------------------------------------------

AVAILABLE CARRY-FORWARD AMOUNT                                                                                    0.00
AGGREGATE UNPAID CARRY-FORWARD AMOUNT                                                                             0.00

CURRENT PERIOD INSURED PAYMENTS PAID BY INSURER                                                                   0.00
AGGREGATE UNREIMBURSED INSURED AMOUNTS PAYABLE TO INSURER                                                         0.00

AGGREGATE BEGINNING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                  67,101,778.67
AGGREGATE ENDING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                     66,938,359.93

REQUIRED SUBORDINATION AMOUNT                                                                             2,519,380.00
CURRENT SUBORDINATION AMOUNT                                                                              2,519,380.00
SUBORDINATION INCREASE AMOUNT                                                                                     0.00
SUBORDINATION REDUCTION AMOUNT                                                                                    0.00
NET MONTHLY EXCESS CASHFLOW                                                                                       0.00
UNPAID ACCRUED INTEREST                                                                                           0.00
CURRENT REALIZED LOSS ON MORTGAGE LOANS                                                                           0.00
AGGREGATE REALIZED LOSS ON MORTGAGE LOANS                                                                         0.00
PREPAYMENT PENALTIES                                                                                              0.00
WEIGHTED AVERAGE MORTGAGE RATE                                                                             9.03170571%
</TABLE>


<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
DELINQUENCY             DELINQUENT     DELINQUENT   DELINQUENT    LOANS IN       REO
INFORMATION             30-59 DAYS     60-89 DAYS   90 + DAYS    FORECLOSURE   PROPERTY
- ---------------------------------------------------------------------------------------
<S>                    <C>            <C>           <C>          <C>           <C> 
PRINCIPAL BALANCE      2,526,086.38   208,954.71       0.00      445,405.75         0.00
NUMBER OF LOANS                  27            2          0               4            0
- ---------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
- ----------------------------------------------
REPURCHASE              Current     Cumulative
INFORMATION              Period       History
- ----------------------------------------------
<S>                     <C>         <C> 
PRINCIPAL BALANCE          0.00        0.00
NUMBER OF LOANS               0           0
- ----------------------------------------------

<CAPTION>

- ----------------------------------------------
CONVERTED MTGE          Current     Cumulative
LOANS INFO               Period       History
- ----------------------------------------------
<S>                     <C>         <C> 
PRINCIPAL BALANCE          0.00        0.00
NUMBER OF LOANS               0           0
- ----------------------------------------------
</TABLE>


<TABLE>
<S>                                                                                                          <C>     
CUMULATIVE LOSS PERCENTAGE                                                                                    0.00000%
DELINQUENCY PERCENTAGE                                                                                        0.66540%
ROLLING DELINQUENCY PERCENTAGE                                                                                0.66540%

PREPAYMENT INTEREST SHORTFALLS                                                                                    0.00
RELIEF ACT SHORTFALLS                                                                                             0.00
MI INSURER INSOLVENCY EVENT OCCURRED                                                                                No
</TABLE>


<PAGE>   3

                         NOVASTAR HOME EQUITY LOAN TRUST
                  NOVASTAR HOME EQUITY LOAN ASSET-BACKED BONDS
                                  SERIES 1999-1

                        STATEMENT TO BONDHOLDER - POOL II

- -------------------------------------------------------------------------------
Distribution Date:   February 25, 1999
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
AGGREGATE COLLECTIONS FROM THE MORTGAGE LOANS IN POOL II
- -------------------------------------------------------------------------------

<TABLE>
<S>                                                          <C>                                         <C>
Total Collection on Pool                                     168,703.65
Total Servicer Advances                                            0.00
Total Compensating Interest                                        0.00
- ------------------------------------------------------------------------

AVAILABLE CARRY-FORWARD AMOUNT                                                                                    0.00
AGGREGATE UNPAID CARRY-FORWARD AMOUNT                                                                             0.00

CURRENT PERIOD INSURED PAYMENTS PAID BY INSURER                                                                   0.00
AGGREGATE UNREIMBURSED INSURED AMOUNTS PAYABLE TO INSURER                                                         0.00

AGGREGATE BEGINNING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                  16,279,956.12
AGGREGATE ENDING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                     16,268,663.53

REQUIRED SUBORDINATION AMOUNT                                                                               671,835.00
CURRENT SUBORDINATION AMOUNT                                                                                671,835.00
SUBORDINATION INCREASE AMOUNT                                                                                     0.00
SUBORDINATION REDUCTION AMOUNT                                                                                    0.00
NET MONTHLY EXCESS CASHFLOW                                                                                       0.00
UNPAID ACCRUED INTEREST                                                                                           0.00
CURRENT REALIZED LOSS ON MORTGAGE LOANS                                                                           0.00
AGGREGATE REALIZED LOSS ON MORTGAGE LOANS                                                                         0.00
PREPAYMENT PENALTIES                                                                                              0.00
WEIGHTED AVERAGE MORTGAGE RATE                                                                              9.03240995%
</TABLE>


