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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) March 25, 2000
Residential Asset Funding Corporation
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(Exact name of registrant as specified in its charter)
North Carolina 333-81721 56-2064715
-------------- --------- ----------
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
301 South College Street, DC-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
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(Former name or former address, if changed since last report)
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<PAGE>
Item 5. Other Events
------------
In connection with the offering of NovaStar Home Equity Loan
Asset-Backed Certificates, Series 2000-1, 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 2000-1
Registrant
By: /s/ Shanker Merchant
----------------------------
Name: Shanker Merchant
Title: Managing Director
Dated: April 5, 2000
3
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
99.1 Related Computational Materials (as defined in Item 5 above).
EXHIBIT 99.1
------------
<PAGE>
SUBJECT TO REVISION
SERIES TERM SHEET DATED MARCH 22, 2000
$226,320,000
NovaStar Mortgage, Inc.
NOVASTAR HOME EQUITY LOAN ASSET-BACKED CERTIFICATES, SERIES 2000-1
DISCLAIMER
Attached is a preliminary Series Term Sheet describing the structure, collateral
pool and certain aspects of the NovaStar Home Equity Loan Asset-Backed
Certificates, Series 2000-1. The Series Term Sheet has been prepared by NovaStar
Mortgage, Inc. for informational purposes only and is subject to modification or
change. The information and assumptions contained therein are preliminary and
will be superseded by a prospectus supplement and by any other additional
information subsequently filed with the Securities and Exchange Commission or
incorporated by reference in the Registration Statement.
First Union Securities, Inc. does not make any representation as to the accuracy
or completeness of any of the information set forth in the attached Series Term
Sheet. This cover sheet is not part of the Series Term Sheet.
A REGISTRATION STATEMENT (INCLUDING A BASE PROSPECTUS) RELATING TO THE
ASSET-BACKED CERTIFICATES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE FINAL PROSPECTUS SUPPLEMENT RELATING TO THE SECURITIES WILL BE
FILED AFTER THE SECURITIES HAVE BEEN PRICED AND ALL OF THE TERMS AND INFORMATION
ARE FINALIZED. THIS COMMUNICATION IS NOT AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES 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. INTERESTED PERSONS
ARE REFERRED TO THE FINAL PROSPECTUS AND PROSPECTUS SUPPLEMENT TO WHICH THE
SECURITIES RELATE. ANY INVESTMENT DECISION SHOULD BE BASED ONLY UPON THE
INFORMATION IN THE FINAL PROSPECTUS AND PROSPECTUS SUPPLEMENT AS OF THEIR
PUBLICATION DATES.
[FIRST UNION LOGO APPEARS HERE]
FIRST UNION SECURITIES, INC.
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 2
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SELLER/SERVICER: NovaStar Mortgage, Inc. ("NovaStar")
TRANSFEROR: NovaStar Mortgage Funding Corporation
TRUSTEE: Chase Manhattan Bank
CERTIFICATE ADMINISTRATOR: First Union National Bank
DEPOSITOR: Residential Asset Funding Corporation
UNDERWRITER: First Union Securities, Inc.
OFFERED CERTIFICATES:
<TABLE>
<CAPTION>
SECURITIES CLASS A-1 CLASS M-1 CLASS M-2 CLASS M-3
- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Amount: $216,200,000 $4,600,000 $2,760,000 $2,760,000
Security Type: Floating-rate Floating-rate Floating-rate Floating-rate
Index: 1 month LIBOR 1 month LIBOR 1 month LIBOR 1 month LIBOR
Prepayment Assumptions (PPA): 30% CPR/24% HEP 30% CPR/24% HEP 30% CPR/24% HEP 30% CPR/24% HEP
Average Life to Call: 2.901 years 4.950 years 4.943 years 4.829 years
Average Life to Maturity: 3.150 years 5.252 years 5.099 years 4.836 years
Expected Call Date: 08/25/07 08/25/07 08/25/07 08/25/07
Expected Maturity Date: 06/25/15 04/25/10 01/25/09 12/25/07
Expected Coupon: One month LIBOR + TBD One month LIBOR + TBD One month LIBOR + TBD One month LIBOR + TBD
Stated Maturity Date: July 25, 2031 July 25, 2031 July 25, 2031 July 25, 2031
Payment Date: 25th of each month 25th of each month 25th of each month 25th of each month
Payment Delay: Zero Zero Zero Zero
Settlement Date March [30], 2000 March [30], 2000 March [30], 2000 March [30], 2000
Dated Date: March [30], 2000 March [30], 2000 March [30], 2000 March [30], 2000
Day Count: Actual/360 Actual/360 Actual/360 Actual/360
Days of Accrued Interest: Zero Zero Zero Zero
First Payment Date: April 25, 2000 April 25, 2000 April 25, 2000 April 25, 2000
Ratings: (S&P/Moody's) AAA/Aaa AA/Aa2 A /A2 BBB/Baa2
CLASS A CERTFICIATES: Class A-1 Certificates
</TABLE>
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 3
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<TABLE>
<CAPTION>
<S> <C>
CLASS M CERTFICIATES: Class M-1, Class M-2 and Class M-3 Certificates
OTHER CERTIFICATES: In addition to the Offered Certificates, the Trust will also issue the Class
AIO, Class O, Class P and the Residual Certificates.
The Class P Certificates will be entitled to all prepayment penalties received
in respect of the mortgage loans and such amounts will not be available for
distribution to the holders of the Offered Certificates. The Class AIO
Certificateholders will be entitled to receive the excess interest which is the
weighted average interest due on the mortgage loans less the
Administrative Fees and the interest payable on the Offered Certificates.
The Class O is a subordinate class, and represents the Overcollateralization
Amount.
CUT-OFF DATE: March 1, 2000
EXP. PRICING DATE: March [24], 2000
THE MORTGAGE LOAN The mortgage pool will consist of conventional, monthly payment, all of
POOL: them first lien mortgage loans with terms to maturity of not more than 30
years from the date of origination or modification. The mortgage pool will
consist of both adjustable-rate mortgage loans ("ARMs") and fixed-rate
mortgage loans. The initial mortgage pool consists of approximately
56.21% ARMs and 43.79% fixed-rate mortgage loans.
.
DISTRIBUTION DATE: The 25th day of each month or if such 25th day is not a business day, the
next succeeding business day (each a "Distribution Date"), commencing on
April 25, 2000.
FINAL DISTRIBUTION DATE: The final scheduled Distribution Date for all the Certificates is July 25,
2031. It is anticipated that the actual final payment on each class will
occur significantly earlier then the indicated date.
RECORD DATE: For all the Offered Certificates, the Record Date is the last business day
prior to the Distribution Date, except that the Record Date for the first
Distribution Date is the Closing Date.
DUE PERIOD: A Due Period with respect to any Distribution Date is the period
commencing on the second day of the month preceding the month in which
such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.
PRE-FUNDING AMOUNT: On the closing date the Trust will deposit $101,715,093.81 into a pre-
funding account which will be used from time to time on or before June 29,
2000, to acquire subsequent mortgage loans.
To the extent that the Trust does not fully use amounts on deposit in the
pre-funding account to purchase additional mortgage loans by June 29,
2000, the Trust will apply the remaining amounts as a prepayment of the
principal of the Certificates on the Distribution Date on July 25, 2000.
Although no assurance is possible, we do not anticipate that a material
amount of principal will be prepaid on the Certificates from amounts in the
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 4
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pre-funding account.
ERISA: The Class A-1 Certificates may be purchased by plans after the pre-funding
has been completed, provided that certain conditions are satisfied. A
fiduciary of any ERISA plan that is considering a purchase of Certificates
should, among other things, consult with experienced legal counsel in
determining whether all required conditions for purchase have been
satisfied.
