- - --------------------------------------------------------------------------------
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) January 19, 1999
Residential Asset Funding Corporation.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
North Carolina 333-64775 56-2064715
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
301 South College Street, TW-06
Charlotte, North Carolina 28202-6001
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (704) 374-4868
----------------------------
No Change
- - -------------------------------------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Item 5. Other Events
In connection with the offering of NovaStar Home Equity Loan
Asset Backed Bonds, Series 1999-1 described in the related Prospectus
Supplement, certain "Computational Materials" within the meanings of the May 20,
1994 Kidder, Peabody No-Action Letter and the February 17, 1995 Public
Securities Association No-Action Letter were furnished to certain prospective
investors (the "Related Computational Materials").
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibit 99.1 - Related Computational Materials (as defined in
Item 5 above).
2
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this Report to
be signed on its behalf by the undersigned thereunto duly authorized.
RESIDENTIAL ASSET FUNDING CORPORATION
as Depositor and on behalf of NovaStar Mortgage
Funding Trust 1999-1
Registrant
By: /s/ Shanker Merchant
------------------------------------------
Name: Shanker Merchant
Title: Senior Vice President
Dated: January 27, 1999
3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- - ----------- -----------
99.1 Related Computational Materials (as defined in Item 5 above).
EXHIBIT 99.1
<PAGE>
MARKETING MEMORANDUM
1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1
$75,000,000 CLASS A-1, ASSET BACKED BONDS, SERIES 1999-1
$20,000,000 CLASS A-2, ASSET BACKED BONDS, SERIES 1999-1
$45,000,000 CLASS A-3, ASSET BACKED BONDS, SERIES 1999-1
$20,000,000 CLASS A-4, ASSET BACKED BONDS, SERIES 1999-1
The attached Marketing Memorandum (the "Marketing Memorandum") is privileged and
confidential and is intended for use by the addressee only. This Marketing
Memorandum is furnished to you solely by First Union Capital Markets, a division
of Wheat First Securities, Inc. (the "Underwriter") and not by the issuer of the
Bonds identified above (the "Bonds") or any other party. The Marketing
Memorandum is based upon information made available to the Underwriter. Neither
the Underwriter, the issuer of the Bonds, nor any other party makes any
representation to the accuracy or completeness of the information therein. The
information herein is preliminary, and will be superseded by the applicable
prospectus supplement and by any other information subsequently filed with the
Securities and Exchange Commission. The information herein may not be provided
to any third party other than the addressee's legal, tax, financial and/or
accounting advisors for the purpose of evaluating such information.
No assurance can be given as to the accuracy, appropriateness or completeness of
the Marketing Memorandum in any particular context; or as to whether the
Marketing Memorandum reflects future performance. This Marketing Memorandum
should not be construed as either a prediction or as legal, tax, and financial
or accounting advice.
Any yields or weighted average lives shown in the Marketing Memorandum are based
on prepayment and other assumptions. Actual experience may dramatically affect
such yields or weighted average lives. The principal amount and designation of
any security described in the Marketing Memorandum are subject to change prior
to issuance.
Although a registration statement (including the prospectus) relating to the
Bonds has been filed with the Securities and Exchange Commission and is
effective, the final prospectus supplement relating to the Bonds has not been
filed with the Securities and Exchange Commission. This communication shall not
constitute an offer to sell or a solicitation of an offer to buy nor shall there
be any sale of the Offered Bonds in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such state. Prospective purchasers are referred to the
final prospectus and prospectus supplement relating to the Offered Bonds for
definitive terms of the Offered Bonds and the collateral.
Please be advised that the Bonds may not be appropriate for all investors.
Potential investors must be willing to assume, among other things, market price
volatility, prepayments, yield curve and interest rate risks.
Investors should fully consider the risk of an investment in the Bonds.
If you have received this communication in error, please notify the sending
party immediately by telephone and return the original to such party by mail.
[FIRST UNION LOGO APPEARS HERE](R)
FIRST UNION CAPITAL MARKETS
a division of Wheat First Securities, Inc.
SUMMARY OF TERMS
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 2
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
$75,000,000 CLASS A-1, Home Equity Loan Asset Backed Bonds, Series 1999-1 (the "Class A-1 Bonds")
$20,000,000 CLASS A-2, Home Equity Loan Asset Backed Bonds, Series 1999-1 (the "Class A-2 Bonds")
$45,000,000 CLASS A-3, Home Equity Loan Asset Backed Bonds, Series 1999-1 (the "Class A-3 Bonds")
$20,000,000 CLASS A-4, Home Equity Loan Asset Backed Bonds, Series 1999-1 (the "Class A-4 Bonds")
ISSUER: NovaStar Mortgage Funding Trust, Series 1999-1
COLLATERAL: Adjustable rate and fixed rate mortgage loans and related
Pre-Funding Accounts.
SELLER: NovaStar Mortgage, Inc.
SERVICER: NovaStar Mortgage, Inc.
BACK-UP SERVICER: Fairbanks Capital Corp.
SECURITIES OFFERED:
SECURITIES CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4
Amount: $75,000,000 $20,000,000 $45,000,000 $20,000,000
Security Type: Floating-rate Floating-rate Fixed-Rate Fixed-Rate
Cut-Off Date: January 1, 1999 January 1, 1999 January 1, 1999 January 1, 1999
Index: 1 month LIBOR 1 month LIBOR None None
Prepayment Assumptions (PPA): 30% CPR 30% CPR 24% HEP 24% HEP
Average Life to Call: 2.529 years 2.535 years 3.185 years 3.216 years
Average Life to Maturity: 2.687 years 2.693 years 3.557 years 3.608 years
Expected Call Date: 03/25/06 03/25/06 03/25/06 03/25/06
Expected Maturity Date: 06/25/13 06/25/13 11/25/13 01/25/14
Expected Coupon: One month LIBOR One month LIBOR TBD TBD
+ TBD + TBD
Stated Maturity Date: 04/25/30 04/25/30 04/25/30 04/25/30
Payment Date: 25th of each month 25th of each month 25th of each month 25th of each month
Payment Delay: Zero Zero 24 days 24 days
Dated Date: January 29, 1999 January 29, 1999 January 1, 1999 January 1, 1999
Day Count: Actual/360 Actual/360 30/360 30/360
Pricing Date: TBD TBD TBD TBD
Days of Accrued Interest: Zero Zero 28 days 28 days
Settlement Date: (Expected) January 29, 1999 January 29, 1999 January 29, 1999 January 29, 1999
19919981998
First Payment Date: February 25, 1999 February 25, 1999 February 25, 1999 February 25, 1999
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 3
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Ratings: (S&P/Moody's) AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa
</TABLE>
DESCRIPTION OF THE BONDS: The Bonds will be secured by the pledge by
the Issuer to the Indenture Trustee pursuant
to the Indenture, the assets of the trust
will consist primarily of:
(i) four groups (each a "Group) of
adjustable rate and fixed rate mortgage
loans (the "Mortgage Loans");
(ii) all payments in respect of principal
and interest on the Mortgage Loans
(other than any principal or interest
payments due on or prior to the
applicable Cut-off Date);
(iii) amounts on deposit in segregated
accounts established by the Issuer in
the name of the Indenture Trustee;
(each, a "Pre-Funding Account")
(iv) Mortgage Insurance ("MI") policies
maintained by the Servicer in respect of
approximately [71%] of the Mortgage
Loans; and
(v) certain other property.
Four classes (each, a "Class" or a "Bond")
of Bonds will be issued.
|X| The Class A-1 Bond will be secured by
adjustable rate mortgage loans in Group
I ("the Group I Mortgage Loans").
|X| The Class A-2 Bond will be secured by
adjustable rate mortgage loans in Group
II ("the Group II Mortgage Loans").
|X| The Class A-3 Bond will be secured by
fixed rate mortgage loans in Group III
("the Group III Mortgage Loans").
|X| The Class A-4 Bond will be secured by
fixed rate mortgage loans in Group IV
("the Group IV Mortgage Loans").
Accordingly, payments on the Class A-1 Bond
will be made from Available Funds for Group
I; payments on the Class A-2 Bond are from
Available Funds for Group II; payments on
the Class A-3 Bond are from Available Funds
for Group III; and payments on the Class A-4
Bond are from Available Funds for Group IV.
Also issued under the Indenture are one or
more classes of subordinated bonds (which
are subordinated in right of payment to the
Bonds) and a residual class in the REMIC,
which are not being offered hereby.
SERVICING FEE: 50 basis points per annum.
BACK-UP SERVICING FEE: 5 basis points per annum.
INDENTURE TRUSTEE: The Chase Manhattan Bank, a New York banking
corporation.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 4
- - --------------------------------------------------------------------------------
TRUST ADMINISTRATOR: First Union National Bank, a national
banking association.
OWNER TRUSTEE: Wilmington Trust Company, a Delaware banking
corporation.
DENOMINATIONS: Minimum denominations of $25,000 and
integral multiples of $1,000 thereof.
FORM OF BONDS: Book-Entry Form, delivered through the
facilities of DTC, Cedel, and Euroclear
against payment in immediately available
funds.
RECORD DATE: For Class A-1 Bonds and Class A-2 Bonds, the
last business day before the Payment Date.
For Class A-3 Bonds and Class A-4 Bonds, the
last day of the calendar month preceding
each payment date or, in the case of the
first payment date, the record date shall be
the closing date.
BOND INSURER: Financial Security Assurance, Inc. ("FSA"),
rated AAA/Aaa/AAA by S&P, Moody's and Fitch,
respectively.
BOND INSURANCE POLICY: Timely payment of interest and ultimate
payment of principal on the Bonds will be
guaranteed by FSA.
The Bond Insurance Policy with respect to
each Class of Bonds does not cover the
Available Funds Cap Carry Forward Amount,
Prepayment Interest Shortfalls or shortfalls
in interest due to the application of the
Relief Act. The payment of such amounts may
be funded only from:
(a) any excess interest resulting from the
Available Funds Cap Rate being in excess
of the applicable Interest Rate on
future Payment Dates; and
(b) any excess cash flow resulting from any
Group that would otherwise be paid to
the holder(s) of the subordinated bonds
or residual class.
CREDIT ENHANCEMENT: (a) Initial Overcollateralization
(b) Excess servicing cash flows
(c) Cross-collateralization
(d) Bond Insurance Policy
PAYMENTS ON THE BONDS: Payments on the Bonds will be made to each
bondholder of record by the Indenture
Trustee on the 25th day of each month or, if
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 5
- - --------------------------------------------------------------------------------
such day is not a Business Day, then the
next succeeding Business Day, commencing on
February 25, 1999.
On each Payment Date, each Class of Bonds,
as of the immediately preceding Record Date,
will be entitled to payments in respect of
principal and interest from Available Funds
for such Payment Date, together with any
payments received under the Insurance
Policy.