<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
DELINQUENCY              DELINQUENT   DELINQUENT   DELINQUENT   LOANS IN        REO
INFORMATION              30-59 DAYS   60-89 DAYS    90+ DAYS   FORECLOSURE    PROPERTY
- --------------------------------------------------------------------------------------
<S>                      <C>          <C>          <C>         <C>            <C> 
PRINCIPAL BALANCE        520,243.77   322,512.87       0.00    573,789.40       0.00
NUMBER OF LOANS                   4            2          0             3          0
- -------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
- ------------------------------------------------
REPURCHASE               Current     Cumulative
INFORMATION              Period       History
- ------------------------------------------------
<S>                      <C>         <C>                                                                     <C>
PRINCIPAL BALANCE         0.00        0.00
NUMBER OF LOANS              0           0
- ------------------------------------------------

<CAPTION>
- ------------------------------------------------
CONVERTED MTGE           Current     Cumulative
LOANS INFO               Period       History
- ------------------------------------------------
<S>                      <C>         <C>                                                                     <C>
PRINCIPAL BALANCE         0.00        0.00
NUMBER OF LOANS              0           0
- ------------------------------------------------
CUMULATIVE LOSS PERCENTAGE                                                                                    0.00000%
DELINQUENCY PERCENTAGE                                                                                        3.52696%
ROLLING DELINQUENCY PERCENTAGE                                                                                3.52696%

PREPAYMENT INTEREST SHORTFALLS                                                                                   0.00
RELIEF ACT SHORTFALLS                                                                                            0.00
MI INSURER INSOLVENCY EVENT OCCURRED                                                                               No
</TABLE>


<PAGE>   4


                         NOVASTAR HOME EQUITY LOAN TRUST
                  NOVASTAR HOME EQUITY LOAN ASSET-BACKED BONDS
                                  SERIES 1999-1

                       STATEMENT TO BONDHOLDER - POOL III

- -------------------------------------------------------------------------------
Distribution Date:   February 25, 1999
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
AGGREGATE COLLECTIONS FROM THE MORTGAGE LOANS IN POOL III
- -------------------------------------------------------------------------------

<TABLE>
<S>                                                          <C>                                         <C>
Total Collection on Pool                                     589,391.59
Total Servicer Advances                                            0.00
Total Compensating Interest                                        0.00
- ------------------------------------------------------------------------

AVAILABLE FUNDS CAP CARRY-FORWARD AMOUNT                                                                          0.00
AGGREGATE UNPAID AVAILABLE FUNDS CAP CARRY-FORWARD AMOUNT                                                         0.00

AVAILABLE CARRY-FORWARD AMOUNT                                                                                    0.00
AGGREGATE UNPAID CARRY-FORWARD AMOUNT                                                                             0.00

AGGREGATE BEGINNING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                  39,442,140.31
AGGREGATE ENDING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                     39,218,726.25

REQUIRED SUBORDINATION AMOUNT                                                                             1,035,806.00
CURRENT SUBORDINATION AMOUNT                                                                              1,035,806.00
SUBORDINATION INCREASE AMOUNT                                                                                     0.00
SUBORDINATION REDUCTION AMOUNT                                                                                    0.00
NET MONTHLY EXCESS CASHFLOW                                                                                       0.00
UNPAID ACCRUED INTEREST                                                                                           0.00
CURRENT REALIZED LOSS ON MORTGAGE LOANS                                                                           0.00
AGGREGATE REALIZED LOSS ON MORTGAGE LOANS                                                                         0.00
PREPAYMENT PENALTIES                                                                                              0.00
WEIGHTED AVERAGE MORTGAGE RATE                                                                              9.49016660%
</TABLE>


<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
DELINQUENCY              DELINQUENT   DELINQUENT   DELINQUENT    LOANS IN        REO
INFORMATION              30-59 DAYS   60-89 DAYS    90+ DAYS    FORECLOSURE    PROPERTY
- ---------------------------------------------------------------------------------------
<S>                      <C>          <C>          <C>          <C>            <C> 
PRINCIPAL BALANCE        429,305.07   116,274.40        0.00    53,923.76       0.00
NUMBER OF LOANS                   8            2           0            1          0
- ---------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
- ------------------------------------------------
REPURCHASE               Current     Cumulative
INFORMATION              Period       History
- ------------------------------------------------
<S>                      <C>         <C>                                                                      <C>
PRINCIPAL BALANCE          0.00        0.00
NUMBER OF LOANS               0           0
- ------------------------------------------------