The Class M Certificates may not be acquired by or on behalf of an ERISA
plan except as described in the prospectus supplement. Each investor in a
Class M Certificate purchased in book-entry form will be deemed to
represent that it complies with the restrictions described under
"Considerations for Benefit Plan Investors" in this prospectus supplement.
SMMEA: The Class A-1 and Class M-1 Certificates will constitute "mortgage related
securities" for purposes of SMMEA, for so long as they are rated in at least
the second highest rating category by one or more nationally recognized
statistical rating agencies. Institutions whose investment activities are
subject to legal investment laws and regulations or to review by certain
regulatory authorities may be subject to restrictions on investment in the
Certificates.
TAX STATUS: The Trust will elect to be treated as one or more Real Estate Mortgage
Investment Conduits ("REMIC"s) for federal income tax purposes. The
Offered Certificates will be designated as "regular interests" in a REMIC.
Certificateholders will include interest on the Certificates in income in
accordance with an accrual method of accounting.
CLEAN-UP CALL: The Servicer has a clean-up call which, if exercised, would result in early
redemption of the Certificates, on any Distribution Date after the aggregate
principal balance of the mortgage loans has declined to 10% or less of the
sum of the principal balance of the initial mortgage loans plus the principal
balance of each subsequent mortgage loan acquired through the pre-funding feature.
BOOK ENTRY FORMAT: The Certificates will be issued, maintained and transferred on the book-
entry records of the Depository Trust Company. The Certificates will be
offered in registered form, in minimum denominations of $25,000 and
integral multiples of $1,000 in excess thereof.
EXPECTED PRICING With respect to the adjustable-rate mortgage loans, the prepayment model
SPEED: assumes a constant CPR of 30% (such model, a "prepayment assumption").
With respect to the fixed-rate mortgage loans, the prepayment model
assumes a constant CPR of 2.4% in the first month of the life of the Fixed-
rate mortgage loans and an additional 2.4% per annum in each month
thereafter until the tenth month. Beginning in the tenth month and in each
month thereafter, the prepayment model assumes a CPR of 24% (such
model, also a "prepayment assumption").
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 5
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STRUCTURE
THE TRUST: The Certificates will be backed by the Trust estate created by the pooling
and servicing agreement, which consists primarily of the following:
o The mortgage loans;
o Collections in respect of principal and interest of the mortgage loans
received after the Cut-off Date (other than payments due on or
before the Cut-off Date);
o The amounts on deposit in the collection account, including the
payment account in which amounts are deposited prior to payment
to the Certificateholders, including net investment earnings;
o Mortgage insurance policies and certain other insurance policies
maintained by the mortgagors or by or on behalf of the Servicer or
any sub-servicer;
o An assignment of the seller's rights under the purchase agreement;
o Amounts on deposit in the interest coverage account and the pre-
funding account;
o An assignment of the seller's rights under the converted loan
purchase agreement; and
o Proceeds , if any, from the interest rate cap agreements.
AVAILABLE FUNDS: The Available Funds for each Distribution Date will equal the amount
received by the Trustee and available in the payment account on that
Distribution Date. The Available Funds will generally be equal to the sum
of, net of Administrative Fees and amounts reimbursable to the Servicer,
the following amounts:
o The aggregate amount of scheduled payments on the mortgage loans
due on the prior Due Date and received on or prior to the
Determination Date,
o Investment earnings on amounts in the payment account, plus
miscellaneous fees and collections, including assumption fees and
prepayment penalties, but excluding late fees,
o Any unscheduled payments and receipts, including mortgagor
prepayments on the mortgage loans, received during the prior
prepayment period and proceeds of repurchases, and adjustments
in the case of substitutions and terminations, net liquidation
proceeds, insurance proceeds, proceeds from any mortgage
insurance policy and proceeds from the sale of converted mortgage
loans,
o All advances made for that Distribution Date. In addition, on the
Distribution Date which follows the termination of the pre-funding
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 6
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period, Available Funds will include the remaining amount on deposit in the pre-funding
account at that time. During the pre- funding period, Available Funds will also include the
withdrawn amount from the interest coverage account, and
o Amounts on deposit in the supplemental interest account from interest rate cap
agreements.
INTEREST: On each Distribution Date, the holders of each class of Certificates will be entitled to
receive an interest payment amount equal to interest accrued on the related Certificate
principal balance immediately prior to such Distribution Date at the related pass-through
rate for the related accrual period.
The pass-through rate for each class and Distribution Date is the lesser of (1) the formula
rate for that class and Distribution Date and (2) the Available Funds Cap Rate for that
Distribution Date.
The formula rate for each class is as follows:
Prior to the Rate Step Up Date
Class Rate
A-1 LIBOR plus %
M-1 LIBOR plus %
M-2 LIBOR plus %
M-3 LIBOR plus %
On or after the Rate Step Up Date
Class Rate
A-1 LIBOR plus %
M-1 LIBOR plus %
M-2 LIBOR plus %
M-3 LIBOR plus %
The "Rate Step Up Date" is the first Distribution Date to occur after the Clean-up Call
Date. If the Clean-Up Call is not exercised, the margin on the Class A-1 Certificates will
increase to 2x the Class A-1 margin, and the margin on the Class M-1, M-2, and M-3
Certificates will increase to 1.5x their related margins.
AVAILABLE FUNDS CAP
RATE: The "available funds cap rate" for each Distribution Date is the percentage equivalent of a
fraction, the numerator of which is equal to the Interest Remittance Formula Amount plus any
Supplemental Interest Payment, less the Administrative Fees for that Distribution Date, and
the denominator of which is equal to the product of (1) the number of days in the current
month divided by 360 and (2) the aggregate Certificate principal balance of the Offered
Certificates immediately prior to that Distribution Date.
With respect to each Class and any Distribution Date, to the extent that the amount of
interest paid to a class is reduced because the formula rate exceeds the Available Funds Cap
Rate (such excess amount, the related
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 7
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"Available Funds Cap Carry-Forward Amount"), such amount will be carried forward and
distributed to the holders of that Class, together with interest on that amount at the
related formula rate applicable from time to time.
Interest on the Certificates will accrue during each accrual period. The accrual period is
the period from the prior Distribution Date through and including the day preceding the
related Distribution Date. In the case of the first Distribution Date, interest begins to
accrue on the closing date. Interest will accrue on the basis of the actual number of days
in the accrual period and a 360 day year.
ADMINISTRATIVE FEES: Mortgage insurance fees, trustee fees and servicing fees.
SERVICING FEE: 50 basis points per annum
INTEREST REMITTANCE AMOUNT: For any Distribution Date, that portion of the Available Funds for that Distribution Date
allocable to interest.
INTEREST REMITTANCE
FORMULA AMOUNT: For any Distribution Date, is an amount equal to (1) the product of (x) 1/12 of the weighted
average coupon rate of the mortgage loan pool as of the beginning of the prior due period
and (y) the aggregate principal balances of the mortgage loans as of the beginning of the
prior due period minus (2) the aggregate amount of Relief Act shortfalls and prepayment
interest shortfalls for the prior period.
