Novation Holdings Inc. · OTC:NOHO
Novation — Novastar Financial — Deutsche Bank Securitization Conference 2007
12 slides from Novation's conference presentation, Apr 19, 2007
Slide 1: Deutsche Bank Securitization Conference
Deutsche Bank Securitization Conference New York, NY April 19, 2007
Slide 2: Forward looking disclosure
Forward looking disclosure Certain matters set forth in this presentation contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections, and assumptions with respect to, among other thin
Slide 3: Overview
Overview Founded: June, 1996 IPO: October, 1997 (NYSE: NFI) NovaStar is currently structured as a REIT Parent company does not pay corporate taxes Focus is on being a portfolio investor vs. pure mortgage banking Top 25 subprime residential mortgage originator, servicer and issuer Wholesale & Retail
Slide 4: Corporate update
Corporate update Liquidity Received a commitment for an additional $100 million of liquidity collateralized by mortgage servicing rights and residuals EPD repurchases from whole loan sales All EPD buybacks have either already taken place or have been fully reserved for Anticipate most of 2007 produc
Slide 5: 2006 vintage
2006 vintage Tone of the market was being driven by irrational competitors Too great of a focus on volume rather than profitability Guidelines became outdated for changing housing market Delinquencies December appears to have been the peak We have seen month over month improvement in early stage del
Slide 6: Delinquency trends
Delinquency trends Month to Month Change for All 2006 Securitizations (excluding 2006-MTA1) Status Nov-Dec Dec-Jan Jan-Feb Feb-Mar 1-29 1.39% -1.15% -0.22% -0.45% 30-59 0.13% 0.16% -0.34% -0.21% 60-89 0.17% 0.01% 0.17% -0.16% 90+ 0.13% 0.15% 0.17% 0.23% FC 0.61% 0.86% 0.45% 0.54% REO 0.11% 0.31% 0.4
Slide 7: MI claims summary
MI claims summary Loan Resolutions/Liquidations insured by Radian, PMI or MGIC Data thru 2/28/2007 Original Severity Severity Resolution Type Loans Balance % by # % by $ before MI after MI MI Benefit MI Paid 2,864 $314,098,398 76.4% 68.2% 39.1% 8.2% 30.9% MI Acquired 328 $55,874,343 8.7% 12.1% 19.2%
Slide 8: NovaStar securitizations vs. the industry
NovaStar securitizations vs. the industry Notes: 1. Data source: NovaStar and Intex. 2. HEL Universe consists of 300+ deals for which NovaStar has loan level data and has deemed to be typical HEL transactions. 3. NovaStar Deals represent 2005-3 through 2007-1. 8
Slide 9: Changes to 2007 vintage
Changes to 2007 vintage Screening for layered risk by moving the loss model to front end Tighter guidelines Eliminated 80/20’s Increased minimum ficos in higher LTV buckets Higher coupons Less competition Retail channel expected to represent a larger percent of production Whole loan prices and ABS b
Slide 10: Recent production trends
Recent production trends Oct '06 Nov '06 Dec '06 Jan '07 Feb '07 Mar '07 Production (000's) $852,105 $872,895 $917,378 $739,226 $386,249 $314,741 1 WAC 8.91% 8.85% 8.74% 8.85% 8.81% 9.07% FICO 624 626 626 624 617 618 LTV 82.7% 82.9% 82.7% 82.9% 81.6% 80.6% CLTV 86.5% 86.6% 86.3% 86.6% 84.2% 83.2% 2n
Slide 11: Servicing
Servicing $16 billion portfolio Total staff of approximately 250 Reduced average loans per collector metric from 225 to 150 (90 day bucket) ARM conversion training Modifications Primarily rate adjustments which make it affordable for borrower to stay in the home Running at about twice the rate of 20
Slide 12: Additional data
Additional data Complete production and performance data can be found on NovaStar’s websites: http://www.novastarbondinvestors.com/ Static pool performance data Offering documents Bond remittance statements http://www.novastarmortgage.com/corporate/ Monthly production reports Mortgage insurance clai
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