Amendment No. 1 to Master Repurchase Agreement (2007 Whole Loan) among Wachovia Bank, NFI Repurchase Corp., NMI Repurchase Corp., HomeView Lending, NMI Property Financing, NFI Holding, NovaStar Financial, and NovaStar Mortgage

 Exhibit 10.1 AMENDMENT NUMBER ONE to the MASTER REPURCHASE AGREEMENT (2007 WHOLE LOAN) Dated as of May 9, 2007 AMONG WACHOVIA BANK, NATIONAL ASSOCIATION, NFI REPURCHASE CORPORATION, NMI REPURCHASE CORPORATION, HOMEVIEW LENDING, INC., NMI PROPERTY FINANCING, INC., NFI HOLDING CORPORATION, NOVASTAR FINANCIAL, INC. AND NOVASTAR MORTGAGE, INC AMENDMENT NUMBER ONE ("Amendment Number One"), dated as of September 7, 2007, by and among Wachovia Bank, National Association, as buyer and agent (in its capacity as buyer, the "Buyer" and in its capacity as agent, the "Agent"), NFI Repurchase Corporation ("NFI Repurchase"), NMI Repurchase Corporation ("NMI Repurchase"), HomeView Lending, Inc. ("HVL") and NMI Property Financing, Inc. ("NovaStar Asset" together with NFI Repurchase, NMI Repurchase and HVL each a "Seller" and collectively, jointly and severally, the "Sellers") NovaStar Financial, Inc. ("NFI"), NFI Holding Corporation ("NFI Holding"), NovaStar Mortgage, Inc. ("NMI" together with HVL, NFI and NFI Holding, each a "Guarantor" and collectively, jointly and severally, the "Guarantors") to the Master Repurchase Agreement (2007 Non-Investment Grade Securities), dated as of May 9, 2007, (as amended, the "Master Repurchase Agreement"), among the Buyer, Sellers and Guarantors. RECITALS WHEREAS, Buyer, the Sellers, 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) The first sentence in Section 9(a)(vi) of the Master Repurchase 

 Agreement is hereby amended by deleting the reference to "$517,000,000" therein and replacing it with "$150,000,000". (b) Section 13(v) of the Master Repurchase Agreement is hereby amended and restated in its entirety as follows: v. Maintenance of Adjusted Tangible Net Worth. The Adjusted Tangible Net Worth of NFI at any time shall be greater than $150,000,000. (c) Section 13 of the Master Repurchase Agreement is hereby amended by adding new subsection (aa) as follows: At any time and for any reason, the Agent may, at Seller's expense, cause the appointment with immediate effect of one or more backup servicers to service some or all of the Purchased Assets, including, without limitation, the Purchased Assets relating to all repurchase agreements and other warehouse facilities, if any, and all securitizations, subject to the rights, if any, of parties other than Seller and its Affiliates to participate in the selection, instruction and/or monitoring of such backup servicer(s). Seller agrees, and agrees to cause its Subsidiaries and any other Affiliates within its control, to cooperate in any manner the Agent indicates is reasonably necessary to assist with the creation and maintenance of such backup servicing arrangements on terms acceptable to the Agent in its sole and absolute discretion. (d) Section 18(p) of the Master Repurchase Agreement is hereby amended and restated in its entirety as follows: p. [reserved]; (e) Section 18(q) of the Master Repurchase Agreement is hereby amended and restated in its entirety as follows:. q. the Adjusted Tangible Net Worth of NFI, on a consolidated basis, is less than or equal to $150,000,000 at any time;" (f) Clause (ii) of Exhibit A-2 to the Master Repurchase Agreement is hereby deleted in its entirety and replaced with the following: (i) [reserved]; (g) Clause (iii) of Exhibit A-2 to the Master Repurchase Agreement is 

 hereby amended by deleting the reference to "$517,000,000" therein and replacing it with "$150,000,000". SECTION 3. Conditions Precedent. This Amendment Number One shall become effective only when: (a) this Amendment Number One 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 ONE 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 One 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. Sellers 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 One (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 One 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. Sellers shall be responsible for all costs associated with this Amendment Number One. [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, Sellers, Buyer, Agent and Guarantors have caused their names to be signed to this Amendment Number One by their respective officers thereunto duly authorized as of the date first above written. NFI REPURCHASE CORPORATION, as a Seller By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller NMI REPURCHASE CORPORATION, as a Seller By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller HOMEVIEW LENDING, INC., as a Seller By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President NMI PROPERTY FINANCING, INC., as a Seller By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller Amendment No. 1 to the Master Repurchase Agreement (Whole Loan) 

 WACHOVIA BANK, NATIONAL ASSOCIATION, as Buyer and Agent By: /s/ Goetz Rokahr -------------------------------------- Name: Goetz Rokahr ------------------------------------ Title: Vice President ----------------------------------- Amendment No. 1 to the Master Repurchase Agreement (Whole Loan) 

 Acknowledged and Agreed: NFI HOLDING CORPORATION, as a Guarantor By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller NOVASTAR FINANCIAL, INC., as a Guarantor By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller NOVASTAR MORTGAGE INC., as a Guarantor By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President, Treasurer & Controller HOMEVIEW LENDING, INC., as a Guarantor By: /s/ Todd M. Phillips ------------------------------- Name: Todd M. Phillips Title: Vice President Amendment No. 1 to the Master Repurchase Agreement (Whole Loan)