NovaStar CEO to Leave Troubled Mortgage Lender

December 20, 2007 No Comments »

NovaStar Financial Inc.’s Chairman and CEO Scott Hartman, along with CFO Gregory Metz and General Counsel Jeff Ayers will leave the embattled lender effective January 3, just one day before a waiver extension from Wachovia expires.

Lance Anderson, co-founder and current president and COO of the Kansas City-based mortgage lender, will assume the chairman and CEO position, along with his previous roles.

A company release stated that “the board of directors is restructuring the company’s management” as a result of “changes in the business environment and operations of the company.”

NovaStar said in its third-quarter earnings release that it owed Wachovia about $83.9 million, but just over a month ago estimated that it had only $51.5 million in cash and would likely have to file for bankruptcy if forced to repay Wachovia.

Wachovia extended the original waiver until January 4, at which point NovaStar may need to make good on all the outstanding debt or close its doors.

Regardless of the waiver extension, things look pretty grim at NovaStar, whose operations now consist of managing a mortgage securities portfolio and running a limited retail brokerage.

The company is also awaiting word from the NYSE regarding a possible delisting after failing to meet minimum requirements.

NovaStar was formerly one of the top 20 subprime mortgage lenders, originating more than $10 billion in home loans in 2006, according to Inside Mortgage Finance.

The company’s shares are now trading at a mere $3.18, a significant fall from grace after reaching a high of $111.60 early this year.

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