Exhibit 33.1

            MANAGEMENT'S REPORT ON ASSESSMENT OF COMPLIANCE
                    WITH SEC REGULATION AB SERVICING CRITERIA

Management of NovaStar Mortgage, Inc., a Virginia corporation, (Servicer)
provides this platform-level assessment of compliance with the servicing
criteria specified in Item 1122(d) of Regulation AB promulgated by the
Securities and Exchange Commission.

Management has determined that the following servicing criteria are applicable
in regards to the following servicing platform for the following period as
follows.

Platform: All publicly-issued (i.e. transaction-level reporting initially
required under the Securities Exchange Act of 1934, as amended) residential
mortgage-backed securities and other mortgage-related asset-backed securities
which the company acted as the servicer for the ten month period ended October
31, 2007. The platform includes the following transactions:

                                                               Date of PSA
                                                               -----------------
NovaStar Mortgage Funding Trust, Series 2002 - 3               September 1, 2002
NovaStar Mortgage Funding Trust, Series 2003 - 1               February 1, 2003
NovaStar Mortgage Funding Trust, Series 2003 - 2               June 1, 2003
NovaStar Mortgage Funding Trust, Series 2003 - 3               September 1, 2003
NovaStar Mortgage Funding Trust, Series 2003 - 4               November 1, 2003
NovaStar Mortgage Funding Trust, Series 2004 - 1               March 1, 2004
NovaStar Mortgage Funding Trust, Series 2004 - 2               June 1, 2004
NovaStar Mortgage Funding Trust, Series 2004 - 3               September 1, 2004
NovaStar Mortgage Funding Trust, Series 2004 - 4               November 1, 2004
NovaStar Mortgage Funding Trust, Series 2005 - 1               February 1, 2005
NovaStar Mortgage Funding Trust, Series 2005 - 2               May 1, 2005
NovaStar Mortgage Funding Trust, Series 2005 - 3               September 1, 2005
NovaStar Mortgage Funding Trust, Series 2005 - 4               December 1, 2005
NovaStar Mortgage Funding Trust, Series 2006 - 1               April 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 1MTA            May 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 2               June 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 3               June 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 4               August 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 5               September 1, 2006
NovaStar Mortgage Funding Trust, Series 2006 - 6               December 1, 2006
NovaStar Mortgage Funding Trust, Series 2007 - 1               February 1, 2007
NovaStar Mortgage Funding Trust, Series 2007 - 2               May 1, 2007

Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d),
to the extent required by the related transaction agreements as to any
transaction, except for the following criteria: 1122 (d)(3)(ii), (3)(iii),
(3)(iv), (4)(ii) and the portion of (4)(xii) which relates to the monitoring of
late payment penalties.


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<PAGE>

Period: January 1, 2007 to October 31, 2007. Effective November 1, 2007, the
Company sold its mortgage servicing rights to a third party and no longer
services mortgage loans.

With respect to the Platform and the Period, the Company provides the following
assessment of compliance in respect of the Applicable Servicing Criteria:

      o     The Company is responsible for assessing its compliance with the
            Applicable Servicing Criteria.

      o     The Company has assessed compliance with the Applicable Servicing
            Criteria.

      o     As of October 31, 2007 and for the Period, the Company was in
            material compliance with all Applicable Servicing Criteria with
            respect to the Platform taken as a whole, except as follows:

            1.    Certain advances of funds or guarantees regarding collections,
                  cash flows or distributions, and any interest or other fees
                  charged for such advances were not made as specified in the
                  transaction agreements. Specifically, a process for prepayment
                  penalty collection guarantees, for loans which had twenty
                  percent or more of the principal balance paid off in a twelve
                  month period, was not developed.

            2.    Of 45 reconciliations tested, four reconciliations for
                  asset-backed securities related bank accounts, including
                  custodial accounts and related bank clearing accounts, did not
                  appropriately contain explanations for reconciling items and
                  one reconciliation contained a reconciling item that was not
                  resolved within 90 calendar days of its original
                  identification.

Deloitte & Touche LLP, an independent registered public accounting firm, has
issued an attestation report with respect to the Company's assertion of
compliance with the Applicable Servicing Criteria as of October 31, 2007 and for
the Period.