DUE PERIOD: With respect to each Class of Bonds and any
Payment Date, the period commencing on the
second day of the calendar month preceding
the calendar month in which such Payment
Date occurs and ending on the first day of
the calendar month in which such Payment
Date occurs.
COLLECTION PERIOD: With respect to each Class of Bonds and any
Payment Date of a Mortgage Loan, the
calendar month preceding the month in which
such Payment Date occurs.
AVAILABLE FUNDS: The Available Funds with respect to each
Class of Bonds and any Payment Date will
generally be equal to the sum of the
following amounts received by the Indenture
Trustee and available in the Payment
Account, after deduction for amounts
reimbursable to the Servicer and the
Administrative Fees for such Class, on each
Payment Date for each Class:
(i) the aggregate amount of scheduled
payments on the related Mortgage Loans
due on the related Due Period;
(ii) any amounts representing interest on
amounts in the Payment Account and
miscellaneous fees and collections,
including assumption fees and prepayment
penalties with respect to the Mortgage
Loans in the related Group (but
excluding late fees);
(iii) any unscheduled payments and receipts,
including Mortgagor prepayments on the
related Mortgage Loans, Insurance
Proceeds and proceeds from any MI
Policy;
(iv) all Advances made for such Payment Date
in respect of the related Mortgage
Loans; and
(v) the amount, if any, of payments received
under the Bond Insurance Policy for such
Class.
In addition, on the Payment Date relating to
the Due Period in which the termination of
the Funding Period occurred, Available Funds
will include the amount on deposit in the
Pre-Funding Account with respect to such
Class at such time. On each
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 6
- - --------------------------------------------------------------------------------
Payment Date on or prior to the Payment Date
in April 1999, Available Funds will include
the amount, if any, withdrawn from the
Interest Coverage Account for such Class.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 7
- - --------------------------------------------------------------------------------
INTEREST CARRY-FORWARD: (a) If, on any Payment Date, the
Available Funds Cap Rate (as defined
below) for the Class A-1 and Class
A-2 Bonds limits the payment of the
full interest rate on the related
Class, the amount of any such
shortfall will be carried forward
and be due and payable to the
Bondholder of the related Class on
the following Payment Date and shall
accrue interest at the note interest
rate until paid (the "Available
Funds Cap Carry Forward Amount") .
(b) The payment of this Available Funds
Cap Carry Forward Amount would be
made in future periods from the
excess cash flows.
(c) The Bond Insurer (FSA) does not
cover the Available Funds Cap Carry
Forward Amount.
AVAILABLE FUNDS CAP RATE: The Available Funds Cap Rate with respect to
each Class of Bonds for any payment date is
a rate per annum equal to the fraction,
expressed as a percentage, the numerator and
the denominator of which are as follows,
minus the Minimum Spread:
(i) the numerator is an amount equal to
(A) 1/12 of the aggregate principal
balance of the then outstanding
Mortgage loans in the related Group
times the weighted average of the
Expense Adjusted Coupon Rate on the
then outstanding Mortgage loans in
such Group minus (B) the amount of
the Bond Insurer premium for such
payment date allocable to such
Group.
(ii) the denominator is an amount equal
to (A) the then outstanding
aggregate Bond Balance multiplied by
(B) the actual number of days
elapsed in the related interest
period divided by 360.
The "Expense Adjusted Coupon Rate" on any
Mortgage Loan is equal to the then
applicable coupon rate minus the
Administrative Fee Rate.
The "Minimum Spread" is equal to 0.50%
per annum.
The "Administrative Fee Rate" on any
Mortgage Loan is equal to the sum of (i) the
Indenture Trustee Fee Rate and (ii) the
Servicing Fee Rate and (iii) the MI
Insurance Premium on the applicable Mortgage
Loans. The Indenture Trustee Fee Rate is
equal to .0125% per annum. The Servicing Fee
Rate is equal to 0.55% per annum; 0.50% per
annum to the Servicer and 0.05% per annum to
the Back-Up Servicer.
"Bond Balance" with respect to a Class will
equal as of any Payment Date, the Original
Bond Balance as of the date of
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 8
- - --------------------------------------------------------------------------------
issuance of the Bonds less all related
principal payments paid to the respective
Bondholders on previous Payment Dates.
PAYMENTS OF PRINCIPAL: Principal payments will be payable on each
Class of Bonds on each Payment Date in an
aggregate amount generally comprising the
following:
(i) the principal portion of all
scheduled monthly payments on the
Mortgage Loans in the related Group
received or advanced by the Servicer
on the Mortgage Loans with respect
to the related Due Period;
(ii) the principal portion of all
proceeds of the repurchase of a
Mortgage Loan in the related Group
pursuant to the Servicing Agreement
or the Purchase Agreement during the
preceding calendar month;
(iii) the principal portion of all other
unscheduled collections with respect
to Mortgage Loans in the related
Group received during the related
Collection Period including net
liquidation, insurance and
termination proceeds, (excluding
proceeds paid in respect of the Bond
Insurance Policy), to the extent not
distributed in the preceding month;
(iv) any Insured Payment made with
respect to any Subordination Deficit
with respect to such Class; and
(v) with respect to the Payment Date
immediately following the end of the
Funding Period, any amounts in the
Pre-Funding Account and the Interest
Coverage Account relating to such
Group after giving effect to any
purchase of Subsequent Mortgage
Loans;
minus
(vi) the amount if any in the
Subordination Reduction Amount with
respect to such Class for such
Payment Date.
With respect to the final scheduled Payment
Date and the first Payment Date following
any acceleration of the Bonds following an
Event of Default, the amount necessary to
reduce the Principal Balance of such Class
of Bonds to zero.
PAYMENTS OF EXCESS CASH: The Net Monthly Excess Cashflow will be
applied as an accelerated payment of
principal on the Bonds until the
Subordination Amount for such class has
increased to the level equal to the Required
Subordination Amount for such Class for such
Payment Date. The Subordination Amount as of
the
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 9
- - --------------------------------------------------------------------------------
Settlement Date for each Class of Bonds will
be equal to the Required Subordination
Amount.
The "Net Monthly Excess Cashflow" for each
Class of Bonds and any Payment Date is equal
to the amount of Available Funds remaining
after distributions:
(i) to the holders of such Class of
Bonds, the related Interest Payment
Amount with respect to such Payment
Date;
(ii) to the holders of such Class of
Bonds, the related Principal Payment
Amount with respect to such Payment
Date; and
(iii) to the Bond Insurer, the sum of (a)
all amounts previously paid by the
Bond Insurer under the Bond
Insurance Policy which have not
previously been reimbursed (b) any
other amounts due to the Bond
Insurer pursuant to the Bond
Insurance Policy and (c) interest on
the foregoing as set forth in the
Bond Insurance Policy from the date
such amounts became due until paid
in full.
The "Subordination Amount" with respect to
any Payment Date and a Class of Bonds is the
excess, if any, of (x) the sum of the
aggregate Principal Balances of the Mortgage
Loans in the related Group as of the close
of business on the related Due Period and
the amount of funds in the Pre-Funding
Account as of such Payment Date held with
respect to the related Group over (y) the
Bond Principal Balance of the related Bonds
following such Payment Date.
On each Payment Date after the Subordination
Amount for each Class reaches the related
Required Subordination Amount, the Holders
of the Subordinated Bonds will be entitled
to receive the Net Monthly Excess Cashflow
for each Class. If the foregoing conditions
are met, the holders of the Subordinated
Bonds will receive all such monthly cash
flows for the related Payment Date.
OPTIONAL REDEMPTION: The Bonds may be redeemed, in full but not
in part, at the option of the Servicer, on
or after the Payment Date on which the
outstanding aggregate collateral principal
balance is less than 10% of the original
aggregate outstanding collateral balance as
of the Settlement Date.
COUPON STEP-UP: For Class A-1 Bonds and Class A-2 Bonds: If
such Bonds are not redeemed pursuant to the
Optional Redemption, the coupon on the
related Class of Bonds will be set at the
lesser of (a) one
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 10
- - --------------------------------------------------------------------------------
month LIBOR plus [2 x the related interest
spread] basis points and (b) the related
Available Funds Cap Rate.
For Class A-3 Bonds and Class A-4 Bonds: If
such Bonds are not redeemed pursuant to the
Optional Redemption, the coupon on the
related Class of Bonds will increase by [50]
basis points.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 11
- - --------------------------------------------------------------------------------
INTEREST PERIOD: Interest on the Class A-1 and A-2 Bonds in
respect of any Payment Date will accrue from
the preceding Payment Date (or in the case
of the first Payment Date, from the Closing
Date) through the day preceding such Payment
Date on the basis of the actual number of
days in the Interest Period and a 360-day
year.
Interest on the Class A-3 and A-4 Bonds in
respect of any Payment Date will accrue for
the calendar month immediately preceding the
month in which the Payment Date occurs on
the basis of a 360-day year and twelve 30
day months.
PRE-FUNDING ACCOUNTS: The Initial Mortgage Loans in Group I, Group
II, Group II and Group IV as of the
Settlement Date will have approximately the
following aggregate principal balances:
Group I: [$67.1] million.
Group II: [$16.3] million.
Group III: [$39.4] million.
Group IV: [$16.0] million.
Additional Mortgage loans with
characteristics similar to those of the
Mortgage Loans will be transferred to the
Trust during the period ending 90 days from
the Settlement Date (the "Funding Period")
in exchange for release of funds from the
Pre-Funding Accounts.
INTEREST COVERAGE ACCOUNTS: On the Settlement Date, the Indenture
Trustee will deposit in a segregated
account, the Interest Coverage Account, cash
amounts as required by the Bond Insurer to
cover shortfalls in the Bond Interest
payable on each Class of Bonds attributable
to the Pre-Funding feature during the
Funding Period.
MANDATORY PREPAYMENT: Each Class of Bonds will be partially
prepaid on the Payment Date immediately
following the end of the Funding Period to
the extent that any amount remains on
deposit in the Pre-Funding Account held with
respect to such Class on such Payment Date.
Although no assurance can be given, it is
anticipated that the principal amount of
Subsequent Mortgage Loans sold to the Issuer
and included in the Trust Estate will
require the application of substantially all
of the Pre-Funding Accounts and that there
should be no material amount of principal
prepaid to the Bonds.
COMPENSATING INTEREST
PAYMENTS: With respect to any Payment Date, any
Prepayment Interest Shortfalls during the
preceding calendar month will be covered by
the Servicer, but only to the extent such
Prepayment Interest
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 12
- - --------------------------------------------------------------------------------
Shortfalls do not exceed an amount equal to
the total servicing fee payable to the
Servicer with respect to such Payment Date.
The "Prepayment Interest Shortfall" for any
Payment Date is equal to the aggregate
shortfall, if any, in collections of
interest resulting from Mortgagor
prepayments in full or in part on the
Mortgage Loans during the preceding calendar
month.