INTEREST ALLOCATION: On each Distribution Date the Trustee will first distribute the prepayment penalties
collected during the prior prepayment period to the holders of the Class P
Certificates. After making that distribution, the trustee will apply that portion of
the available funds which represents the Interest Remittance Amount for that
Distribution Date, to the payment of any Administrative Fees of the Trust which are due
on that Distribution Date, and will then apply the remaining Interest Remittance Amount
to the payment of interest then due on the Certificates in the following order of
priority:
(i) First, to the holders of the Class AIO Certificates and the holders of the Class
A-1 Certificates, the Class AIO Monthly Interest Distributable Amount and the
Class A-1 Monthly Interest Distributable Amount; these payments are of equal
priority to those two classes, and, in the event that the remaining Interest
Remittance Formula Amount is insufficient to pay both classes the full amount due,
the amount paid to the holders of each of these two classes will be a pro rata
portion of the remaining Interest Remittance Formula Amount, with the allocation
based on the relative proportions of the Class AIO Monthly Interest Distributable
Amount and the Class A-1 Monthly Interest Distributable Amount;
(ii) Second, to the holders of the Class M-1 Certificates, the
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 8
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Monthly Interest Distributable Amount for Class M-1;
(iii) Third, to the holders of the Class M-2 Certificates, the Monthly Interest
Distributable Amount for Class M-2;
(iv) Fourth, to the holders of the Class M-3 Certificates, the Monthly Interest
Distributable Amount for Class M-3; and
(v) Fifth, to the holders of each class of offered certificates, the Available Funds
Cap Carry-Forward Amount for that class, such amount to be paid in the following
order of priority: Class A-1, Class M-1, Class M-2 and Class M-3; and
(vi) Sixth, to the holders of the Class RESIDUAL Certificates, any remainder.
On any Distribution Date, any shortfalls resulting from the application of the Civil Relief
Act and any prepayment interest shortfalls to the extent not covered by compensating
interest paid by the servicer will be applied to reduce the Monthly Interest Distributable
Amounts with respect to the Class A-1, Class M-1, Class M-2, Class M-3 and Class AIO
Certificates on a pro rata basis, based on the respective amounts of interest accrued on
such Certificates for such Distribution Date. The holders of the Certificates will not be
entitled to reimbursement for any such interest shortfalls.
MONTHLY INTEREST DISTRIBUTABLE
AMOUNT: The Monthly Interest Distributable Amount on any Distribution Date and for each class of
Offered Certificates equals the amount of interest accrued during the related accrual period
at the related formula rate on the Certificate Principal Balance of such class immediately
prior to such Distribution Date plus the Unpaid Interest Shortfall Amount for that class and
distribution date.
UNPAID INTEREST
SHORTFALL: The Unpaid Interest Shortfall Amount means (i) for each class of Offered Certificates (and
the Class AIO Certificates), and the first Distribution Date, zero, and (ii) with respect to
each class of Offered Certificates and any Distribution Date after the first Distribution
Date, the amount, if any, by which (a) the Monthly Interest Distributable Amount for such
class for the immediately preceding Distribution Date exceeds (b) the aggregate amount
distributed on such class in respect of interest pursuant to clause (a) of this definition
on such preceding Distribution Date, plus interest on that amount to the extent permitted by
law, at the pass-through rate for such class for the related accrual period.
SUPPLEMENTAL INTEREST
PAYMENTS: The holders of the Offered Certificates may be entitled to Supplemental Interest Payments.
Supplemental Interest Payments are amounts which will be paid to the holders of the Offered
Certificates if their formula rate was limited by the Available Funds Cap Rate, but only to
the limited extent that moneys are then available under certain cap agreements held
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 9
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by the Trustee.
The payments under the Cap Agreements ("Cap Payments") will be deposited into the
supplemental interest account held by the trustee. Amounts on deposit in the supplemental
interest account will also be used to fund the Available Funds Cap Carry-Forward Amounts.
The Cap Agreements pay quarterly, have varying tenors through February 2003.
In each month in which Cap Payments are received, one-third of the amount received will be
available to increase the available funds cap rate (and, as a second priority, to fund any
Available Funds Cap Carry-Forward Amount) on each of the next three distribution dates. To
the extent these moneys are not needed for a distribution date, they will be retained by the
trustee and added to the one-third figure otherwise available on the next distribution date.
If, however, these amounts have not been applied by the close of the third distribution date
following receipt, they will be paid to the holders of the Class AIO Certificates.
PRINCIPAL: On each Distribution Date, the Certificateholders are scheduled to receive an amount of
principal generally equal to the sum of:
o The scheduled principal on the mortgage loans collected or advanced during the
prior period; and
o Unscheduled principal on the mortgage loans collected during the prior prepayment
period.
The Class M Certificates are unlikely to receive any principal payments until, at the
earliest, the Distribution Date occurring on April 25, 2003.
The principal will be distributed to the Certificateholders of each class in accordance with
a payment priority, which is designed to maintain a specified level of support below each
class. This support consists of the Certificates that are more subordinated to that class,
as well as the Overcollateralization, which is subordinated to all classes of the Offered
Certificates.
PRINCIPAL ALLOCATION: On each Distribution Date (a) prior to the Crossover Date or (b) on which a Trigger Event
is in effect, the holders of each class of Certificates shall be entitled to receive
distributions in respect of principal to the extent of the Principal Distribution Amount in
the following amounts and order of priority:
(i) First, to the holders of the Class A-1 Certificates, the entire amount of
the Principal Distribution Amount, until the Certificate Principal Balance
of the Class A-1 Certificates has been reduced to zero;
(ii) Second, to the holders of the Class M-1 Certificates, the entire amount of
the Principal Distribution Amount until the Certificate principal balance
of the Class M-1 Certificates has been reduced to zero;
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FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 10
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(iii) Third, to the holders of Class M-2 Certificates, the entire amount of the
Principal Distribution Amount until the Certificate Principal Balance of
the Class M-2 Certificates has been reduced to zero;
(iv) Fourth, to the holders of the Class M-3 Certificates, the entire amount of
the Principal Distribution Amount until the Certificate Principal Balance
of the Class M-3 Certificates has been reduced to zero; and
(v) Fifth, to the holders of the Class O Certificates, any remainder.
On each Distribution Date (a) on or after the Crossover Date and (b) on which a Trigger
Event is not in effect, the holders of each class of Certificates shall be entitled to
receive distributions in respect of principal to the extent of the Principal Distribution
Amount in the following amounts and order of priority:
(i) First, to the holders of the Class A-1 Certificates, the Class A-1
Principal Distribution Amount, until the Certificate Principal Balance of
the A-1 Certificates has been reduced to zero;
(ii) Second, to the holders of the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-1 Certificates has been reduced to zero;
(iii) Third, to the holders of the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-2 Certificates has been reduced to zero;
(iv) Fourth, to the holders of the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-3 Certificates has been reduced to zero; and
(v) Fifth, to the holders of the Class O Certificates, any remainder.
The allocation of principal with respect to the Class A-1 Certificates on each Distribution
Date prior to the Crossover Date or on which a Trigger Event has occurred will have the
effect of accelerating the amortization of the Class A-1 Certificates while, in the absence
of realized losses, increasing the relative proportion of the Trust's assets represented by
the Class M Certificates. Increasing the relative proportion of the Trust's assets in the
Class M Certificates relative to that of the Class A-1 Certificates is intended to preserve
the availability of the subordination provided by the Class M Certificates.
PRINCIPAL DISTIBUTION The Principal Distribution Amount means with respect to any
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 11
- --------------------------------------------------------------------------------
AMOUNT: Distribution Date the Principal Remittance Amount for such Distribution Date (for further
detail see the Prospectus Supplement).
PRINCIPAL REMITTANCE AMOUNT: The Principal Remittance Amount means with respect to any Distribution Date, the sum of
(i) all scheduled payments of principal collected or advanced on the mortgage loans by
the Servicer that were due during the related due period, (ii) the principal portion of
all partial and full principal prepayments of the mortgage loans applied by the Servicer
during such prepayment period, (iii) the principal portion of all related net
liquidation proceeds and insurance proceeds received during such prepayment period, (iv)
that portion of the purchase price, representing principal of any repurchased mortgage
loan, deposited to the collection account during such prepayment period, (v) the
principal portion of any related substitution adjustments deposited in the collection
account during such prepayment period, (vi) in the case of the Distribution Date
immediately following the end of the funding period, any amount remaining in the
pre-funding account and not used by the Trustee to purchase subsequent mortgage loans
and (vii) on the Distribution Date on which the Trust is to be terminated that portion
of the termination price relating to principal.