<CAPTION>
- ------------------------------------------------
CONVERTED MTGE           Current     Cumulative
LOANS INFO               Period       History
- ------------------------------------------------
<S>                      <C>         <C>                                                                      <C>
PRINCIPAL BALANCE          0.00        0.00
NUMBER OF LOANS               0           0
- ------------------------------------------------

CUMULATIVE LOSS PERCENTAGE                                                                                    0.00000%
DELINQUENCY PERCENTAGE                                                                                        0.13749%
ROLLING DELINQUENCY PERCENTAGE                                                                                0.13749%

PREPAYMENT INTEREST SHORTFALLS                                                                                   0.00
RELIEF ACT SHORTFALLS                                                                                            0.00
MI INSURER INSOLVENCY EVENT OCCURRED                                                                               No
</TABLE>

<PAGE>   5

                         NOVASTAR HOME EQUITY LOAN TRUST
                  NOVASTAR HOME EQUITY LOAN ASSET-BACKED BONDS
                                  SERIES 1999-1

                        STATEMENT TO BONDHOLDER - POOL IV

- -------------------------------------------------------------------------------

Distribution Date:   February 25, 1999
- -------------------------------------------------------------------------------

- ------------------------------------------------------------------------
AGGREGATE COLLECTIONS FROM THE MORTGAGE LOANS IN POOL IV
- ------------------------------------------------------------------------

<TABLE>
<S>                                                          <C>                                         <C>
Total Collection on Pool                                     170,639.68
Total Servicer Advances                                            0.00
Total Compensating Interest                                        0.00
- ------------------------------------------------------------------------

AVAILABLE CARRY-FORWARD AMOUNT                                                                                    0.00
AGGREGATE UNPAID CARRY-FORWARD AMOUNT                                                                             0.00

CURRENT PERIOD INSURED PAYMENTS PAID BY INSURER                                                                   0.00
AGGREGATE UNREIMBURSED INSURED AMOUNTS PAYABLE TO INSURER                                                         0.00

AGGREGATE BEGINNING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                  16,049,269.29
AGGREGATE ENDING PRINCIPAL BALANCE OF MORTGAGE LOANS                                                     16,036,875.05

REQUIRED SUBORDINATION AMOUNT                                                                               460,358.00
CURRENT SUBORDINATION AMOUNT                                                                                460,358.00
SUBORDINATION INCREASE AMOUNT                                                                                     0.00
SUBORDINATION REDUCTION AMOUNT                                                                                    0.00
NET MONTHLY EXCESS CASHFLOW                                                                                       0.00
UNPAID ACCRUED INTEREST                                                                                           0.00
CURRENT REALIZED LOSS ON MORTGAGE LOANS                                                                           0.00
AGGREGATE REALIZED LOSS ON MORTGAGE LOANS                                                                         0.00
PREPAYMENT PENALTIES                                                                                              0.00
WEIGHTED AVERAGE MORTGAGE RATE                                                                             0.00000000%
</TABLE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
DELINQUENCY               DELINQUENT   DELINQUENT   DELINQUENT    LOANS IN       REO
INFORMATION               30-59 DAYS   60-89 DAYS   90 + DAYS    FORECLOSURE   PROPERTY
- ---------------------------------------------------------------------------------------
<S>                       <C>          <C>          <C>          <C>           <C> 
PRINCIPAL BALANCE         51,455.16    126,912.74      0.00      200,000.00      0.00
NUMBER OF LOANS                   1             2         0               1         0
- ---------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- ------------------------------------------------
REPURCHASE              Current     Cumulative
INFORMATION             Period       History
- ------------------------------------------------
<S>                     <C>         <C>                                                                <C>
PRINCIPAL BALANCE         0.00         0.00
NUMBER OF LOANS              0            0
- ------------------------------------------------

<CAPTION>
- ------------------------------------------------
CONVERTED MTGE          Current     Cumulative
LOANS INFO              Period        History
- ------------------------------------------------
<S>                     <C>         <C>                                                                <C>
PRINCIPAL BALANCE         0.00         0.00
NUMBER OF LOANS              0            0
- ------------------------------------------------

CUMULATIVE LOSS PERCENTAGE                                                                                    0.00000%
DELINQUENCY PERCENTAGE                                                                                        1.24713%
ROLLING DELINQUENCY PERCENTAGE                                                                                1.24713%

PREPAYMENT INTEREST SHORTFALLS                                                                                    0.00
RELIEF ACT SHORTFALLS                                                                                             0.00
MI INSURER INSOLVENCY EVENT OCCURRED                                                                                No
</TABLE>





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