No assurance can be given that Compensating
Interest will be sufficient to cover
Prepayment Interest Shortfalls for any
Payment Date.
MI INSURER: Commonwealth Mortgage Assurance Company,
("CMAC") rated AA/Aa2 by Standard & Poor's
and Moody's.
MI POLICY: The following approximate percentages (by
aggregate principal balance as of the
Cut-off Date) of the Initial Mortgage Loans
are covered by a MI Policy:
Adjustable Rate Group I: 71.15%
Adjustable Rate Group II: 70.95%
Fixed Rate Group III: 71.13%
Fixed Rate Group IV: 71.44%
The remainder of the Initial Mortgage Loans
will not be covered by a MI Policy.
Each MI Policy insures losses on the
Principal Balance of each such Mortgage Loan
in an amount generally equal to, at the
option of the MI Insurer, either:
(a) the sum of (i) the Principal Balance
of the Mortgage Loan, (ii) unpaid
accumulated interest due on the
Mortgage Loan at the Mortgage Rate
(for a maximum period of two years)
and (iii) the amount of certain
advances (such as hazard insurance,
taxes, maintenance expenses and
foreclosure costs) made by the
Servicer, reduced by certain
mitigating amounts collected with
respect thereto (collectively, the
"Loss Amount"), in which case the MI
Insurer would take title to the
Mortgaged Property,
or
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 13
- - --------------------------------------------------------------------------------
(b) an amount equal to the product of
(i) the Loss Amount and (ii) the
percentage of coverage (the
"Coverage Percentage") specified in
the MI Policy, in which case the
Issuer would retain title to (and
the proceeds obtained in a
foreclosure and sale of) the
Mortgaged Property.
The Coverage Percentage specified in each MI
Policy will be different depending upon the
original Loan-to-Value Ratio of the related
Mortgage Loan (Mortgage Loans with higher
Loan-to-Value Ratios will generally have a
higher Coverage Percentage and Mortgage
Loans with lower Loan-to-Value Ratios will
generally have a lower Coverage Percentage).
All Mortgage Loans with an MI policy will be
insured down to an effective original
Loan-to-Value of 50%, subject to certain
restrictions.
Each MI Policy will remain in place for the
life of the related Mortgage Loan provided
that no MI Insurer Insolvency Event has
occurred and is continuing even if the
related Loan-to-Value Ratio decreases below
80%.
If a MI Insurer Insolvency Event has
occurred or is continuing, the Issuer shall,
at the direction of the Bond Insurer, and
may in the case of a Bond Insurer Default,
terminate the MI Policy on any Mortgage Loan
that is not then past due.
Claim payments, if any, under a MI Policy
will be made to the Servicer, deposited in
the Collection Account and treated in the
same manner as a prepayment of the related
Mortgage Loan. Premiums payable on the MI
Policies (the "MI Premiums") will be paid
monthly by the Servicer with funds withdrawn
from the Collection Account with respect to
the related Mortgage Loans.
CONVERSION FEATURE OF
ADJUSTABLE-RATE LOANS: 96.46% of the loans in Group I and 92.01% of
the loans in Group II (by aggregate
principal balance as of the cut-off date)
are, at the borrower's option, subject to
conversion during a certain period into
fixed-rate loans at 250 basis points over
the FNMA rate for thirty-year fixed-rate
loans only if certain conditions are met,
for example, (a) the borrower has made
timely payments on the loan during the
twelve months immediately preceding the
conversion date; (b) the borrower occupies
the property; (c) the value of the property
has not declined since the date of the
original loan; and (d) the borrower meets
the Servicer's property and credit
standards.
REMOVAL OF CONVERTED LOANS
PURSUANT TO THE CONVERSION
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 14
- - --------------------------------------------------------------------------------
FEATURE: In the event of a conversion of a loan from
an adjustable-rate to a fixed-rate, NovaStar
Capital, Inc., an affiliate of the Seller
and Servicer, will be obligated to purchase
the loan form the pool at the outstanding
principal balance of the loan. That is, the
converted loans will be bought out of, and
thus removed from, the pool after the
conversion, causing a prepayment in pool.
The purchase obligation of NovaStar Capital,
Inc. will be fully guaranteed by NovaStar
Financial, Inc., a publicly-held company.
LEGAL INVESTMENT
CONSIDERATIONS: The Bonds are SMMEA eligible securities.
ERISA CONSIDERATIONS: The Issuer believes that the Bonds are ERISA
eligible, subject to individual Plan account
restrictions. Accordingly, any Plan
fiduciary considering whether to purchase
any Bonds on behalf of a Plan should consult
with its counsel prior to purchase of such
Bonds.
TAXATION: A REMIC election will be made for tax
purposes.
NOTE RATINGS: AAA/Aaa by S&P and Moody's
FURTHER INFORMATION: If you have any questions, please call:
Bill Ingram at (704) 383-7727, Capital
Markets Syndicate Desk Russ Andrews at (704)
374-3472, Debt Capital Markets
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 15
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED AVERAGE LIFE (WAL) AND
PAYMENT WINDOWS TABLE
TO CALL (10%)
PPA* 0 50 75 100 125 150
CLASS A1 BOND
<S> <C> <C> <C> <C> <C> <C>
WAL 21.366 5.271 3.477 2.529 1.939 1.534
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 6/25/27 4/25/13 9/25/08 3/25/06 8/25/04 7/25/03
CLASS A2 BOND
WAL 21.257 5.273 3.482 2.535 1.945 1.540
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 6/25/27 4/25/13 9/25/08 3/25/06 8/25/04 7/25/03
CLASS A3 BOND
WAL 15.302 6.152 4.237 3.185 2.524 2.070
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 6/25/27 4/25/13 9/25/08 3/25/06 8/25/04 7/25/03
CLASS A4 BOND
WAL 15.969 6.287 4.292 3.216 2.544 2.085
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 6/25/27 4/25/13 9/25/08 3/25/06 8/25/04 7/25/03
TO MATURITY
PPA* 0 50 75 100 125 150
CLASS A1 BOND
WAL 21.457 5.596 3.705 2.687 2.054 1.620
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 10/25/28 1/25/25 6/25/18 6/25/13 2/25/10 11/25/07
CLASS A2 BOND
WAL 21.336 5.595 3.709 2.693 2.060 1.626
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 9/25/28 1/25/25 6/25/18 6/25/13 2/25/10 11/25/07
CLASS A3 BOND
WAL 15.328 6.357 4.627 3.557 2.839 2.334
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 9/25/28 4/25/24 4/25/18 11/25/13 3/25/13 8/25/10
CLASS A4 BOND
WAL 15.996 6.517 4.715 3.608 2.872 2.357
FIRST PAY 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99 2/25/99
LAST PAY 9/25/28 6/25/24 8/25/18 1/25/14 6/25/13 10/25/10
</TABLE>
*100 PERCENT PREPAYMENT ASSUMPTION (PPA) REPRESENTS 30%
CPR FOR THE ARM COLLATERAL, AND 24% HEP FOR THE FIXED
COLLATERAL. 24% HEP REPRESENTS 2.4% CPR IN MONTH 1 OF
THE LIFE OF A LOAN, INCREASING EACH MONTH BY 2.4% CPR
UNTIL MONTH 10 AND REMAINING CONSTANT AT 24% CPR
THEREAFTER.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 16
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A-1 AVAILABLE FUNDS CAP RATE*
TO CALL (10%)
PERIOD DATE AFC RATE PERIOD DATE AFC RATE
<S> <C> <C> <C> <C> <C> <C>
0 1/29/99
1 2/25/99 9.514% 44 9/25/02 9.200%
2 3/25/99 9.165% 45 10/25/02 9.523%
3 4/25/99 8.258% 46 11/25/02 9.200%
4 5/25/99 8.560% 47 12/25/02 9.523%
5 6/25/99 8.278% 48 1/25/03 9.200%
6 7/25/99 8.582% 49 2/25/03 9.200%
7 8/25/99 8.330% 50 3/25/03 10.239%
8 9/25/99 8.341% 51 4/25/03 9.200%
9 10/25/99 8.651% 52 5/25/03 9.523%
10 11/25/99 8.368% 53 6/25/03 9.200%
11 12/25/99 8.676% 54 7/25/03 9.523%
12 1/25/00 8.393% 55 8/25/03 9.200%