CROSSOVER DATE: The Crossover Date means the later to occur of (x) the Distribution Date occurring in
the 37th period and (y) the first Distribution Date on which the Credit Enhancement
Percentage for the Class A certificates (calculated for this purpose only after taking into
account distributions of principal on the mortgage but prior to distribution of the
Principal Distribution Amount to the Certificates) is greater than or equal to 12%.
TRIGGER EVENT: A Trigger Event is in effect with respect to any Distribution Date if the three-month
rolling average of mortgage loans delinquent 60 days or more exceeds 12% of the remaining
pool balance.
CREDIT ENHANCEMENT: The credit enhancement is provided by subordinated classes, overcollateralization, and
Mortgage Insurance.
SUBORDINATION
The rights of the holders of the Class M Certificates to receive distributions will be
subordinated, to the extent described herein, to the rights of the holders of the Class A-1
Certificates.
In addition, the rights of the holders of Class M Certificates with higher numerical class
designations will be subordinated to the rights of holders of Mezzanine Certificates with
lower numerical class designations.
Subordination is intended to enhance the likelihood of regular distributions on the more
senior Certificates and to afford those Certificates protection against losses.
OVERCOLLATERALIZATION
The Trust will have an initial level of Overcollateralization Amount of approximately 1.6%.
The Overcollateralization is available for the benefit of all classes of Certificates.
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 12
- --------------------------------------------------------------------------------
MORTGAGE INSURANCE
NovaStar has acquired on behalf of the Trust loan-level mortgage insurance policies for
approximately 98.44% of the mortgage loans with an LTV in excess of 50%. Mortgage loans with
an aggregate balance of $2,251,268.41 have an LTV less than or equal to 50% and are thus not
insured by the mortgage insurance policies. The terms and conditions of the mortgage
insurance policies are further discussed below.
ALLOCATION OF LOSSES: Any realized losses on the mortgage loans will be allocated first to the
Overcollateralization Amount, which is represented by the Class O Certificates, second, to
the Class M-3 Certificates, third, to the Class M-2 Certificates, and fourth, to the Class
M-1 Certificates.
The Pooling and Servicing Agreement does not permit the allocation of realized losses to the
Class A-1, Class AIO, or Class P Certificates. Investors in the Class A-1 Certificates
should note that although realized losses cannot be allocated to the Class A-1 Certificates,
under certain loss scenarios there will not be enough principal and interest on the mortgage
loans to pay TO the Class A-1 Certificates all interest and principal amounts to which they
are then entitled.
Once realized losses have been allocated to the Mezzanine Certificates, such amounts with
respect to such Certificates will no longer accrue interest nor will such amounts thereafter
be reinstated.
Any allocation of a realized loss to a class of Certificates will be made by reducing that
CLASS OF CertificateS' principal balance by the amount allocated to that class as of the
Distribution Date in the month following the calendar month in which the realized loss was
incurred.
MORTGAGE INSURANCE
POLICIES: Approximately 96.71% of the mortgage loans are covered by mortgage insurance policies
primarily from PMI Mortgage Insurance Co. with a smaller number insured by Radian Guaranty,
Inc. (the "MI Insurers"). The remainder of the initial mortgage loans will not be covered by
a mortgage insurance policy. Each mortgage insurance policy insures losses on the Principal
Balance of each such mortgage loan in an amount generally equal to, at the option of the MI
InsurerS, either
o 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
o An amount equal to the product of (i) the Loss Amount and (ii) the percentage of
coverage (the "Coverage Percentage") specified in the mortgage insurance policy, in
which case the issuer would retain title to (and the proceeds obtained in a
foreclosure and sale of) the mortgaged property.
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 13
- --------------------------------------------------------------------------------
The minimum Coverage Percentage specified in each mortgage insurance 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). Each mortgage insurance policy will remain in place for the life of
the related mortgage loan.
Claim payments, if any, under a mortgage insurance 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 mortgage insurance 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: 40.09% of the mortgage loans are, at the borrower's option, subject to conversion during
a certain period into fixed-rate loans at a rate not to exceed 600 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 FEATURE:
In the event of a conversion of a mortgage 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 mortgage loan from the pool at the outstanding principal balance of the
mortgage loan. That is, the converted loans will be bought out of, and thus removed from,
the pool after the conversion, causing a prepayment of the pool. The purchase obligation of
NovaStar Capital, Inc. will be fully guaranteed by NovaStar Financial, Inc., a publicly-held
company.
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 14
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE LIFE (WAL) AND
PAYMENT WINDOWS TABLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TO CALL (10%)
PPA* 0% 50% 75% 100% 125% 150%
CLASS A1 BOND
WAL 18.874 5.722 3.890 2.901 2.274 1.845
FIRST PAY 4/25/00 4/25/00 4/25/00 4/25/00 4/25/00 4/25/00
LAST PAY 11/25/28 10/25/14 3/25/10 8/25/07 12/25/05 11/25/04
CLASS M1 BOND
WAL 25.529 9.696 6.570 4.950 4.108 3.686
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 5/25/03 6/25/03
LAST PAY 11/15/28 10/25/14 3/25/10 8/25/07 12/25/05 11/25/04
CLASS M2 BOND
WAL 25.529 9.696 6.570 4.943 4.091 3.634
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 5/25/03 5/25/03
LAST PAY 11/15/28 10/25/14 3/25/10 8/25/07 12/25/05 11/25/04
CLASS M3 BOND
WAL 25.472 9.486 6.416 4.829 3.979 3.535
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 4/25/03 4/25/03
LAST PAY 11/15/28 10/25/14 3/25/10 8/25/07 12/25/05 11/25/04
TO MATURITY
PPA* 0% 50% 75% 100% 125% 150%
CLASS A1 BOND
WAL 18.942 5.976 4.178 3.150 2.478 2.009
FIRST PAY 4/25/00 4/25/00 4/25/00 4/25/00 4/25/00 4/25/00
LAST PAY 5/25/30 2/25/26 7/25/19 6/25/15 4/25/13 10/25/10
CLASS M1 BOND
WAL 25.641 9.864 6.967 5.252 4.355 3.883
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 5/25/03 6/25/03
LAST PAY 9/25/29 1/25/17 9/25/13 4/25/10 2/25/08 8/25/06
CLASS M2 BOND
WAL 25.600 9.767 6.775 5.099 4.222 3.738
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 5/25/03 5/25/03
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 15
- --------------------------------------------------------------------------------
LAST PAY 6/25/29 6/25/15 2/25/12 1/25/09 2/25/07 10/25/05
CLASS M3 BOND
WAL 25.478 9.493 6.426 4.836 3.988 3.541
FIRST PAY 4/25/19 12/25/04 5/25/03 4/25/03 4/25/03 4/25/03
LAST PAY 1/25/29 12/25/14 8/25/10 12/25/07 4/25/06 2/25/05
</TABLE>
*100 PERCENT PREPAYMENT ASSUMPTION (PPA) REPRESENTS 30% CPR FOR THE ARM
COLLATERAL, AND 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 FOR THE FIXED COLLATERAL .
