Exhibit
        4.1

      


      AMENDMENT
        NO. 2

      TO
        THE

      POOLING
        AND SERVICING AGREEMENTS

      


      Amendment
        No. 2, dated as of October 31, 2007 (the “Amendment”),
        to
        the Pooling and Servicing Agreements (the “Agreements”)
        listed
        on Schedule I hereto, each among NovaStar Mortgage Funding Corporation (the
        “Depositor”),
        NovaStar Mortgage, Inc., as sponsor and servicer (the “Sponsor”
or
        “Servicer”),
        U.S.
        Bank National Association, as custodian (the “Custodian”),
        and
        Deutsche Bank National Trust Company, as trustee (the “Trustee”).
        Capitalized terms used and not defined herein shall have the meaning set
        forth
        in the Agreements and Appendix A thereto.

       

      WHEREAS,
        the parties hereto have entered into the Agreements; 

       

      WHEREAS,
        the purpose of this Amendment is to cure certain ambiguities in the wording
        of
        each Agreement.

       

      NOW,
        THEREFORE, in consideration of the promises and mutual agreements contained
        herein, the parties hereto agree to amend the Agreements pursuant to Section
        12.01 thereof as follows:

       

      1.    a) Revised
        Section 3.07(a).

       

      Section
        3.07(a) of each Agreement is hereby amended so as to read as set forth in
        Exhibit A hereto with respect to the related Agreement.

       

      b) Revised
        Section 6.06(e).

       

      For
        purposes of Section 6.06(e) “NovaStar Mortgage, Inc.” shall be replaced by “the
        Servicer immediately prior to such succession.”

      
         

        
          	 	
                  2.

                	Condition to Effectiveness.
                  

   

      

      As
        a
        condition to the effectiveness of this Amendment, an Opinion of Counsel
        satisfying the requirements of Section 12.01 of each Agreement has been received
        by the parties hereto. 

       

      
        	 	
                3.

              	
                Effect
                  of Amendment.
                  

              


      

       

      This
        Amendment to the Agreements shall be effective and the Agreements shall be
        deemed to be modified and amended in accordance herewith retroactively to
        the
        original dates of each related Agreement. The respective rights, limitations,
        obligations, duties, liabilities and immunities of the Company, the Sponsor,
        the
        Servicer, the Custodian and the Trustee shall hereafter be determined, exercised
        and enforced subject in all respects to such modifications and amendments,
        and
        all the terms and conditions of this Amendment shall be and be deemed to
        be part
        of the terms and conditions of the Agreements for any and all purposes. The
        Agreements, as amended hereby, are hereby ratified and confirmed in all
        respects. 

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	 	
                4.

              	
                The
                  Agreements in Full Force and Effect as Amended.
                  

              


      

       

      Except
        as
        specifically amended hereby, all the terms and conditions of the Agreements
        shall remain in full force and effect and, except as expressly provided herein,
        the effectiveness of this Amendment shall not operate as, or constitute a
        waiver
        or modification of, any right, power or remedy of any party to the Agreements.
        All references to the Agreements in any other document or instrument shall
        be
        deemed to mean the Agreements as amended by this Amendment. 

       

      
        	 	
                5.

              	
                Counterparts.
                  

              


      

       

      This
        Amendment may be executed by the parties in several counterparts, each of
        which
        shall be deemed to be an original and all of which shall constitute together
        but
        one and the same agreement. This Amendment shall become effective when
        counterparts hereof executed on behalf of such party shall have been received.
        

       

      
        	 	
                6.

              	
                Governing
                  Law.
                  

              


      

       

      This
        Amendment shall be construed in accordance with and governed by the laws
        of the
        State of New York applicable to agreements made and to be performed
        therein.



      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the Sponsor, the Servicer, the Depositor, the Trustee and
        the
        Custodian, have caused this Amendment to be duly executed by their officers
        thereunto duly authorized, all as of the day and year first above
        written.