13 2/25/00 8.406% 56 9/25/03 9.200%
14 3/25/00 9.035% 57 10/25/03 9.523%
15 4/25/00 8.434% 58 11/25/03 9.200%
16 5/25/00 8.747% 59 12/25/03 9.523%
17 6/25/00 8.464% 60 1/25/04 9.200%
18 7/25/00 8.779% 61 2/25/04 9.200%
19 8/25/00 8.496% 62 3/25/04 9.869%
20 9/25/00 8.512% 63 4/25/04 9.200%
21 10/25/00 8.831% 64 5/25/04 9.523%
22 11/25/00 9.133% 65 6/25/04 9.200%
23 12/25/00 9.474% 66 7/25/04 9.523%
24 1/25/01 9.173% 67 8/25/04 9.200%
25 2/25/01 9.194% 68 9/25/04 9.200%
26 3/25/01 10.257% 69 10/25/04 9.523%
27 4/25/01 9.239% 70 11/25/04 9.200%
28 5/25/01 9.588% 71 12/25/04 9.523%
29 6/25/01 9.287% 72 1/25/05 9.200%
30 7/25/01 9.639% 73 2/25/05 9.200%
31 8/25/01 9.310% 74 3/25/05 10.239%
32 9/25/01 9.282% 75 4/25/05 9.200%
33 10/25/01 9.591% 76 5/25/05 9.523%
34 11/25/01 9.229% 77 6/25/05 9.200%
35 12/25/01 9.532% 78 7/25/05 9.523%
36 1/25/02 9.200% 79 8/25/05 9.200%
37 2/25/02 9.200% 80 9/25/05 9.200%
38 3/25/02 10.239% 81 10/25/05 9.523%
39 4/25/02 9.200% 82 11/25/05 9.200%
40 5/25/02 9.523% 83 12/25/05 9.523%
41 6/25/02 9.200% 84 1/25/06 9.200%
42 7/25/02 9.523% 85 2/25/06 9.200%
43 8/25/02 9.200% 86 3/25/06 10.247%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 17
- - --------------------------------------------------------------------------------
*Derived assuming six-month LIBOR remains constant at 5.005% using 100% of the
PPA.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 18
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A-2 AVAILABLE FUNDS CAP RATE*
TO CALL (10%)
PERIOD DATE AFC RATE PERIOD DATE AFC RATE
<S> <C> <C> <C> <C> <C> <C>
0 1/29/99
1 2/25/99 9.515% 44 9/25/02 9.082%
2 3/25/99 9.166% 45 10/25/02 9.401%
3 4/25/99 8.240% 46 11/25/02 9.082%
4 5/25/99 8.541% 47 12/25/02 9.402%
5 6/25/99 8.260% 48 1/25/03 9.082%
6 7/25/99 8.563% 49 2/25/03 9.082%
7 8/25/99 8.281% 50 3/25/03 10.109%
8 9/25/99 8.342% 51 4/25/03 9.082%
9 10/25/99 8.649% 52 5/25/03 9.402%
10 11/25/99 8.365% 53 6/25/03 9.082%
11 12/25/99 8.674% 54 7/25/03 9.402%
12 1/25/00 8.391% 55 8/25/03 9.082%
13 2/25/00 8.404% 56 9/25/03 9.082%
14 3/25/00 9.033% 57 10/25/03 9.402%
15 4/25/00 8.432% 58 11/25/03 9.082%
16 5/25/00 8.745% 59 12/25/03 9.402%
17 6/25/00 8.462% 60 1/25/04 9.082%
18 7/25/00 8.777% 61 2/25/04 9.082%
19 8/25/00 8.493% 62 3/25/04 9.743%
20 9/25/00 8.510% 63 4/25/04 9.082%
21 10/25/00 9.232% 64 5/25/04 9.402%
22 11/25/00 8.937% 65 6/25/04 9.082%
23 12/25/00 9.312% 66 7/25/04 9.402%
24 1/25/01 9.016% 67 8/25/04 9.082%
25 2/25/01 9.037% 68 9/25/04 9.083%
26 3/25/01 10.082% 69 10/25/04 9.402%
27 4/25/01 9.080% 70 11/25/04 9.083%
28 5/25/01 9.424% 71 12/25/04 9.402%
29 6/25/01 9.127% 72 1/25/05 9.083%
30 7/25/01 9.474% 73 2/25/05 9.083%
31 8/25/01 9.151% 74 3/25/05 10.109%
32 9/25/01 9.124% 75 4/25/05 9.083%
33 10/25/01 9.403% 76 5/25/05 9.402%
34 11/25/01 9.048% 77 6/25/05 9.083%
35 12/25/01 9.410% 78 7/25/05 9.402%
36 1/25/02 9.082% 79 8/25/05 9.083%
37 2/25/02 9.082% 80 9/25/05 9.083%
38 3/25/02 10.109% 81 10/25/05 9.402%
39 4/25/02 9.082% 82 11/25/05 9.083%
40 5/25/02 9.401% 83 12/25/05 9.402%
41 6/25/02 9.082% 84 1/25/06 9.083%
42 7/25/02 9.401% 85 2/25/06 9.083%
43 8/25/02 9.082% 86 3/25/06 10.116%
</TABLE>
*Derived assuming six-month LIBOR remains constant at 5.005% using 100% of the
PPA.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 19
- - --------------------------------------------------------------------------------
CLASS A-1 AVAILABLE FUNDS CAP RATE*
<TABLE>
<CAPTION>
TO CALL (10%)
PERIOD DATE AFC RATE PERIOD DATE AFC RATE
<S> <C> <C> <C> <C> <C>
0 1/29/99
1 2/25/99 9.514% 44 9/25/02 14.639%
2 3/25/99 9.165% 45 10/25/02 15.210%
3 4/25/99 8.258% 46 11/25/02 15.602%
4 5/25/99 8.561% 47 12/25/02 16.139%
5 6/25/99 8.279% 48 1/25/03 15.602%
6 7/25/99 8.583% 49 2/25/03 15.602%
7 8/25/99 8.398% 50 3/25/03 17.328%
8 9/25/99 8.410% 51 4/25/03 15.667%
9 10/25/99 8.738% 52 5/25/03 16.206%
10 11/25/99 8.452% 53 6/25/03 15.667%
11 12/25/99 8.764% 54 7/25/03 16.206%
12 1/25/00 8.478% 55 8/25/03 15.667%
13 2/25/00 8.491% 56 9/25/03 15.667%
14 3/25/00 9.126% 57 10/25/03 16.273%
15 4/25/00 8.538% 58 11/25/03 15.732%
16 5/25/00 8.856% 59 12/25/03 16.273%
17 6/25/00 8.570% 60 1/25/04 15.732%
18 7/25/00 8.889% 61 2/25/04 15.732%
19 8/25/00 8.702% 62 3/25/04 16.851%
20 9/25/00 8.719% 63 4/25/04 15.732%
21 10/25/00 9.064% 64 5/25/04 16.273%
22 11/25/00 11.462% 65 6/25/04 15.732%
23 12/25/00 11.886% 66 7/25/04 16.273%
24 1/25/01 11.512% 67 8/25/04 15.732%
25 2/25/01 11.538% 68 9/25/04 15.732%
26 3/25/01 12.857% 69 10/25/04 16.273%
27 4/25/01 11.612% 70 11/25/04 15.732%
28 5/25/01 12.985% 71 12/25/04 16.273%
29 6/25/01 12.582% 72 1/25/05 15.732%
30 7/25/01 13.053% 73 2/25/05 15.732%
31 8/25/01 12.716% 74 3/25/05 17.471%
32 9/25/01 12.678% 75 4/25/05 15.732%
33 10/25/01 13.282% 76 5/25/05 16.273%
34 11/25/01 13.692% 77 6/25/05 15.732%
35 12/25/01 14.134% 78 7/25/05 16.273%
36 1/25/02 13.649% 79 8/25/05 15.732%
37 2/25/02 13.649% 80 9/25/05 15.732%
38 3/25/02 15.165% 81 10/25/05 16.273%
39 4/25/02 13.733% 82 11/25/05 15.732%
40 5/25/02 15.138% 83 12/25/05 16.273%
41 6/25/02 14.633% 84 1/25/06 15.732%
42 7/25/02 15.138% 85 2/25/06 15.732%
43 8/25/02 14.639% 86 3/25/06 17.471%
</TABLE>
*Derived assuming six-month LIBOR increases to a level beyond the highest
maximum
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 20
- - --------------------------------------------------------------------------------
attainable rate on the underlying adjustable rate mortgage loans using 100% of
the PPA.
<TABLE>
<CAPTION>
CLASS A-2 AVAILABLE FUNDS CAP RATE*
TO CALL (10%)
PERIOD DATE AFC RATE PERIOD DATE AFC RATE
<S> <C> <C> <C> <C> <C>
0 1/29/99
1 2/25/99 9.515% 44 9/25/02 14.591%
2 3/25/99 9.166% 45 10/25/02 15.937%
3 4/25/99 8.240% 46 11/25/02 15.407%
4 5/25/99 8.541% 47 12/25/02 16.063%
5 6/25/99 8.260% 48 1/25/03 15.529%
6 7/25/99 8.563% 49 2/25/03 15.529%
7 8/25/99 8.281% 50 3/25/03 17.247%
8 9/25/99 8.444% 51 4/25/03 15.529%
9 10/25/99 8.755% 52 5/25/03 16.064%
10 11/25/99 8.468% 53 6/25/03 15.614%
11 12/25/99 8.780% 54 7/25/03 16.152%
12 1/25/00 8.494% 55 8/25/03 15.615%
13 2/25/00 8.507% 56 9/25/03 15.615%
14 3/25/00 9.143% 57 10/25/03 16.152%
15 4/25/00 8.536% 58 11/25/03 15.615%
16 5/25/00 8.852% 59 12/25/03 16.240%
17 6/25/00 8.566% 60 1/25/04 15.700%
18 7/25/00 8.884% 61 2/25/04 15.700%
19 8/25/00 8.598% 62 3/25/04 16.817%
20 9/25/00 8.770% 63 4/25/04 15.700%
21 10/25/00 11.667% 64 5/25/04 16.240%
22 11/25/00 11.297% 65 6/25/04 15.700%
23 12/25/00 11.830% 66 7/25/04 16.240%
24 1/25/01 11.457% 67 8/25/04 15.700%
25 2/25/01 11.483% 68 9/25/04 15.700%
26 3/25/01 12.797% 69 10/25/04 16.240%
27 4/25/01 12.377% 70 11/25/04 15.700%
28 5/25/01 12.838% 71 12/25/04 16.240%
29 6/25/01 12.439% 72 1/25/05 15.700%
30 7/25/01 12.905% 73 2/25/05 15.700%
31 8/25/01 12.471% 74 3/25/05 17.436%
32 9/25/01 12.593% 75 4/25/05 15.700%
33 10/25/01 13.842% 76 5/25/05 16.240%
34 11/25/01 13.330% 77 6/25/05 15.700%
35 12/25/01 14.102% 78 7/25/05 16.240%
36 1/25/02 13.619% 79 8/25/05 15.700%
37 2/25/02 13.619% 80 9/25/05 15.700%
38 3/25/02 15.131% 81 10/25/05 16.240%
39 4/25/02 14.453% 82 11/25/05 15.701%
40 5/25/02 14.952% 83 12/25/05 16.241%
41 6/25/02 14.539% 84 1/25/06 15.701%
42 7/25/02 15.040% 85 2/25/06 15.701%
43 8/25/02 14.539% 86 3/25/06 17.436%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 21
- - --------------------------------------------------------------------------------
*Derived assuming six-month LIBOR increases to a level beyond the highest
maximum attainable rate on the underlying adjustable rate mortgage loans using
100% of the PPA.