AVAILABLE FUNDS CAP RATE*
<TABLE>
<CAPTION>
To Call @ 10%
Period Date AFC Rate Period Date AFC Rate Period Date AFC Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 3/30/00 35 2/25/03 9.63% 69 12/25/05 9.85%
1 4/25/00 10.42% 36 3/25/03 10.67% 70 1/25/06 9.53%
2 5/25/00 9.07% 37 4/25/03 9.64% 71 2/25/06 9.53%
3 6/25/00 8.79% 38 5/25/03 9.89% 72 3/25/06 10.54%
4 7/25/00 9.08% 39 6/25/03 9.56% 73 4/25/06 9.52%
5 8/25/00 8.80% 40 7/25/03 9.93% 74 5/25/06 9.85%
6 9/25/00 8.81% 41 8/25/03 9.61% 75 6/25/06 9.54%
7 10/25/00 9.11% 42 9/25/03 9.61% 76 7/25/06 9.86%
8 11/25/00 8.83% 43 10/25/03 9.92% 77 8/25/06 9.55%
9 12/25/00 9.13% 44 11/25/03 9.60% 78 9/25/06 9.56%
10 1/25/01 8.86% 45 12/25/03 9.92% 79 10/25/06 9.88%
11 2/25/01 8.87% 46 1/25/04 9.60% 80 11/25/06 9.57%
12 3/25/01 9.80% 47 2/25/04 9.59% 81 12/25/06 9.90%
13 4/25/01 8.90% 48 3/25/04 10.25% 82 1/25/07 9.59%
14 5/25/01 9.20% 49 4/25/04 9.59% 83 2/25/07 9.60%
15 6/25/01 8.92% 50 5/25/04 9.90% 84 3/25/07 10.63%
16 7/25/01 9.22% 51 6/25/04 9.58% 85 4/25/07 9.61%
17 8/25/01 8.66% 52 7/25/04 9.90% 86 5/25/07 9.94%
18 9/25/01 8.67% 53 8/25/04 9.58% 87 6/25/07 9.63%
19 10/25/01 8.96% 54 9/25/04 9.57% 88 7/25/07 9.96%
20 11/25/01 8.68% 55 10/25/04 9.89% 89 8/25/07 9.65%
21 12/25/01 8.98% 56 11/25/04 9.57%
22 1/25/02 8.62% 57 12/25/04 9.88%
23 2/25/02 9.10% 58 1/25/05 9.56%
24 3/25/02 10.08% 59 2/25/05 9.56%
25 4/25/02 9.11% 60 3/25/05 10.58%
26 5/25/02 9.42% 61 4/25/05 9.55%
27 6/25/02 9.12% 62 5/25/05 9.87%
28 7/25/02 9.84% 63 6/25/05 9.55%
29 8/25/02 9.53% 64 7/25/05 9.87%
30 9/25/02 9.54% 65 8/25/05 9.54%
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 16
- --------------------------------------------------------------------------------
31 10/25/02 9.86% 66 9/25/05 9.54%
32 11/25/02 9.55% 67 10/25/05 9.86%
33 12/25/02 9.87% 68 11/25/05 9.54%
34 1/25/03 9.56%
</TABLE>
*Derived assuming indices remains constant at 6.21%, 6.4113%, and 6.20% for 3
month Libor, 6 Month Libor, and One Year CMT, respectively, using 100% of the
PPA.
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 17
- --------------------------------------------------------------------------------
AVAILABLE FUNDS CAP RATE-100 BASIS POINTS INCREASE IN INDICES*
To Call @ 10%
<TABLE>
<CAPTION>
Period Date AFC Rate Period Date AFC Rate Period Date AFC Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 3/30/00 35 2/25/03 10.35% 69 12/25/05 10.30%
1 4/25/00 11.19% 36 3/25/03 11.18% 70 1/25/06 9.96%
2 5/25/00 9.85% 37 4/25/03 10.10% 71 2/25/06 9.96%
3 6/25/00 9.58% 38 5/25/03 10.36% 72 3/25/06 11.02%
4 7/25/00 9.88% 39 6/25/03 10.02% 73 4/25/06 9.95%
5 8/25/00 9.62% 40 7/25/03 10.43% 74 5/25/06 10.29%
6 9/25/00 9.65% 41 8/25/03 10.08% 75 6/25/06 9.96%
7 10/25/00 9.96% 42 9/25/03 10.08% 76 7/25/06 10.30%
8 11/25/00 9.71% 43 10/25/03 10.41% 77 8/25/06 9.98%
9 12/25/00 10.03% 44 11/25/03 10.07% 78 9/25/06 9.98%
10 1/25/01 9.78% 45 12/25/03 10.40% 79 10/25/06 10.32%
11 2/25/01 9.82% 46 1/25/04 10.07% 80 11/25/06 9.99%
12 3/25/01 10.77% 47 2/25/04 10.06% 81 12/25/06 10.33%
13 4/25/01 9.89% 48 3/25/04 10.75% 82 1/25/07 10.01%
14 5/25/01 10.22% 49 4/25/04 10.05% 83 2/25/07 10.02%
15 6/25/01 9.98% 50 5/25/04 10.38% 84 3/25/07 11.10%
16 7/25/01 10.31% 51 6/25/04 10.04% 85 4/25/07 10.03%
17 8/25/01 9.14% 52 7/25/04 10.37% 86 5/25/07 10.38%
18 9/25/01 9.16% 53 8/25/04 10.03% 87 6/25/07 10.05%
19 10/25/01 9.47% 54 9/25/04 10.03% 88 7/25/07 10.39%
20 11/25/01 9.20% 55 10/25/04 10.36% 89 8/25/07 10.07%
21 12/25/01 9.51% 56 11/25/04 10.02%
22 1/25/02 8.81% 57 12/25/04 10.35%
23 2/25/02 9.52% 58 1/25/05 10.01%
24 3/25/02 10.53% 59 2/25/05 10.01%
25 4/25/02 9.54% 60 3/25/05 11.08%
26 5/25/02 9.87% 61 4/25/05 10.00%
27 6/25/02 9.57% 62 5/25/05 10.33%
28 7/25/02 10.51% 63 6/25/05 9.99%
29 8/25/02 10.19% 64 7/25/05 10.32%
30 9/25/02 10.20% 65 8/25/05 9.99%
31 10/25/02 10.54% 66 9/25/05 9.98%
32 11/25/02 10.22% 67 10/25/05 10.31%
33 12/25/02 10.57% 68 11/25/05 9.97%
34 1/25/03 10.25%
</TABLE>
*Derived assuming indices increase 100 basis points to 7.21%, 7.4113%, and 7.20%
for 3 month Libor, 6 Month Libor, and One Year CMT, respectively, using 100% of
the PPA.