      
        	 	 
	
                 

                 

                 

                 

                 

                 

                DB
                  STRUCTURED PRODUCTS, INC.

                hereby
                  consents to the foregoing Amendment as lender under certain financing
                  facilities:

                 

                By:__/s/
                  Glenn Minkoff __________________

                Name:
                  Glenn Minkoff

                Title:
                  Director

                 

                WACHOVIA
                  BANK, N.A.

                hereby
                  consents to the foregoing Amendment as lender under certain financing
                  facilities:

                 

                By:__/s/
                  Andrew W. Riebe _______________

                Name:
                  Andrew W. Riebe

                Title:
                  Director

                 

                WACHOVIA
                  CAPITAL MARKETS, LLC

                hereby
                  consents to the foregoing Amendment as lender under certain financing
                  facilities:

                 

                By:___/s/
                  Scott Shuman __________________

                Name:
                  Scott Shuman

                Title:
                  Vice President

                 

                WACHOVIA
                  INVESTMENT HOLDINGS, LLC 

                hereby
                  consents to the foregoing Amendment as lender under certain financing
                  facilities:

                 

                By:__/s/
                  Goetz Rokahr ___________________

                Name:
                  Goetz Rokahr

                Title:
                  Vice President

              	
                NOVASTAR
                  MORTGAGE FUNDING CORPORATION,

                as
                  Depositor

                 

                By: /s/
                  Matt Kaltenrieder        

                Name: Matt
                  Kaltenrieder

                Title: Vice
                  President

                 

                NOVASTAR
                  MORTGAGE, INC.,

                as
                  Servicer and as Sponsor

                 

                By: /s/
                  Matt Kaltenrieder        

                Name: Matt
                  Kaltenrieder

                Title: Vice
                  President

                 

                U.S.
                  BANK NATIONAL ASSOCIATION, as Custodian

                 

                By: /s/
                  Corinne Rhode        

                Name:
                  Corinne Rhode

                Title:
                  Assistant Vice President

                 

                DEUTSCHE
                  BANK NATIONAL TRUST COMPANY,

                as
                  Trustee

                 

                By: /s/
                  Mei Nghia        

                Name:
                  Mei Nghia

                Title:
                  Authorized Signer

                
                

                By: /s/
                  Ronaldo Reyes        

                Name:
                  Ronaldo Reyes

                Title:
                  Vice President

              
	 	 


      

      [Signature
        Page for Amendment No. 2 to the 2006-4, 2006-5 

      and
        2006-6 Pooling and Servicing Agreements - Section 3.07]



      
        
          
          

        

        
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      Schedule
        I

      


      
        	 	
                1.

              	
                Pooling
                  and Servicing Agreement, dated as of August 1, 2006, 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, relating to NovaStar
                  Mortgage Funding Trust, Series 2006-4, NovaStar Home Equity Loan
                  Asset-Backed Certificates, Series
                  2006-4.

              


      

      


      
        	 	
                2.

              	
                Pooling
                  and Servicing Agreement, dated as of September 1, 2006, 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,
                  relating
                  to NovaStar Mortgage Funding Trust, Series 2006-5, NovaStar Home
                  Equity
                  Loan Asset-Backed Certificates, Series
                  2006-5.

              


      

      


      
        	 	
                3.

              	
                Pooling
                  and Servicing Agreement, dated as of November 1, 2006, 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,
                  relating
                  to NovaStar Mortgage Funding Trust, Series 2006-6, NovaStar Home
                  Equity
                  Loan Asset-Backed Certificates, Series
                  2006-6.

              


      


      
        
          
          

        

        
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      Exhibit
        A

      


      Amended
        Section 3.07

      


      Section
        3.07 Withdrawals
        from the Collection Account.

