NovaStar Acquires Appraisal Management Company
NovaStar Financial, Inc. said Thursday that it had acquired a majority interest in Indianapolis-based residential appraisal management company PipeFire, LLC. Going forward, the business will operate under the name StreetLinks National Appraisal Services, with offices in Indianapolis and Kansas City. "PipeFire is well known to us from our days as a retail lender as we used its services in our operation," said Lance Anderson, CEO at NovaStar. "With the enhanced focus on the appraisal process as the result of the recent downturn in the housing market we feel we can provide a valuable service to the lending community." "While we cannot expect this transaction or StreetLinks to resolve the significant challenges NovaStar still faces, we view the acquisition as a positive step toward reestablishing niche operations in the residential housing market," he added. NovaStar was once a large subprime lender, and saw its business collapse in the back half of last year, while the company terminated its REIT status and terminated on the brink of bankruptcy; since surviving the tumult, the company has quietly been managing its existing loan portfolio, and searching for opportunities in the mortgage space. Appraisal management has the potential to be a very large business going forward, as a pact between Fannie Mae (FNM), Freddie Mac (FRE) and New York attorney general Andrew Cuomo would establish a so-called Home Valuation Code of Conduct that would essentially require appraisals to be run through independent third party platforms. The HVCC conditions are scheduled to go into effect on January 1, but have been strongly objected to by individual appraisers and key regulators as well. Steve Haslam, senior vice president at NovaStar Mortgage, and former head of its retail lending division, will become CEO of StreetLinks. In addition to significant experience in the retail lending arena, Steve formerly led LandSafe Appraisal, another appraisal management firm. For more information, visit http://www.novastarmortgage.com. Disclosure: The author was long FRE when story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.