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 22
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Group I Initial Mortgage Loans
All Mortgage Loans
---------------------------------
<S> <C>
Number of Adjustable Rate Loans 733
Aggregate Principal Balance $67,101,778.67
Percentage of 1st Lien Mortgage Loans 100.00%
(by number of loans)
Principal Balance as of the Cut-Off Date
Average $91,544.04
Range $22,944.02 - $238,213.17
Coupon Rates
Weighted Average 10.118%
Range 7.375% - 13.250%
Remaining Term to Maturity
(in months)
Weighted Average 356
Range 171 - 359
Loan-to-Value Ratio at Origination
Weighted Average 82.11%
Range 9.43% - 95.00%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 23
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Group II Initial Mortgage Loans
All Mortgage Loans
---------------------------------
<S> <C>
Number of Adjustable Rate Loans 95
Aggregate Principal Balance $16,279,956.12
Percentage of 1st Lien Mortgage Loans 100.00%
(by number of loans)
Principal Balance as of the Cut-Off Date
Average $171,367.96
Range $28,769.74 - $618,530.02
Coupon Rates
Weighted Average 10.120%
Range 7.500% - 12.250%
Remaining Term to Maturity
(in months)
Weighted Average 355
Range 304 - 359
Loan-to-Value Ratio at Origination
Weighted Average 82.03%
Range 46.16% - 90.00%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 24
- - --------------------------------------------------------------------------------
Group III Initial Mortgage Loans
<TABLE>
<CAPTION>
All Mortgage Loans
----------------------------------
<S> <C>
Number of Fixed Rate Loans 527
Aggregate Principal Balance $39,442,140.31
Percentage of 1st Lien Mortgage Loans 100.00%
(by number of loans)
Principal Balance as of the Cut-Off Date
Average $74,842.77
Range $23,746.28 - $229,650.47
Coupon Rates
Weighted Average 10.079%
Range 7.125% - 14.490%
Remaining Term to Maturity
(in months)
Weighted Average 234
Range 115 - 359
Loan-to-Value Ratio at Origination
Weighted Average 80.10%
Range 10.55% - 95.00%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 25
- - --------------------------------------------------------------------------------
Group IV Initial Mortgage Loans
<TABLE>
<CAPTION>
All Mortgage Loans
----------------------------------
<S> <C>
Number of Fixed Rate Loans 146
Aggregate Principal Balance $16,049,269.29
Percentage of 1st Lien Mortgage Loans 100.00%
(by number of loans)
Principal Balance as of the Cut-Off Date
Average $109,926.50
Range $24,957.53 - $865,395.27
Coupon Rates
Weighted Average 10.066%
Range 7.750% - 14.490%
Remaining Term to Maturity
(in months)
Weighted Average 240
Range 172 - 359
Loan-to-Value Ratio at Origination
Weighted Average 80.14%
Range 16.54% - 95.00%
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 26
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGE PROPERTIES OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Location Loans Aggregate Principal Balance Principal Balance
-------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Alaska 1 70,019.13 0.10 %
Arizona 25 2,465,632.12 3.67
California 30 3,008,979.22 4.48
Colorado 9 1,049,204.87 1.56
Connecticut 9 881,804.57 1.31
District of Columbia 2 222,483.91 0.33
Florida 139 12,951,730.28 19.30
Georgia 25 2,396,596.10 3.57
Idaho 6 471,915.59 0.70
Illinois 19 1,757,175.14 2.62
Indiana 20 1,565,503.07 2.33
Iowa 1 46,827.08 0.07
Kentucky 16 1,056,532.61 1.57
Louisiana 3 247,650.89 0.37
Maryland 8 716,617.64 1.07
Michigan 45 4,066,962.24 6.06
Minnesota 13 1,132,711.60 1.69
Mississippi 6 337,140.28 0.50
Missouri 39 3,153,209.33 4.70
Montana 1 106,105.65 0.16
Nebraska 1 36,923.16 0.06
Nevada 22 2,729,666.86 4.07
New Jersey 1 82,608.79 0.12
New Mexico 4 442,727.78 0.66
North Carolina 66 5,152,331.10 7.68
Ohio 37 3,170,307.15 4.72
Oklahoma 6 546,621.12 0.81
Oregon 7 986,452.63 1.47
Pennsylvania 23 1,818,775.23 2.71
South Carolina 10 807,940.25 1.20
Tennessee 18 1,317,008.70 1.96
Texas 57 5,314,342.15 7.92
Utah 17 1,964,628.32 2.93
Virginia 11 1,043,157.53 1.55
Washington 31 3,625,935.11 5.40
West Virginia 1 119,934.32 0.18
Wisconsin 4 237,617.15 0.35
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 27
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MORTGAGE LOAN TYPE OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Mortgage Loan Type Loans Aggregate Principal Balance Principal Balance
------------------ ----- --------------------------- -----------------
<S> <C> <C> <C>
One-Year CMT 35 3,260,549.05 4.86 %
1YRCMT180 2 62,127.53 0.09
2/28 6-Month LIBOR 641 58,344,100.30 86.95
3/27 6-Month LIBOR 42 4,197,903.26 6.26
Six-Month LIBOR 13 1,237,098.53 1.84
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
LOAN TO VALUE RATIOS OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans by
Range of Loan-to-Value Number of Aggregate Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
5.01 - 10.00 1 49,956.75 0.07 %
30.01 - 35.00 1 22,944.02 0.03
35.01 - 40.00 3 256,608.71 0.38
40.01 - 45.00 2 179,620.72 0.27
45.01 - 50.00 2 238,664.17 0.36
50.01 - 55.00 5 380,950.93 0.57
55.01 - 60.00 9 743,103.71 1.11
60.01 - 65.00 45 3,278,178.47 4.89
65.01 - 70.00 35 2,537,247.07 3.78
70.01 - 75.00 83 6,163,368.13 9.19
75.01 - 80.00 153 14,269,157.55 21.26
80.01 - 85.00 144 13,726,296.09 20.46
85.01 - 90.00 245 24,784,350.56 36.94
90.01 - 95.00 5 471,331.79 0.70
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 28
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL BALANCES OF THE GROUP I INITIAL MORTGAGE RATE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Range of Principal Balances ($) Loans Aggregate Principal Balance Principal Balance
------------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
15,000.01 - 25,000.00 1 22,944.02 0.03 %
25,000.01 - 50,000.00 102 4,104,224.88 6.12
50,000.01 - 75,000.00 192 12,132,827.04 18.08
75,000.01 - 100,000.00 180 15,492,532.69 23.09
100,000.01 - 125,000.00 124 13,959,469.65 20.80
125,000.01 - 150,000.00 69 9,328,422.43 13.90
150,000.01 - 175,000.00 27 4,361,162.84 6.50
175,000.01 - 200,000.00 18 3,341,011.31 4.98
200,000.01 - 225,000.00 16 3,422,348.66 5.10
225,000.01 - 250,000.00 4 936,835.15 1.40
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
REMAINING TERMS TO MATURITY OF THE GROUP I INITIAL MORTGAGE RATE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Remaining Term (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
171 - 175 2 62,127.53 0.09 %
306 - 310 3 210,996.51 0.31
311 - 315 1 95,294.37 0.14
316 - 320 1 219,662.51 0.33
326 - 330 3 226,753.52 0.34
331 - 335 4 316,730.92 0.47
336 - 340 7 589,569.44 0.88
341 - 345 2 139,165.99 0.21
346 - 350 4 367,180.62 0.55
351 - 355 177 16,245,810.23 24.21
356 145 13,897,287.17 20.71
357 164 14,815,103.96 22.08
358 149 13,271,468.17 19.78
359 71 6,644,627.73 9.90
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 29
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TYPES OF MORTGAGED PROPERTIES OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Property Type Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Attached Housing 5 363,536.36 0.54 %
Condo Hi-Rise 7 731,938.90 1.09
Condo Lo-Rise 15 948,163.31 1.41
Detached Housing 1 76,392.34 0.11
Manufactured 102 8,029,146.68 11.97
Multi Unit 21 2,414,950.13 3.60
PUD 23 2,884,091.52 4.30
PUD Deminimus 1 121,124.73 0.18
PUD Regular 8 831,226.43 1.24
Single Family Residence 550 50,701,208.27 75.56
--- ------------- -----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
USE OF PROCEEDS OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Use of Proceeds Loans Aggregate Principal Balance Principal Balance
--------------- ----- --------------------------- -----------------
Const-Perm--- Cash Out 21 1,778,036.93 2.65 %
Const-Perm--- No Cash Out 16 1,199,442.18 1.79
Purchase 292 27,147,981.92 40.46
Refinance--- Cash Out 312 28,890,951.96 43.06
Refinance--- No Cash Out 92 8,085,365.68 12.05
-- ------------ -----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 30
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCCUPANCY STATUS OF THE MORTGAGED PROPERTIES OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Occupancy Status Loans Aggregate Principal Balance Principal Balance
---------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Investment Non-Owner Occupied 20 1,504,869.33 2.24 %
Investment Owner Occupied 1 29,947.84 0.04
Primary 698 64,243,503.85 95.74
Secondary 14 1,323,457.65 1.97
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
DOCUMENTATION TYPE OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Documentation Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Full 593 52,888,002.37 78.82 %
Limited 37 3,726,028.34 5.55
Stated 103 10,487,747.96 15.63
--- ------------- -----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
RISK CLASSIFICATIONS OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Risk Classification Loans Aggregate Principal Balance Principal Balance
------------------- ----- --------------------------- -----------------
AA 85 9,509,749.96 14.17 %
A 235 22,471,248.89 33.49
A- 174 16,158,979.35 24.08
B 111 9,880,857.63 14.73
C 90 6,055,758.01 9.02
D 38 3,025,184.83 4.51
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 31
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DELINQUENCIES OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Number of Days Delinquent Loans Aggregate Principal Balance Principal Balance
------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
0 - 29 678 61,755,132.05 92.03 %
30 - 59 44 4,305,687.22 6.42
60 - 89 11 1,040,959.40 1.55
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
MORTGAGE RATES OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Range of Mortgage Rates (%) Loans Aggregate Principal Balance Principal Balance
--------------------------- ----- --------------------------- -----------------
7.001 - 7.500 1 139,678.45 0.21 %
7.501 - 8.000 6 682,019.01 1.02
8.001 - 8.500 33 3,155,655.92 4.70
8.501 - 9.000 58 6,135,306.81 9.14
9.001 - 9.500 93 8,665,036.35 12.91
9.501 - 10.000 163 15,339,315.63 22.86
10.001 - 10.500 133 12,450,421.62 18.55
10.501 - 11.000 117 10,374,924.68 15.46
11.001 - 11.500 49 3,753,867.00 5.59
11.501 - 12.000 45 3,433,259.98 5.12
12.001 - 12.500 24 2,107,433.39 3.14
12.501 - 13.000 8 744,272.97 1.11
13.001 - 13.500 3 120,586.86 0.18
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 32
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINIMUM RATES OF THE GROUP I INITIAL MORTGAGE RATE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Range of Minimum Rates (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