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 18
- --------------------------------------------------------------------------------
Total Pool
<TABLE>
<S> <C>
Number of Loans: 1,180
Percentage of Fixed-Rate Loans (By number of loans) 50.17%
Percentage of Adjustable-Rate Loans (By number of loans) 49.83%
Percentage of all Mortgage Loans (By number of loans) 100.00%
Aggregate Principal Balance $ 128,284,906.19
Percentage of Fixed-Rate Loans (By principal balance) 43.79%
Percentage of Adjustable-Rate Loans (By principal balance) 56.21%
Percentage of all Loans (by number of loans) 100.00%
Principal Balance as of the Cut-Off Date:
Average: $ 108,716.02
Range: $ 24,710.23 - $ 757,993.99
Coupon Rates:
Weighted Average: 10.036%
Range: 7.500% - 13.125%
Weighted Average Original Term to Maturity (months): 302
Remaining Term to Maturity (months):
Weighted Average: 300
Range: 115 - 360
Loan-to-Value Ratio at Origination:
Weighted Average: 80.71%
Range: 17.65% - 100.00%
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 19
- --------------------------------------------------------------------------------
GEOGRAPHIC DISTRIBUTION OF THE MORTGAGED PROPERTIES OF ALL
INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Loans
Number of Mortgage by Aggregate
Location Loans Aggregate Principal Balance Principal Balance
-------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Alaska 1 $ 76,465.24 0.06 %
Arizona 64 7,530,883.00 5.87
Arkansas 11 871,938.16 0.68
California 66 13,923,674.59 10.85
Colorado 28 4,432,738.80 3.46
Connecticut 5 590,939.23 0.46
Delaware 1 102,700.00 0.08
District of Columbia 1 212,000.00 0.17
Florida 198 18,827,943.75 14.68
Georgia 25 3,346,797.56 2.61
Hawaii 1 432,855.26 0.34
Idaho 6 676,593.71 0.53
Illinois 24 2,084,721.67 1.63
Indiana 25 1,538,466.65 1.20
Kansas 10 846,971.82 0.66
Kentucky 49 5,384,932.60 4.20
Maine 1 59,600.00 0.05
Maryland 5 611,407.45 0.48
Massachusetts 5 490,847.94 0.38
Michigan 132 11,089,919.82 8.64
Minnesota 8 1,382,727.75 1.08
Mississippi 11 552,218.90 0.43
Missouri 40 3,762,514.12 2.93
Montana 2 156,009.88 0.12
Nebraska 1 183,476.70 0.14
Nevada 47 6,930,036.17 5.40
New Hampshire 1 113,804.76 0.09
New Jersey 2 484,693.74 0.38
New Mexico 3 310,024.48 0.24
New York 1 552,862.18 0.43
North Carolina 14 944,410.08 0.74
Ohio 92 8,121,150.71 6.33
Oklahoma 10 614,664.07 0.48
Oregon 16 2,366,164.71 1.84
Pennsylvania 57 4,377,733.26 3.41
Rhode Island 3 162,380.06 0.13
South Carolina 7 649,996.57 0.51
Tennessee 94 8,608,659.18 6.71
Texas 19 2,344,059.11 1.83
Utah 21 3,762,739.75 2.93
Virginia 24 2,268,980.65 1.77
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 20
- --------------------------------------------------------------------------------
Washington 42 5,966,700.85 4.65
West Virginia 4 309,836.94 0.24
Wyoming 3 226,664.32 0.18
---------- ----
Totals 1,180 $128,284,906.19 100.00 %
</TABLE>
TYPES OF MORTGAGED PROPERTIES OF ALL INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Loans
Number of Mortgage by Aggregate
Property Type Loans Aggregate Principal Balance Principal Balance
------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Condo Hi-Rise 20 $ 2,027,631.76 1.58 %
Condo Low-Rise 45 3,960,830.93 3.09
Manufactured 25 1,807,860.32 1.41
Multi-Unit 78 7,165,310.95 5.59
Pud 123 18,409,103.80 14.35
Single Family Residence 889 94,914,168.43 73.99
--- ------------- -----
Totals 1180 $ 128,284,906.19 100.00 %
</TABLE>
USE OF PROCEEDS OF ALL INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Number of Aggregate Loans by Aggregate
Use of Proceeds Mortgage Loans Principal Balance Principal Balance
--------------- -------------- ----------------- --------------------
<S> <C> <C> <C>
Construction/Permit 3 $ 347,019.06 0.27
Purchase 463 53,378,559.34 41.61 %
Refinance 714 74,559,327.79 58.12
--- ------------- -----
Totals 1,180 $128,284,906.19 100.00 %
</TABLE>
OCCUPANCY TYPE OF THE MORTGAGED PROPERTIES OF ALL INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Loans
Number of Mortgage by Aggregate
Occupancy Type Loans Aggregate Principal Balance Principal Balance
-------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
Investment Non-Owner Occupied 200 $14,768,190.59 11.51 %
Investment Owner Occupied 3 207,830.60 0.16
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 21
- --------------------------------------------------------------------------------
Primary 923 107,779,883.05 84.02
Second Home 54 5,529,001.95 4.31
---- ------------ ----
Totals 1,180 $128,284,906.19 100.00 %
</TABLE>
DOCUMENTATION TYPE OF ALL INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Loans
Number of Mortgage by Aggregate
Documentation Type Loans Aggregate Principal Balance Principal Balance
- ------------------ ----- --------------------------- -----------------
<S> <C> <C> <C>
Full 732 $72,219,129.31 56.30 %
Limited 72 10,199,325.58 7.95
Stated 376 45,866,451.30 35.75
--- ------------- -----
Totals 1,180 $128,284,906.19 100.00 %
</TABLE>
RISK CLASSIFICATIONS OF ALL INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage All Mortgage
Loans
Number of Mortgage by Aggregate
Risk Classification Loans Aggregate Principal Balance Principal Balance
- ------------------- ----- --------------------------- -----------------
<S> <C> <C> <C>
AAA 437 $49,425,527.53 38.53 %
AA 265 32,583,143.69 25.40
A 215 20,802,110.14 16.22
A- 134 13,933,902.79 10.86
B 78 7,431,455.57 5.79
C 47 3,774,137.64 2.94
C- 4 334,628.83 0.26
----- --------------- ----
Totals 1,180 $128,284,906.19 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 22
- --------------------------------------------------------------------------------
Fixed-Rate Initial Mortgage Loans
<TABLE>
<CAPTION>
<S> <C>
Number of Fixed-Rate Mortgage Loans: 592
Aggregate Principal Balance: $56,181,064.38
Principal Balance as of the Cut-Off Date:
Average: $ 94,900.45
Range: $ 24,710.23 - $ 552,862.18
Coupon Rates:
Weighted Average: 10.052%
Range: 7.625% - 13.125%
Weighted Average Original Term to Maturity (months): 228
Remaining Term to Maturity (months):
Weighted Average: 225
Range: 115 - 360
Loan-to-Value Ratio at Origination:
Weighted Average: 79.15%
Range: 17.65% - 100.00%
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 23
- --------------------------------------------------------------------------------
FIXED-RATE INITIAL MORTGAGE LOAN TYPE
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Number of Aggregate Loans by Aggregate
Loan Type Mortgage Loans Principal Balance Principal Balance
--------- -------------- ----------------- -----------------
<S> <C> <C> <C>
15 Year Balloon 323 $34,498,971.38 61.41 %
10 Year Fixed-Rate 4 217,097.14 0.39
15 Year Fixed-Rate 87 5,884,056.32 10.47
20 Year Fixed-Rate 16 978,056.62 1.74
25 Year Fixed-Rate 1 42,962.44 0.08
30 Year Fixed-Rate 161 14,559,920.48 25.92
--- -------------- ------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
ORIGINAL LOAN-TO-VALUE RATIOS OF THE FIXED-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Range of Loan-to-Value Number of Aggregate Loans by Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
------------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
