Item 7.01 Regulation FD Disclosure.

At the Annual Meeting of Shareholders of NovaStar Financial, Inc. (the "Company") on June 25, 2009, Lance Anderson, the Company's Chairman and Chief Executive Officer, disclosed that the Company had reached a tentative settlement in the previously disclosed dispute regarding the lease on its former corporate headquarters in Kansas City, Missouri. The Company will disclose the details of the settlement once it is final.

The information in this Current Report on Form 8-K if furnished pursuant to Item 7.01 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.