Amendment Number Three to Master Repurchase Agreement (2007 Servicing Rights) among Wachovia Bank, Wachovia Capital Markets, and NovaStar Mortgage

 Exhibit 10.1 AMENDMENT NUMBER THREE to the MASTER REPURCHASE AGREEMENT (2007 SERVICING RIGHTS) Dated as of April 25, 2007 among WACHOVIA BANK, N.A. WACHOVIA CAPITAL MARKETS, LLC and NOVASTAR MORTGAGE, INC. AMENDMENT NUMBER THREE ("Amendment Number Three"), dated as of October 22, 2007, by and among Wachovia Bank, N.A., as buyer ("Buyer"), Wachovia Capital Markets, LLC, as agent ("Agent"), NovaStar Mortgage, Inc., as seller (the "Seller"), NovaStar Financial, Inc. ("NFI"), NovaStar Holding Corporation ("NHC") and Homeview Lending Inc. ("Homeview", together with Seller, NFI and NHC, each a Guarantor and collectively the "Guarantors") to the Master Repurchase Agreement (2007 Servicing Rights), dated as of April 25, 2007, as amended by Amendment Number One, dated May 10, 2007 and by Amendment Number Two, dated September 7, 2007 (as amended, the "Master Repurchase Agreement"), by and among the Buyer, the Agent, the Seller and the Guarantors. RECITALS WHEREAS, Buyer, the Seller, the Guarantors and the Agent have agreed to amend the Master Repurchase Agreement pursuant to the terms and conditions set forth herein. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the Master Repurchase Agreement. SECTION 2. Amendments. Effective as of the date hereof, the Master Repurchase Agreement is hereby amended as follows: (a) Section (c) of Schedule 1 of the Master Repurchase Agreement is hereby amended by adding new subsection "7." directly after the end of subsection "6." therein as follows: "7. NovaStar Mortgage Funding Trust, Series 2007-2 Pooling and Servicing Agreement, dated as of May 1, 2007, by and among 

 NOVASTAR MORTGAGE FUNDING CORPORATION, as depositor, NOVASTAR MORTGAGE INC., as servicer and as sponsor, U.S. BANK NATIONAL ASSOCIATION, as custodian and DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee." SECTION 3. Conditions Precedent. This Amendment Number Three shall become effective only when: (a) This Amendment Number Three is executed and delivered by duly authorized officers of each of Buyer, Seller, Guarantors and Agent; (b) Buyer shall have received all fees and other amounts due and payable on or prior to the date hereof, including reimbursement of all out-of pocket expenses required to be reimbursed or paid by Seller hereunder or any other Program Document; (c) Any other deliverable due as the date hereof to Buyer; and (d) Buyer has received any other documents as the Buyer or counsel to the Buyer may reasonably request. SECTION 4. Governing Law. THIS AMENDMENT NUMBER THREE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. SECTION 5. Counterparts. This Amendment Number Three may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. SECTION 6. Costs. Seller shall promptly reimburse Buyer for all out-of-pocket costs and expenses of Buyer in connection with the preparation, execution and delivery of this Amendment Number Three (including, without limitation, the fees and expenses of counsel for Buyer). SECTION 7. Limited Effect. Except as amended hereby, the Master Repurchase Agreement shall continue in full force and effect in accordance with its respective terms. Reference to this Amendment Number Three need not be made in the Master Repurchase Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Master Repurchase Agreement, any reference therein to the Master Repurchase Agreement, being sufficient to refer to the Master Repurchase Agreement, as amended thereby. Seller shall be responsible for all costs associated with this Amendment Number Three. [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, Seller, Buyer, Agent and Guarantors have caused their names to be signed to this Amendment Number Three by their respective officers thereunto duly authorized as of the date first above written. NOVASTAR MORTGAGE, INC., as Seller By: /s/ Todd M. Phillips -------------------------------------- Name: Todd M. Phillips ------------------------------------ Title: Executive Vice President ----------------------------------- WACHOVIA BANK, N.A., as Buyer By: /s/ Andrew W. Riebe -------------------------------------- Name: Andrew W. Riebe ------------------------------------ Title: Director ----------------------------------- WACHOVIA CAPITAL MARKETS, LLC, as Agent By: /s/ Goetz Rokahr -------------------------------------- Name: Goetz Rokahr ------------------------------------ Title: Vice President ----------------------------------- Amendment No. 3 to the Master Repurchase Agreement (Servicing Rights) 

 Acknowledged and Agreed: NFI HOLDING CORPORATION, as Guarantor By: /s/ Todd M. Phillips ----------------------------------------- Name: Todd M. Phillips --------------------------------------- Title: Vice President -------------------------------------- NOVASTAR FINANCIAL, INC., as Guarantor By: /s/ Todd M. Phillips ----------------------------------------- Name: Todd M. Phillips --------------------------------------- Title: Vice President -------------------------------------- NOVASTAR MORTGAGE, INC., as Guarantor By: /s/ Todd M. Phillips ----------------------------------------- Name: Todd M. Phillips --------------------------------------- Title: Executive Vice President -------------------------------------- HOMEVIEW LENDING INC., as Guarantor By: /s/ Todd M. Phillips ----------------------------------------- Name: Todd M. Phillips --------------------------------------- Title: Vice President -------------------------------------- Amendment No. 3 to the Master Repurchase Agreement (Servicing Rights)