15.01 - 20.00 1 $ 29,078.53 0.05 %
20.01 - 25.00 2 53,937.22 0.10
25.01 - 30.00 1 31,858.47 0.06
30.01 - 35.00 6 300,311.28 0.53
35.01 - 40.00 2 96,543.79 0.17
40.01 - 45.00 7 613,057.62 1.09
45.01 - 50.00 7 546,152.51 0.97
50.01 - 55.00 9 1,243,209.87 2.21
55.01 - 60.00 22 1,584,563.65 2.82
60.01 - 65.00 23 2,314,515.35 4.12
65.01 - 70.00 50 4,212,458.28 7.50
70.01 - 75.00 74 6,795,624.94 12.10
75.01 - 80.00 133 13,360,779.84 23.78
80.01 - 85.00 89 8,867,545.09 15.78
85.01 - 90.00 132 12,599,569.30 22.43
90.01 - 95.00 31 3,226,697.38 5.74
95.01 - 100.00 3 305,161.26 0.54
--- -------------- ------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 24
- --------------------------------------------------------------------------------
MORTGAGE RATES OF THE FIXED-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Loans
Number of By Aggregate
Range of Mortgage Rates (%) Mortgage Loans Aggregate Principal Balance Principal Balance
- --------------------------- -------------- --------------------------- -------------------
<S> <C> <C> <C>
7.501 - 8.000 9 $1,239,636.45 2.21 %
8.001 - 8.500 28 3,682,575.71 6.55
8.501 - 9.000 46 5,040,770.72 8.97
9.001 - 9.500 72 6,953,154.18 12.38
9.501 - 10.000 137 12,435,287.32 22.13
10.001 - 10.500 102 9,620,586.37 17.12
10.501 - 11.000 103 8,842,870.36 15.74
11.001 - 11.500 56 5,382,671.48 9.58
11.501 - 12.000 29 2,376,311.27 4.23
12.001 - 12.500 7 388,549.12 0.69
12.501 - 13.000 2 93,815.63 0.17
13.001 - 13.500 1 124,835.77 0.22
--- -------------- ------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 25
- --------------------------------------------------------------------------------
PRINCIPAL BALANCES OF THE FIXED-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Number of Loans by Aggregate
Range of Principal Balances ($) Mortgage Loans Aggregate Principal Balance Principal Balance
- ------------------------------- -------------- --------------------------- -----------------
<S> <C> <C> <C>
15,000.01 - 25,000.00 2 $ 49,675.86 0.09 %
25,000.01 - 50,000.00 132 5,188,715.41 9.24
50,000.01 - 75,000.00 176 10,883,432.36 19.37
75,000.01 - 100,000.00 103 8,884,207.90 15.81
100,000.01 - 125,000.00 67 7,496,055.37 13.34
125,000.01 - 150,000.00 34 4,594,367.66 8.18
150,000.01 - 175,000.00 18 2,924,965.08 5.21
175,000.01 - 200,000.00 18 3,400,317.84 6.05
200,000.01 - 225,000.00 13 2,738,831.06 4.88
225,000.01 - 250,000.00 3 705,390.17 1.26
250,000.01 - 275,000.00 7 1,859,107.63 3.31
275,000.01 - 300,000.00 3 888,268.14 1.58
300,000.01 - 325,000.00 3 932,773.58 1.66
325,000.01 - 350,000.00 3 1,028,021.40 1.83
375,000.01 - 400,000.00 1 380,000.00 0.68
400,000.01 - 425,000.00 1 415,599.82 0.74
425,000.01 - 450,000.00 3 1,306,180.23 2.32
450,000.01 - 475,000.00 2 931,127.92 1.66
475,000.01 - 500,000.00 1 494,632.98 0.88
525,000.01 - 550,000.00 1 526,531.79 0.94
550,000.01 - 575,000.00 1 552,862.18 0.98
--- -------------- ------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 26
- --------------------------------------------------------------------------------
REMAINING TERMS TO MATURITY OF THE FIXED-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Number of Loans by Aggregate
Remaining Term (months) Mortgage Loans Aggregate Principal Balance Principal Balance
- ----------------------- -------------- --------------------------- -----------------
<S> <C> <C> <C>
111 - 115 1 $ 45,707.00 0.08 %
116 - 120 3 171,390.14 0.31
166 - 170 12 1,724,243.30 3.07
171 - 175 40 5,441,460.03 9.69
176 - 180 358 33,217,324.37 59.13
221 - 225 1 29,078.53 0.05
231 - 235 3 166,542.54 0.30
236 - 240 12 782,435.55 1.39
296 - 300 1 42,962.44 0.08
341 - 345 3 218,192.72 0.39
346 - 350 3 241,143.08 0.43
351 - 355 22 1,856,992.97 3.31
356 15 1,025,482.82 1.83
357 20 1,831,726.23 3.26
358 41 3,925,057.56 6.99
359 29 2,508,875.10 4.47
360 28 2,952,450.00 5.26
-- -------------- ------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
ORIGINAL TERMS TO MATURITY OF THE FIXED-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of Fixed-Rate
Mortgage Loans by
Number of Aggregate Aggregate
Original Term (months) Mortgage Loans Principal Balance Principal Balance
- ---------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
116 - 120 4 $ 217,097.14 0.39 %
176 - 180 410 40,383,027.70 71.88
236 - 240 16 978,056.62 1.74
296 - 300 1 42,962.44 0.08
356 - 360 161 14,559,920.48 25.92
--- -------------- -------
Totals 592 $56,181,064.38 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 27
- --------------------------------------------------------------------------------
Adjustable-Rate Initial Mortgage Loans
<TABLE>
<S> <C>
Number of Adjustable-Rate Mortgage Loans: 588
Aggregate Principal Balance: $72,103,841.81
Principal Balance as of the Cut-Off Date:
Average: $122,625.58
Range: $24,942.65 - $757,993.99
Coupon Rates:
Weighted Average: 10.024%
Range: 7.500% - 13.125%
Gross Margin:
Weighted Average: 5.578%
Range: 3.625% - 7.625%
Periodic Caps:
Weighted Average: 1.010%
Range: 1.000% - 3.000%
Lifetime Caps:
Weighted Average: 17.016%
Range: 13.625% - 20.125%
Weighted Average Original Term to Maturity (months): 360
Remaining Term to Maturity (months):
Weighted Average: 358
Range: 340 - 360
Loan-to-Value Ratio at Origination:
Weighted Average: 81.93%
Range: 18.78% - 95.00%
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 28
- --------------------------------------------------------------------------------
ADJUSTABLE-RATE INITIAL MORTGAGE LOAN TYPE
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Number of Aggregate Loans by Aggregate
Loan Type Mortgage Loans Principal Balance Principal Balance
- --------- -------------- ----------------- -----------------
<S> <C> <C> <C>
ARM 2/28 519 $63,454,499.66 88.00 %
ARM 3/27 67 8,223,371.05 11.40
ARM 3YR 1 113,267.08 0.16
ARM 5YR 1 312,704.02 0.43
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
ORIGINAL LOAN-TO-VALUE RATIOS OF THE ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Range of Loan-to-Value Number of Aggregate Loans by Aggregate
Ratios at Origination (%) Mortgage Loans Principal Balance Principal Balance
- ------------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
15.01 - 20.00 2 $ 148,788.33 0.21 %
20.01 - 25.00 1 30,000.00 0.04
30.01 - 35.00 1 24,942.65 0.03
35.01 - 40.00 3 153,428.13 0.21
45.01 - 50.00 4 223,169.88 0.31
50.01 - 55.00 6 388,624.10 0.54
55.01 - 60.00 5 555,852.71 0.77
60.01 - 65.00 20 1,608,158.55 2.23
65.01 - 70.00 31 3,338,563.25 4.63
70.01 - 75.00 62 7,354,349.01 10.20
75.01 - 80.00 147 18,504,364.63 25.66
80.01 - 85.00 138 18,224,210.15 25.27
85.01 - 90.00 165 21,069,770.44 29.22
90.01 - 95.00 3 479,619.98 0.67
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 29
- --------------------------------------------------------------------------------
PRINCIPAL BALANCES OF THE ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Number of Aggregate
Range of Principal Balances ($) Mortgage Loans Aggregate Principal Balance Principal Balance
- ------------------------------- -------------- --------------------------- -----------------
<S> <C> <C> <C>
15,000.01 - 25,000.00 1 $ 24,942.65 0.03 %