7.001 - 7.500 2 165,200.18 0.25 %
7.501 - 8.000 6 682,019.01 1.02
8.001 - 8.500 34 3,206,813.03 4.78
8.501 - 9.000 61 6,562,773.88 9.78
9.001 - 9.500 93 8,639,136.64 12.87
9.501 - 10.000 167 15,625,872.65 23.29
10.001 - 10.500 124 11,685,618.40 17.41
10.501 - 11.000 117 10,374,924.68 15.46
11.001 - 11.500 49 3,753,867.00 5.59
11.501 - 12.000 45 3,433,259.98 5.12
12.001 - 12.500 24 2,107,433.39 3.14
12.501 - 13.000 8 744,272.97 1.11
13.001 - 13.500 3 120,586.86 0.18
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
INITIAL PERIODIC RATE CAP OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Initial Periodic Rate Cap (%) Loans Aggregate Principal Balance Principal Balance
----------------------------- ----- --------------------------- -----------------
1.000 13 1,237,098.53 1.84 %
2.000 37 3,322,676.58 4.95
3.000 683 62,542,003.56 93.20
--- ------------- -----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
PERIODIC RATE CAP OF ALL THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans
Number of Mortgage by Aggregate
Periodic Rate Cap (%) Loans Aggregate Principal Balance Principal Balance
--------------------- ----- --------------------------- -----------------
1.000 696 63,779,102.09 95.05 %
2.000 37 3,322,676.58 4.95
-- ------------ ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 33
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAXIMUM RATES OF THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Range of Maximum Rates (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
13.001 - 13.500 1 25,521.73 0.04 %
14.001 - 14.500 2 190,835.56 0.28
14.501 - 15.000 12 1,320,482.59 1.97
15.001 - 15.500 39 3,610,282.12 5.38
15.501 - 16.000 65 6,767,157.93 10.08
16.001 - 16.500 89 8,343,517.24 12.43
16.501 - 17.000 157 14,783,025.02 22.03
17.001 - 17.500 122 11,526,611.60 17.18
17.501 - 18.000 117 10,374,924.68 15.46
18.001 - 18.500 49 3,753,867.00 5.59
18.501 - 19.000 45 3,433,259.98 5.12
19.001 - 19.500 24 2,107,433.39 3.14
19.501 - 20.000 8 744,272.97 1.11
20.001 - 20.500 3 120,586.86 0.18
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 34
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEXT INTEREST ADJUSTMENT DATE OF THE GROUP I INITIAL MORTGAGE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Next Adjustment Date Loans Aggregate Principal Balance Principal Balance
-------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
01/01/00 1 62,468.70 0.09 %
02/01/00 1 84,487.19 0.13
02/01/99 8 722,565.70 1.08
03/01/99 7 692,730.86 1.03
04/01/99 7 504,781.34 0.75
05/01/99 5 299,697.61 0.45
06/01/99 1 78,971.43 0.12
07/01/00 32 3,164,809.71 4.72
07/01/01 4 377,181.68 0.56
07/01/99 1 150,074.68 0.22
08/01/00 118 10,572,935.72 15.76
08/01/01 11 1,052,298.77 1.57
08/01/99 6 535,625.71 0.80
09/01/00 123 11,591,292.51 17.27
09/01/01 12 1,112,896.03 1.66
09/01/99 8 929,362.62 1.39
09/02/00 1 118,808.34 0.18
10/01/00 151 13,438,149.21 20.03
10/01/01 8 929,724.30 1.39
10/01/99 6 498,611.90 0.74
11/01/00 146 12,899,993.37 19.22
11/01/01 3 371,474.80 0.55
11/01/99 1 147,353.26 0.22
12/01/00 67 6,290,300.05 9.37
12/01/01 4 354,327.68 0.53
12/01/99 1 120,855.50 0.18
- ---------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 35
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS MARGINS OF THE GROUP I INITIAL MORTGAGE RATE LOANS
Percentage of Group I
Mortgage Loans by
Number of Mortgage Aggregate
Range of Gross Margins (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
3.001 - 3.500 3 210,996.51 0.31 %
3.501 - 4.000 7 534,371.62 0.80
4.001 - 4.500 15 1,359,375.98 2.03
4.501 - 5.000 96 8,845,435.01 13.18
5.001 - 5.500 230 22,827,939.56 34.02
5.501 - 6.000 187 16,661,881.72 24.83
6.001 - 6.500 85 6,732,451.35 10.03
6.501 - 7.000 33 3,232,533.47 4.82
7.001 - 7.500 37 3,164,651.85 4.72
7.501 - 8.000 21 1,916,917.69 2.86
8.001 - 8.500 15 1,273,069.26 1.90
8.501 - 9.000 3 251,276.89 0.37
9.001 - 9.500 1 90,877.76 0.14
- --------- ----
Totals 733 $67,101,778.67 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 36
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGE PROPERTIES OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Location Loans Aggregate Principal Balance Principal Balance
-------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Alaska 1 315,609.64 1.94 %
Arizona 1 314,363.06 1.93
California 6 2,220,340.91 13.64
Connecticut 1 118,278.95 0.73
Florida 16 2,783,673.24 17.10
Georgia 3 821,609.54 5.05
Illinois 2 190,648.77 1.17
Indiana 1 138,424.14 0.85
Kansas 1 35,974.21 0.22
Maryland 2 623,724.24 3.83
Michigan 6 607,320.54 3.73
Minnesota 2 110,279.39 0.68
Missouri 3 486,411.71 2.99
Nebraska 1 369,435.07 2.27
Nevada 3 790,832.30 4.86
New Mexico 1 113,642.87 0.70
North Carolina 10 716,224.50 4.40
Ohio 3 191,922.20 1.18
Oklahoma 1 89,460.41 0.55
Oregon 2 417,915.32 2.57
Pennsylvania 7 687,314.36 4.22
South Carolina 2 103,866.93 0.64
Tennessee 5 959,378.97 5.89
Texas 10 2,425,706.62 14.90
Virginia 1 62,839.12 0.39
Washington 4 584,759.11 3.59
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 37
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MORTGAGE LOAN TYPE OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Mortgage Loan Type Loans Aggregate Principal Balance Principal Balance
------------------ ----- --------------------------- -----------------
<S> <C> <C> <C>
One-Year CMT 4 1,230,072.95 7.56 %
2/28 6-Month LIBOR 83 13,113,174.93 80.55
3/27 6-Month LIBOR 6 1,350,677.39 8.30
3/27 One-Year CMT 2 586,030.85 3.60
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
LOAN TO VALUE RATIOS OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans by
Range of Loan-to-Value Number of Aggregate Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
------------------------- -------------- ----------------- -----------------
45.01 - 50.00 1 298,179.40 1.83 %
55.01 - 60.00 1 56,959.17 0.35
60.01 - 65.00 5 332,464.45 2.04
65.01 - 70.00 5 792,792.97 4.87
70.01 - 75.00 14 1,163,398.10 7.15
75.01 - 80.00 26 4,443,123.49 27.29
80.01 - 85.00 26 4,730,245.41 29.06
85.01 - 90.00 17 4,462,793.13 27.41
-- ------------ -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 38
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL BALANCES OF THE GROUP II INITIAL MORTGAGE RATE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Range of Principal Balances ($) Loans Aggregate Principal Balance Principal Balance
------------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
25,000.01 - 50,000.00 11 472,195.14 2.90 %
50,000.01 - 75,000.00 24 1,525,019.42 9.37
75,000.01 - 100,000.00 9 741,021.34 4.55
100,000.01 - 125,000.00 9 1,029,704.08 6.32
125,000.01 - 150,000.00 3 412,289.22 2.53
150,000.01 - 175,000.00 2 332,729.13 2.04
175,000.01 - 200,000.00 2 377,220.82 2.32
225,000.01 - 250,000.00 4 982,549.81 6.04
250,000.01 - 275,000.00 7 1,869,822.29 11.49
275,000.01 - 300,000.00 8 2,339,142.14 14.37
300,000.01 - 325,000.00 3 952,378.43 5.85
325,000.01 - 350,000.00 3 1,028,783.98 6.32
350,000.01 - 375,000.00 3 1,086,009.06 6.67
375,000.01 - 400,000.00 2 756,703.20 4.65
400,000.01 - 425,000.00 1 408,985.14 2.51
425,000.01 - 450,000.00 2 862,665.40 5.30
475,000.01 - 500,000.00 1 484,207.50 2.97
600,000.01 - 625,000.00 1 618,530.02 3.80
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 39
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REMAINING TERMS TO MATURITY OF THE GROUP II INITIAL MORTGAGE RATE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Remaining Term (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
301 - 305 1 270,676.18 1.66 %
336 - 340 1 287,851.45 1.77
341 - 345 1 295,728.45 1.82
346 - 350 1 148,155.20 0.91
351 - 355 23 4,859,808.64 29.85
356 18 2,734,390.07 16.80
357 20 2,900,864.40 17.82
358 20 3,517,108.33 21.60
359 10 1,265,373.40 7.77
-- ------------ ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
TYPES OF MORTGAGED PROPERTIES OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Property Type Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
Attached Housing 2 128,058.97 0.79 %
Condo Hi-Rise 2 370,362.23 2.27
Condo Lo-Rise 1 247,984.21 1.52
Manufactured 13 825,875.97 5.07
Multi Unit 3 560,421.86 3.44
PUD 8 2,625,740.46 16.13
PUD Regular 2 218,888.20 1.34
Single Family Residence 64 11,302,624.22 69.43
-- ------------- -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 40
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
USE OF PROCEEDS OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Use of Proceeds Loans Aggregate Principal Balance Principal Balance
--------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Const-Perm--- Cash Out 6 432,443.21 2.66 %
Const-Perm--- N/A 1 77,490.11 0.48
Const-Perm--- No Cash Out 1 76,203.54 0.47
Purchase 41 7,736,483.88 47.52
Refinance--- Cash Out 31 5,500,330.30 33.79
Refinance--- No Cash Out 15 2,457,005.08 15.09
-- ------------ -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
OCCUPANCY STATUS OF THE MORTGAGED PROPERTIES OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Occupancy Status Loans Aggregate Principal Balance Principal Balance
---------------- ----- --------------------------- -----------------
Investment Non-Owner Occupied 3 538,417.60 3.31 %
Primary 91 15,675,329.32 96.29
Secondary 1 66,209.20 0.41
- --------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
DOCUMENTATION TYPE OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Documentation Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
Full 76 11,836,280.09 72.70 %
Limited 6 1,823,370.31 11.20
Stated 13 2,620,305.72 16.10
-- ------------ -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 41
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RISK CLASSIFICATIONS OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Risk Classification Loans Aggregate Principal Balance Principal Balance
------------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
AA 13 3,810,884.58 23.41 %
A 17 5,341,297.00 32.81
A- 18 2,985,164.56 18.34
B 22 2,399,497.55 14.74
C 21 1,410,244.61 8.66
D 4 332,867.82 2.04
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 42
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DELINQUENCIES OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Number of Days Delinquent Loans Aggregate Principal Balance Principal Balance
------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
0 - 29 81 14,016,851.48 86.10 %
30 - 59 9 1,338,206.58 8.22
60 - 89 5 924,898.06 5.68