       

      (a)
         The
        Servicer shall, from time to time as provided herein, make withdrawals from
        the
        Collection Account of amounts on deposit therein pursuant to Section 3.06
        that
        are attributable to the Mortgage Loans for the following purposes (without
        duplication):

       

      (i) to
        deposit in the Distribution Account, by the Servicer Remittance Date prior
        to
        each Distribution Date, all collections on the Mortgage Loans required to
        be
        distributed from the Distribution Account on a Distribution Date;

       

      (ii) to
        the
        extent deposited to the Collection Account, to reimburse itself or the related
        Subservicer for Servicing Advances paid to maintain individual insurance
        policies pursuant to Section 3.11, or Liquidation Expenses, paid pursuant
        to
        Section 3.13, such withdrawal right being limited to amounts received on
        particular Mortgage Loans (other than any Repurchase Price in respect thereof)
        which represent late recoveries of the payments for which such expenses were
        paid, or from related Liquidation Proceeds;

       

      (iii) to
        pay to
        itself out of each payment received on account of interest on a Mortgage
        Loan as
        contemplated by Section 3.15, an amount equal to the related Servicing Fee
        (to
        the extent not retained pursuant to Section 3.06);

       

      (iv) to
        pay to
        itself or the Sponsor, with respect to any Mortgage Loan or property acquired
        in
        respect thereof that has been purchased by the Sponsor, the Servicer or other
        entity, all amounts received thereon and not required to be distributed to
        Certificateholders as of the date on which the related Repurchase Price is
        determined;

       

      (v) to
        reimburse the Servicer or any Subservicer for any unreimbursed Advance or
        Servicing Advance of its own funds or any unreimbursed advance of such
        Subservicer’s own funds, the right of the Servicer or a Subservicer to
        reimbursement pursuant to this subclause (v) being limited to amounts received
        on a particular Mortgage Loan (including, for this purpose, the Repurchase
        Price
        therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
        payments or recoveries of the principal of or interest on such Mortgage Loan
        respecting which such Advance, Servicing Advance or advance was
        made;

       

      (vi) to
        reimburse the Servicer or any Subservicer from Insurance Proceeds or Liquidation
        Proceeds relating to a particular Mortgage Loan for Servicing Advances expended
        by the Servicer or such Subservicer pursuant to Section 3.13: (x) in good
        faith
        in connection with the restoration of the related Mortgaged Property which
        was
        damaged by the uninsured cause, (y) in connection with the liquidation of
        such
        Mortgage Loan, or (z) with respect to an MI Claim Payment Advance made by
        the
        Servicer with respect to such Mortgage Loan; provided, however, that
        reimbursements pursuant to clause (z) may only be made from MI Insurance
        Proceeds actually paid by the MI Insurer under the MI Policy related to such
        Mortgage Loan;

       


      
        
          
          

        

        
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      (vii) to
        reimburse the Servicer or any Subservicer for any unreimbursed Nonrecoverable
        Advance or Servicing Advance previously made, and to reimburse any successor
        Servicer for any Servicing Transfer Costs, including any legal fees or expenses
        relating to any such transfer, in each case not paid by the transferring
        Servicer, in each case otherwise not reimbursed pursuant to this Section
        3.07(a);

       

      (viii) to
        withdraw any other amount deposited in the Collection Account that was not
        required to be deposited therein pursuant to Section 3.06; 

       

      (ix) to
        reimburse the Servicer for costs associated with the environmental report
        handling the presence of any toxic or hazardous substance on a Mortgaged
        Property as set forth in Section 3.13(c);

       

      (x) to
        clear
        and terminate the Collection Account upon a termination pursuant to Section
        11.01; 

       

      (xi) to
        pay to
        the Servicer income earned on Eligible Investments in the Collection
        Account;

       

      (xii) to
        pay to
        the MI Insurer the monthly MI Premiums due under each MI Policy from payments
        received (or Advances made) on account of interest due on the related Mortgage
        Loan; and 

       

      (xiii) to
        make
        an Advance with respect to a Mortgage Loan that is Delinquent from funds
        held in
        the Collection Account as contemplated by Section 3.25, provided that the
        amount
        withdrawn for such an Advance is immediately deposited into the Distribution
        Account.

       

      Withdrawals
        made pursuant to clause (xii) shall be made on a first priority basis. In
        connection with withdrawals pursuant to clauses (ii), (iii), (iv), (v) and
        (vi),
        the Servicer’s entitlement thereto is limited to collections or other recoveries
        on the related Mortgage Loan, and the Servicer shall keep and maintain separate
        accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
        justifying any withdrawal from the Collection Account pursuant to such clauses.
        

       


      
        
          
          

        

        
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