NEW YORK, NY--(MARKET WIRE)--Nov 7, 2008 -- A lawsuit is pending in the United States District Court for the Southern District of New York, Docket No. 08-CV-5310 (DAB). The lawsuit was filed on behalf of all purchasers of NovaStar Home Equity Loan Asset-Backed Certificates ("Certificates") who purchased said certificates pursuant or traceable to the May 25, 2006 Registration Statement filed with the Securities and Exchange Commission. The case was filed against NovaStar Mortgage Funding Trust, Series 2006-3; NovaStar Mortgage Funding Trust, Series 2006-4; NovaStar Mortgage Funding Trust, Series 2006-5; NovaStar Mortgage Funding Trust, Series 2006-6; NovaStar Mortgage Funding Trust, Series 2007-1; NovaStar Mortgage Funding Trust, Series 2007-2; NovaStar Mortgage Funding Corporation; certain individual defendants; the underwriters of the Certificate Offerings; and various rating agencies that rated the Certificates. The lawsuit asserts claims under sections 11, 12 and 15 of the Securities Act of 1933. The complaint alleges that defendants made material misstatements and omissions in connection with the offerings regarding the collateral underlying the Certificates. If you purchased Certificates pursuant or traceable to the misleading Registration Statement, you may file a motion before the court no later than sixty (60) days from today to be appointed to lead the case on behalf of all eligible purchasers. If you have any questions concerning this matter, please contact plaintiff's counsel, Frank Schirripa, at (212) 964-0046.

     Contact:
     Frank Schirripa
     (212) 964-0046