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
MORTGAGE RATES OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Range of Mortgage Rates (%) Loans Aggregate Principal Balance Principal Balance
--------------------------- ----- --------------------------- -----------------
7.001 - 7.500 1 298,179.40 1.83 %
7.501 - 8.000 3 216,196.79 1.33
8.001 - 8.500 3 944,244.16 5.80
8.501 - 9.000 3 801,425.11 4.92
9.001 - 9.500 6 1,741,952.02 10.70
9.501 - 10.000 12 3,791,825.27 23.29
10.001 - 10.500 23 3,617,765.93 22.22
10.501 - 11.000 12 1,625,979.75 9.99
11.001 - 11.500 17 2,026,481.58 12.45
11.501 - 12.000 14 1,029,259.32 6.32
12.001 - 12.500 1 186,646.79 1.15
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 43
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINIMUM RATES OF THE GROUP II INITIAL MORTGAGE RATE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Range of Minimum Rates (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
7.001 - 7.500 1 298,179.40 1.83 %
7.501 - 8.000 3 216,196.79 1.33
8.001 - 8.500 4 1,214,920.34 7.46
8.501 - 9.000 2 530,748.93 3.26
9.001 - 9.500 6 1,741,952.02 10.70
9.501 - 10.000 12 3,791,825.27 23.29
10.001 - 10.500 23 3,617,765.93 22.22
10.501 - 11.000 12 1,625,979.75 9.99
11.001 - 11.500 17 2,026,481.58 12.45
11.501 - 12.000 14 1,029,259.32 6.32
12.001 - 12.500 1 186,646.79 1.15
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
INITIAL PERIODIC RATE CAP OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Initial Periodic Rate Cap (%) Loans Aggregate Principal Balance Principal Balance
----------------------------- ----- --------------------------- -----------------
2.000 4 1,230,072.95 7.56 %
3.000 91 15,049,883.17 92.44
-- ------------- -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
PERIODIC RATE CAP OF ALL THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans
Number of Mortgage by Aggregate
Periodic Rate Cap (%) Loans Aggregate Principal Balance Principal Balance
--------------------- ----- --------------------------- -----------------
1.000 89 14,463,852.32 88.84 %
2.000 6 1,816,103.80 11.16
- ------------ -----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 44
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAXIMUM RATES OF THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Range of Maximum Rates (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
13.001 - 13.500 1 298,179.40 1.83 %
14.001 - 14.500 1 270,676.18 1.66
14.501 - 15.000 4 504,048.24 3.10
15.001 - 15.500 3 944,244.16 5.80
15.501 - 16.000 1 242,897.48 1.49
16.001 - 16.500 6 1,741,952.02 10.70
16.501 - 17.000 12 3,791,825.27 23.29
17.001 - 17.500 24 3,913,494.38 24.04
17.501 - 18.000 12 1,625,979.75 9.99
18.001 - 18.500 16 1,730,753.13 10.63
18.501 - 19.000 14 1,029,259.32 6.32
19.001 - 19.500 1 186,646.79 1.15
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
NEXT INTEREST ADJUSTMENT DATE OF THE GROUP II INITIAL MORTGAGE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Next Adjustment Date Loans Aggregate Principal Balance Principal Balance
-------------------- ----- --------------------------- -----------------
02/01/00 1 148,155.20 0.91 %
04/01/00 1 287,851.45 1.77
05/01/01 1 298,179.40 1.83
05/01/99 1 270,676.18 1.66
07/01/00 3 193,888.45 1.19
08/01/00 19 4,367,740.79 26.83
09/01/00 14 1,714,319.95 10.53
09/01/01 1 60,673.35 0.37
09/01/99 4 1,255,125.22 7.71
10/01/00 19 2,585,254.76 15.88
10/01/01 1 315,609.64 1.94
11/01/00 18 2,869,326.46 17.62
11/01/01 2 647,781.87 3.98
12/01/00 8 938,760.87 5.77
12/01/01 2 326,612.53 2.01
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 45
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS MARGINS OF THE GROUP II INITIAL MORTGAGE RATE LOANS
Percentage of Group II
Mortgage Loans by
Number of Mortgage Aggregate
Range of Gross Margins (%) Loans Aggregate Principal Balance Principal Balance
-------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
3.001 - 3.500 1 270,676.18 1.66 %
3.501 - 4.000 2 676,149.96 4.15
4.001 - 4.500 5 1,187,317.75 7.29
4.501 - 5.000 3 688,791.18 4.23
5.001 - 5.500 21 5,278,920.10 32.43
5.501 - 6.000 36 5,077,434.15 31.19
6.001 - 6.500 15 1,339,892.52 8.23
6.501 - 7.000 2 244,456.46 1.50
7.001 - 7.500 1 86,814.44 0.53
7.501 - 8.000 7 1,299,658.90 7.98
8.001 - 8.500 2 129,844.48 0.80
- ---------- ----
Totals 95 $16,279,956.12 100.00 %
== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 46
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGE PROPERTIES OF THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage by Aggregate
Location Loans Aggregate Principal Balance Principal Balance
-------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Alaska 1 128,647.40 0.33 %
Arizona 8 715,913.24 1.82
Arkansas 1 55,695.01 0.14
California 20 2,473,662.71 6.27
Colorado 1 185,675.95 0.47
Connecticut 4 280,489.00 0.71
Delaware 4 194,399.11 0.49
Florida 121 8,966,000.55 22.73
Georgia 20 1,415,642.84 3.59
Illinois 8 583,695.49 1.48
Indiana 32 1,963,536.99 4.98
Kansas 3 229,840.23 0.58
Kentucky 6 523,644.65 1.33
Louisiana 1 112,702.54 0.29
Maryland 5 430,033.41 1.09
Michigan 24 1,631,161.90 4.14
Minnesota 3 185,935.69 0.47
Mississippi 6 492,631.17 1.25
Missouri 14 685,516.83 1.74
Montana 1 104,819.40 0.27
Nevada 3 349,384.58 0.89
North Carolina 52 4,054,980.99 10.28
Ohio 36 2,122,248.54 5.38
Oklahoma 6 361,553.17 0.92
Oregon 5 492,573.73 1.25
Pennsylvania 23 1,640,664.67 4.16
South Carolina 43 2,497,055.85 6.33
South Dakota 1 56,928.56 0.14
Tennessee 38 3,223,264.17 8.17
Texas 15 1,397,381.29 3.54
Utah 3 240,900.92 0.61
Virginia 8 670,424.81 1.70
Washington 7 786,433.93 1.99
West Virginia 4 188,700.99 0.48
- ---------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 47
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Loan to Value Ratios of all the Group III Initial Mortgage Loans
Percentage of Group
III Mortgage Loans by
Range of Loan-to-Value Number of Aggregate Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
------------------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
10.01 - 15.00 1 39,949.59 0.10 %
15.01 - 20.00 1 32,042.61 0.08
20.01 - 25.00 1 29,989.59 0.08
25.01 - 30.00 2 49,841.68 0.13
35.01 - 40.00 3 83,632.26 0.21
40.01 - 45.00 4 236,628.46 0.60
45.01 - 50.00 5 231,398.75 0.59
50.01 - 55.00 8 488,426.60 1.24
55.01 - 60.00 10 477,931.27 1.21
60.01 - 65.00 35 2,229,979.81 5.65
65.01 - 70.00 33 2,540,857.17 6.44
70.01 - 75.00 74 5,239,399.48 13.28
75.01 - 80.00 122 8,734,713.55 22.15
80.01 - 85.00 102 8,137,249.40 20.63
85.01 - 90.00 110 9,172,620.75 23.26
90.01 - 95.00 16 1,717,479.34 4.35
-- ------------ ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 48
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MORTGAGE RATES OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage By Aggregate
Range of Mortgage Rates (%) Loans Aggregate Principal Balance Principal Balance
--------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
7.001 - 7.500 2 340,752.94 0.86 %
7.501 - 8.000 11 767,696.70 1.95
8.001 - 8.500 29 2,302,643.60 5.84
8.501 - 9.000 54 5,197,655.40 13.18
9.001 - 9.500 59 4,799,143.98 12.17
9.501 - 10.000 102 7,431,806.36 18.84
10.001 - 10.500 66 5,117,098.28 12.97
10.501 - 11.000 86 5,732,305.21 14.53
11.001 - 11.500 49 3,129,665.86 7.93
11.501 - 12.000 43 2,920,310.73 7.40
12.001 - 12.500 14 925,506.46 2.35
12.501 - 13.000 9 562,427.20 1.43
13.001 - 13.500 2 156,656.47 0.40
14.001 - 14.500 1 58,471.12 0.15
- --------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
PRINCIPAL BALANCES OF THE GROUP III INITIAL MORTGAGE RATE LOANS
Percentage of Group III
Mortgage Loans by
Number of Mortgage Aggregate
Range of Principal Balances ($) Loans Aggregate Principal Balance Principal Balance
------------------------------- ----- --------------------------- -----------------
15,000.01 - 25,000.00 8 196,318.30 0.50 %
25,000.01 - 50,000.00 133 5,244,653.55 13.30
50,000.01 - 75,000.00 184 11,360,648.93 28.80
75,000.01 - 100,000.00 102 8,795,757.32 22.30
100,000.01 - 125,000.00 45 5,011,194.52 12.71
125,000.01 - 150,000.00 28 3,798,132.67 9.63
150,000.01 - 175,000.00 9 1,466,374.58 3.72
175,000.01 - 200,000.00 9 1,663,913.62 4.22
200,000.01 - 225,000.00 8 1,675,496.35 4.25
225,000.01 - 250,000.00 1 229,650.47 0.58
- ---------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 49
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REMAINING TERMS TO MATURITY OF THE GROUP III INITIAL MORTGAGE RATE LOANS
Percentage of Group III
Mortgage Loans by
Number of Mortgage Aggregate
Remaining Term (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
111 - 115 1 45,494.98 0.12 %
116 - 120 3 145,135.39 0.37
166 - 170 1 91,313.04 0.23
171 - 175 86 6,223,867.01 15.78
176 49 3,690,811.22 9.36
177 46 3,499,828.23 8.87
178 89 6,836,687.19 17.33
179 82 5,942,902.99 15.07
180 1 52,000.00 0.13
231 - 235 2 231,961.21 0.59
236 - 240 6 298,969.03 0.76
346 - 350 1 55,695.01 0.14
351 - 355 36 3,200,368.41 8.11
356 30 1,575,123.21 3.99
357 26 1,892,344.62 4.80
358 39 2,968,509.40 7.53
359 29 2,691,129.37 6.82
-- ------------ ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
ORIGINAL TERMS TO MATURITY OF THE GROUP III INITIAL MORTGAGE RATE LOANS
Percentage of Group III
Mortgage Loans by
Number of Mortgage Aggregate
Original Terms (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
116 - 120 4 190,630.37 0.48 %
176 - 180 354 26,337,409.68 66.77
236 - 240 8 530,930.24 1.35
356 - 360 161 12,383,170.02 31.40
--- ------------- -----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 50
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TYPES OF MORTGAGED PROPERTIES OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage by Aggregate
Property Type Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Attached Housing 1 39,506.04 0.10 %
Condo Hi-Rise 2 127,471.44 0.32
Condo Lo-Rise 6 375,273.32 0.95
Manufactured 103 6,604,800.83 16.75
Multi Unit 24 1,941,862.77 4.92
PUD 8 1,006,257.12 2.55
PUD Regular 5 553,094.26 1.40
Single Family Residence 378 28,793,874.53 73.00
--- ------------- -----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
USE OF PROCEEDS OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group
III Mortgage Loans
Number of Mortgage by Aggregate
Use of Proceeds Loans Aggregate Principal Balance Principal Balance
--------------- ----- --------------------------- -----------------
Const-Perm 17 1,336,379.25 3.39 %
Const-Perm--- Cash Out 1 72,707.63 0.18
Const-Perm--- No Cash Out 4 287,666.14 0.73
Purchase 140 10,299,642.47 26.11
Refinance--- Cash Out 314 23,232,877.44 58.90