25,000.01 - 50,000.00 78 3,259,067.40 4.52
50,000.01 - 75,000.00 126 7,941,696.50 11.01
75,000.01 - 100,000.00 92 8,076,373.50 11.20
100,000.01 - 125,000.00 108 12,138,747.20 16.84
125,000.01 - 150,000.00 48 6,564,011.21 9.10
150,000.01 - 175,000.00 35 5,667,144.01 7.86
175,000.01 - 200,000.00 23 4,256,004.50 5.90
200,000.01 - 225,000.00 19 3,980,075.68 5.52
225,000.01 - 250,000.00 11 2,584,063.36 3.58
250,000.01 - 275,000.00 6 1,605,220.57 2.23
275,000.01 - 300,000.00 10 2,869,992.40 3.98
300,000.01 - 325,000.00 7 2,201,313.21 3.05
325,000.01 - 350,000.00 3 1,001,151.91 1.39
350,000.01 - 375,000.00 3 1,101,194.36 1.53
375,000.01 - 400,000.00 1 395,815.25 0.55
400,000.01 - 425,000.00 4 1,632,859.73 2.26
425,000.01 - 450,000.00 3 1,312,944.74 1.82
450,000.01 - 475,000.00 1 457,722.78 0.63
475,000.01 - 500,000.00 3 1,462,784.43 2.03
500,000.01 - 525,000.00 1 513,500.00 0.71
525,000.01 - 550,000.00 1 526,200.00 0.73
550,000.01 - 575,000.00 2 1,134,021.65 1.57
625,000.01 - 650,000.00 1 639,000.78 0.89
750,000.01 - 775,000.00 1 757,993.99 1.05
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 30
- --------------------------------------------------------------------------------
REMAINING TERMS TO MATURITY OF THE ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Fixed-Rate Mortgage
Number of Loans by Aggregate
Remaining Term (months) Mortgage Loans Aggregate Principal Balance Principal Balance
- ----------------------- -------------- --------------------------- -----------------
<S> <C> <C> <C>
336 - 340 1 $ 72,346.93 0.10
341 - 345 3 526,759.96 0.73
346 - 350 6 431,366.82 0.60
351 - 355 69 9,258,431.86 12.84
356 44 5,145,038.22 7.14
357 60 8,131,501.11 11.28
358 91 11,516,806.68 15.97
359 105 12,447,228.23 17.26
360 209 24,574,362.00 34.08
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
ORIGINAL TERMS TO MATURITY OF THE ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Number of Aggregate Aggregate
Original Term (months) Mortgage Loans Principal Balance Principal Balance
- ---------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
360 588 $72,103,841.81 100.00 %
--- --------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 31
- --------------------------------------------------------------------------------
CURRENT MORTGAGE RATES FOR ALL ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Number of Aggregate Aggregate
Range of Mortgage Rates (%) Mortgage Loans Principal Balance Principal Balance
- --------------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
7.001 - 7.500 1 $ 264,406.29 0.37 %
7.501 - 8.000 4 641,304.02 0.89
8.001 - 8.500 15 2,316,621.13 3.21
8.501 - 9.000 52 8,380,572.76 11.62
9.001 - 9.500 79 9,208,888.82 12.77
9.501 - 10.000 158 20,513,776.89 28.45
10.001 - 10.500 89 10,459,645.40 14.51
10.501 - 11.000 103 12,119,770.05 16.81
11.001 - 11.500 48 4,842,302.84 6.72
11.501 - 12.000 32 2,896,629.87 4.02
12.001 - 12.500 4 211,430.97 0.29
12.501 - 13.000 2 198,492.77 0.28
13.001 - 13.500 1 50,000.00 0.07
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
INITIAL PERIODIC RATE CAP FOR ALL ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Number of Aggregate Aggregate
Periodic Cap Rates (%) Mortgage Loans Principal Balance Principal Balance
- ----------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
3.000 588 $72,103,841.81 100.00
--- --------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 32
- --------------------------------------------------------------------------------
PERIODIC RATE CAP FOR ALL ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Number of Aggregate Aggregate
Periodic Cap Rates (%) Mortgage Loans Principal Balance Principal Balance
- ----------------------- -------------- ----------------- -----------------
<S> <C> <C> <C>
1.000 586 $71,677,870.71 99.41 %
2.000 1 113,267.08 0.16
3.000 1 312,704.02 0.43
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
MAXIMUM MORTGAGE RATES FOR ALL ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Range of Maximum Number of Aggregate Aggregate
Rates (%) Mortgage Loans Principal Balance Principal Balance
- --------- -------------- ----------------- -----------------
<S> <C> <C> <C>
13.501 - 14.000 1 $ 312,704.02 0.43 %
14.001 - 14.500 2 377,673.37 0.52
14.501 - 15.000 3 328,600.00 0.46
15.001 - 15.500 14 2,203,354.05 3.06
15.501 - 16.000 52 8,380,572.76 11.62
16.001 - 16.500 79 9,208,888.82 12.77
16.501 - 17.000 159 20,591,977.53 28.56
17.001 - 17.500 88 10,381,444.76 14.40
17.501 - 18.000 104 12,285,839.91 17.04
18.001 - 18.500 48 4,842,302.84 6.72
18.501 - 19.000 31 2,730,560.01 3.79
19.001 - 19.500 4 211,430.97 0.29
19.501 - 20.000 2 198,492.77 0.28
20.001 - 20.500 1 50,000.00 0.07
--- -------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 33
- --------------------------------------------------------------------------------
GROSS MARGINS OF THE ADJUSTABLE-RATE INITIAL MORTGAGE LOANS
<TABLE>
<CAPTION>
Percentage of
Adjustable-Rate
Mortgage Loans by
Range of Gross Number of Aggregate Aggregate
Margins (%) Mortgage Loans Principal Balance Principal Balance
- ----------- -------------- ----------------- -----------------
<S> <C> <C> <C>
3.501 - 4.000 4 $ 556,673.37 0.77 %
4.001 - 4.500 27 4,490,734.38 6.23
4.501 - 5.000 80 10,078,205.50 13.98
5.001 - 5.500 152 20,025,566.26 27.77
5.501 - 6.000 185 20,325,697.56 28.19
6.001 - 6.500 99 11,957,871.84 16.58
6.501 - 7.000 36 4,262,369.70 5.91
7.001 - 7.500 4 344,809.12 0.48
7.501 - 8.000 1 61,914.08 0.09
--- ------------- ------
Totals 588 $72,103,841.81 100.00 %
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
<PAGE>
Marketing Memorandum- 3/22/00 8:00 a.m.
NovaStar Home Equity Loan Asset Backed Certificates, Series 2000-1 Page 34
- --------------------------------------------------------------------------------
All Non-Insured Mortgage Loans with LTV in excess of 50%
--------------------------------------------------------
<TABLE>
<S> <C>
Number of Loans: 10
Percentage of Fixed-Rate Loans (By number of loans) 70.00%
Percentage of Adjustable-Rate Loans (By number of loans) 30.00%
Percentage of all Mortgage Loans (By number of loans) 100.00%
Aggregate Principal Balance $ 1,963,763.16
Percentage of Fixed-Rate Loans (By principal balance) 22.95%
Percentage of Adjustable-Rate Loans (By principal balance) 77.05%
Percentage of all Loans (by number of loans) 100.00%
Principal Balance as of the Cut-Off Date:
Average: $ 196,376.32
Range: $ 33,550.00 - $ 757,993.99
Coupon Rates:
Weighted Average: 10.176%
Range: 9.500% - 12.375%
Weighted Average Original Term to Maturity (months): 329
Remaining Term to Maturity (months):
Weighted Average: 326
Range: 178 - 358
Loan-to-Value Ratio at Origination:
Weighted Average: 79.29%
Range: 50.29% - 100.00%
</TABLE>
- --------------------------------------------------------------------------------
FIRST UNION SECURITIES, INC.
THIS MARKETING MEMORANDUM SUPERSEDES ANY PREVIOUS MARKETING MEMORANDUM, AND WILL
BE SUPERSEDED BY THE INFORMATION IN THE PROSPECTUS SUPPLEMENT.
THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A
DISCLAIMER, PLEASE CONTACT FIRST UNION SECURITIES, INC. IMMEDIATELY.