Refinance--- No Cash Out 51 4,212,867.38 10.68
-- ------------ -----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 51
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCCUPANCY STATUS OF THE MORTGAGED PROPERTIES OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage by Aggregate
Occupancy Status Loans Aggregate Principal Balance Principal Balance
---------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Investment Non-Owner Occupied 40 2,263,521.00 5.74 %
Investment Owner Occupied 5 317,727.52 0.81
Primary 477 36,455,092.71 92.43
Secondary 5 405,799.08 1.03
- ---------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
DOCUMENTATION TYPE OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage by Aggregate
Documentation Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
Full 415 30,965,078.94 78.51 %
Limited 30 2,206,640.94 5.59
Stated 82 6,270,420.43 15.90
-- ------------ -----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
RISK CLASSIFICATIONS OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group III
Mortgage Loans
Number of Mortgage by Aggregate
Risk Classification Loans Aggregate Principal Balance Principal Balance
------------------- ----- --------------------------- -----------------
AA 82 7,280,336.24 18.46 %
A 158 11,951,076.71 30.30
A- 131 10,077,013.55 25.55
B 87 6,140,283.29 15.57
C 56 3,342,414.12 8.47
D 13 651,016.40 1.65
-- ---------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 52
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DELINQUENCIES OF ALL THE GROUP III INITIAL MORTGAGE LOANS
Percentage of Group
III Mortgage Loans
Number of Mortgage by Aggregate
Number of Days Delinquent Loans Aggregate Principal Balance Principal Balance
------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
0 - 29 494 37,122,081.36 94.12 %
30 - 59 29 2,040,212.55 5.17
60 - 89 4 279,846.40 0.71
- ---------- ----
Totals 527 $39,442,140.31 100.00 %
=== ============== ======
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGE PROPERTIES OF THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Location Loans Aggregate Principal Balance Principal Balance
-------- ----- --------------------------- -----------------
Arizona 1 122,246.95 0.76 %
California 12 2,741,075.97 17.08
Florida 49 4,788,611.13 29.84
Georgia 3 381,853.60 2.38
Illinois 3 196,301.09 1.22
Indiana 1 47,951.33 0.30
Maryland 2 454,554.59 2.83
Michigan 6 839,058.93 5.23
Minnesota 3 190,526.83 1.19
Mississippi 3 260,431.19 1.62
Missouri 4 352,403.46 2.20
Nebraska 1 53,888.02 0.34
Nevada 4 508,783.43 3.17
New Mexico 1 59,471.86 0.37
North Carolina 12 911,928.08 5.68
Ohio 10 724,986.45 4.52
Oregon 1 219,387.82 1.37
Pennsylvania 4 277,216.56 1.73
South Carolina 7 544,427.25 3.39
Tennessee 10 681,306.92 4.25
Texas 4 862,476.01 5.37
Washington 4 790,487.12 4.93
West Virginia 1 39,894.70 0.25
- --------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 53
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOAN TO VALUE RATIOS OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans by
Range of Loan-to-Value Number of Aggregate Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
------------------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
15.01 - 20.00 1 85,178.45 0.53 %
20.01 - 25.00 1 28,741.11 0.18
25.01 - 30.00 2 63,788.91 0.40
30.01 - 35.00 1 33,945.12 0.21
35.01 - 40.00 3 113,269.98 0.71
40.01 - 45.00 1 24,957.53 0.16
50.01 - 55.00 1 29,967.54 0.19
55.01 - 60.00 3 223,752.44 1.39
60.01 - 65.00 10 584,961.29 3.64
65.01 - 70.00 9 990,358.23 6.17
70.01 - 75.00 27 2,306,436.98 14.37
75.01 - 80.00 24 2,978,711.66 18.56
80.01 - 85.00 33 4,509,036.28 28.09
85.01 - 90.00 26 3,647,984.74 22.73
90.01 - 95.00 4 428,179.03 2.67
- ---------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
MORTGAGE RATES OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage By Aggregate
Range of Mortgage Rates (%) Loans Aggregate Principal Balance Principal Balance
--------------------------- ----- --------------------------- -----------------
7.501 - 8.000 4 1,796,912.53 11.20 %
8.001 - 8.500 2 1,105,836.46 6.89
9.001 - 9.500 7 450,918.47 2.81
9.501 - 10.000 31 3,882,128.92 24.19
10.001 - 10.500 49 4,261,171.05 26.55
10.501 - 11.000 24 2,286,857.77 14.25
11.001 - 11.500 16 1,271,943.32 7.93
11.501 - 12.000 2 233,279.31 1.45
12.001 - 12.500 3 163,096.61 1.02
12.501 - 13.000 5 360,236.99 2.24
13.501 - 14.000 2 182,314.82 1.14
14.001 - 14.500 1 54,573.04 0.34
- --------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 54
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL BALANCES OF THE GROUP IV INITIAL MORTGAGE RATE LOANS
Percentage of Group IV
Mortgage Loans by
Number of Mortgage Aggregate
Range of Principal Balances ($) Loans Aggregate Principal Balance Principal Balance
------------------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
15,000.01 - 25,000.00 1 24,957.53 0.16 %
25,000.01 - 50,000.00 28 1,117,702.72 6.96
50,000.01 - 75,000.00 45 2,722,450.76 16.96
75,000.01 - 100,000.00 27 2,344,259.78 14.61
100,000.01 - 125,000.00 12 1,356,708.13 8.45
125,000.01 - 150,000.00 9 1,212,212.24 7.55
150,000.01 - 175,000.00 4 630,254.87 3.93
175,000.01 - 200,000.00 3 582,786.47 3.63
200,000.01 - 225,000.00 3 650,732.08 4.05
225,000.01 - 250,000.00 2 488,052.64 3.04
250,000.01 - 275,000.00 2 533,354.83 3.32
275,000.01 - 300,000.00 2 573,973.81 3.58
300,000.01 - 325,000.00 1 305,875.08 1.91
325,000.01 - 350,000.00 1 339,849.59 2.12
350,000.01 - 375,000.00 2 717,383.85 4.47
450,000.01 - 475,000.00 1 462,042.68 2.88
475,000.01 - 500,000.00 1 477,483.18 2.98
625,000.01 - 650,000.00 1 643,793.78 4.01
850,000.01 - 875,000.00 1 865,395.27 5.39
- ---------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 55
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REMAINING TERMS TO MATURITY OF THE GROUP IV INITIAL MORTGAGE RATE LOANS
Percentage of Group IV
Mortgage Loans by
Number of Mortgage Aggregate
Remaining Term (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
<S> <C> <C> <C> <C>
171 - 175 16 2,350,074.90 14.64 %
176 19 1,142,595.10 7.12
177 7 500,293.89 3.12
178 37 3,095,463.38 19.29
179 21 3,129,167.89 19.50
236 - 240 1 116,604.05 0.73
296 - 300 1 357,543.45 2.23
351 - 355 9 1,264,387.08 7.88
356 6 1,076,349.93 6.71
357 10 896,981.95 5.59
358 10 1,059,195.09 6.60
359 9 1,060,612.58 6.61
- ------------ ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
ORIGINAL TERMS TO MATURITY OF THE GROUP IV INITIAL MORTGAGE RATE LOANS
Percentage of Group IV
Mortgage Loans by
Number of Mortgage Aggregate
Original Terms (months) Loans Aggregate Principal Balance Principal Balance
----------------------- ----- --------------------------- -----------------
176 - 180 100 10,217,595.16 63.66 %
236 - 240 1 116,604.05 0.73
296 - 300 1 357,543.45 2.23
356 - 360 44 5,357,526.63 33.38
-- ------------ -----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 56
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TYPES OF MORTGAGED PROPERTIES OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Property Type Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Attached Housing 1 54,918.20 0.34 %
Condo Hi-Rise 1 94,424.56 0.59
Condo Lo-Rise 2 90,759.42 0.57
Manufactured 21 1,273,906.50 7.94
Multi Unit 8 640,339.34 3.99
PUD 8 642,730.65 4.00
PUD Regular 2 263,790.49 1.64
Single Family Residence 103 12,988,400.13 80.93
--- ------------- -----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
USE OF PROCEEDS OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Use of Proceeds Loans Aggregate Principal Balance Principal Balance
--------------- ----- --------------------------- -----------------
Const-Perm 4 260,844.94 1.63 %
Const-Perm--- No Cash Out 5 460,007.06 2.87
Other 1 66,945.80 0.42
Purchase 42 5,570,740.13 34.71
Refinance--- Cash Out 77 7,175,859.06 44.71
Refinance--- No Cash Out 17 2,514,872.30 15.67
-- ------------ -----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
OCCUPANCY STATUS OF THE MORTGAGED PROPERTIES OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Occupancy Status Loans Aggregate Principal Balance Principal Balance
Investment Non-Owner Occupied 19 1,435,520.87 8.94 %
Primary 127 14,613,748.42 91.06
--- -------------- ------
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
<PAGE>
MARKETING MEMORANDUM - 1/19/99 3:00 PM
NOVASTAR MORTGAGE FUNDING TRUST 1999-1 PAGE 57
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DOCUMENTATION TYPE OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Documentation Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Full 109 11,219,210.83 69.90 %
Limited 8 1,441,018.09 8.98
Stated 29 3,389,040.37 21.12
-- ------------ -----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
RISK CLASSIFICATIONS OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Risk Classification Loans Aggregate Principal Balance Principal Balance
------------------- ----- --------------------------- -----------------
AA 25 4,311,255.88 26.86 %
A 34 4,720,331.20 29.41
A- 32 2,783,925.85 17.35
B 26 2,422,570.34 15.09
C 24 1,459,058.69 9.09
D 5 352,127.33 2.19
- ---------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
DELINQUENCIES OF ALL THE GROUP IV INITIAL MORTGAGE LOANS
Percentage of Group IV
Mortgage Loans
Number of Mortgage by Aggregate
Number of Days Delinquent Loans Aggregate Principal Balance Principal Balance
------------------------- ----- --------------------------- -----------------
0 - 29 136 15,313,310.26 95.41 %
30 - 59 7 371,293.01 2.31
60 - 89 3 364,666.02 2.27
- ---------- ----
Totals 146 $16,049,269.29 100.00 %
=== ============== ======
</TABLE>
- - --------------------------------------------------------------------------------
FIRST UNION CAPITAL MARKETS
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
This document does not constitute either an offer to sell or a solicitation of
an offer to buy any of the securities described herein. Offers to sell and
solicitations of offers to buy are made only by, and this document must be read
in conjunction with, the final offering circular supplement. Information
contained herein does not purport to be complete and is subject to the same
qualifications and assumptions and should be considered by investors only in the
light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the offering circular supplement. The
descriptions of the securities have been prepared on the basis of certain
assumptions regarding payments, interest rates and other factors described in
the prospectus supplement.