BY: /s/ W. Lance Anderson
    ------------------------------------
    W. Lance Anderson
    President and Chief Executive Officer


BY: /s/ Rodney E. Schwatken
    ------------------------------------
    Rodney E. Schwatken
    Executive Vice President, Chief Financial Officer and Secretary

Date: March 11, 2008


                                        2
<page>

                     REPORT ON ASSESSMENT OF COMPLIANCE WITH
           ss.1122(d)(2)(vi), ss.1122(d)(4)(xi) and ss.1122(d)(4)(xii)
                       of REGULATION AB SERVICING CRITERIA
                            FOR THE REPORTING PERIOD
                      JANUARY 1, 2007 TO DECEMBER 31, 2007


American Security Insurance Company, Standard Guaranty Insurance Company and
TrackSure Insurance Agency, Inc, (formerly, "Safeco Financial Institution
Solutions, Inc.") (collectively, the "Asserting Party") is responsible for
assessing compliance for the period of January 1, 2007 through December 31, 2007
(the "Reporting Period") with the servicing criteria set forth in
ss.1122(d)(2)(vi), ss.1122(d)(4)(xi) and ss.1122(d)(4)(xii) of Title 17,
ss.229.1122(d) of the Code of Federal Regulations, (the "Applicable Servicing
Criteria") which the Asserting Party has concluded are applicable to the
insurance escrow servicing activities it performs with respect to all mortgage
backed securities transactions that were registered after January 1, 2006 with
the Securities and Exchange Commission pursuant to the Securities Act of 1933
(the "Platform Transactions"). The Asserting Party used the criteria set forth
in paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the
Applicable Servicing Criteria.

The Asserting Party has assessed its compliance with the Applicable Servicing
Criteria for the Reporting Period and has identified a material instance of
noncompliance with the Applicable Servicing Criteria. Specifically, the
Asserting Party did not have, during the Reporting Period, sufficient policies
and procedures to capture the information with respect to the Platform
Transactions necessary to determine compliance with ss.1122(d)(4)(xii).

The Asserting Party has concluded that, with the exception of the aforementioned
material instance of noncompliance, the Asserting Party has complied, in all
material respects, with the Applicable Servicing Criteria for the Reporting
Period with respect to the Platform Transactions.

PricewaterhouseCoopers LLP, an independent registered public accounting firm,
has issued an attestation report on the assessment of compliance with the
Applicable Servicing Criteria as of and for the Reporting Period.

American Security Insurance Company
Standard Guaranty Insurance Company
TrackSure Insurance Agency, Inc.
    (formerly, "Safeco Financial Institution Solutions, Inc.")


    /s/ John Frobose

    By: John Frobose
    Senior Vice President

Date: February 19, 2008


<page>

REPORT ON ASSESSMENT OF COMPLIANCE

First American Real Estate Solutions of Texas, L.P. (an indirect subsidiary of
The First American Corporation and "the Asserting Party") is responsible for
assessing compliance as of December 31, 2007, and for the period from January 1,
2007 through December 31, 2007 ("the Reporting Period") with the servicing
criteria set forth in Title 17, Sections 229.1122(d)(1)(iv), (d)(2)(v),
(d)(2)(vi), (d)(2)(vii), (d)(4)(xi), (d)(4)(xii) and (d)(4)(xiii) of the Code of
Federal Regulations applicable to the Asserting Party ("the Applicable Servicing
Criteria"). The transactions covered by this report include all loans for
residential and commercial mortgage loan outsourcing customers for which the
Asserting Party served as the residential and commercial tax service provider
("the Platform").

The Asserting Party has assessed its compliance with the Applicable Servicing
Criteria for the Reporting Period and has concluded that the Asserting Party has
complied, in all material respects, with the Applicable Servicing Criteria as of
December 31, 2007, and for the Reporting Period with respect to the Platform
taken as a whole.

PricewaterhouseCoopers LLP, an independent registered public accounting firm,
has issued an attestation report on the assessment of compliance with the
Applicable Servicing Criteria as of December 31, 2007, and for the Reporting
Period as set forth in this assertion.

FIRST AMERICAN REAL ESTATE SOLUTIONS OF TEXAS, L.P.
By: First American Real Estate Solutions LLC
    General Partner

/s/ Lucy A. Przybyla
----------------------------------
Lucy A. Przybyla
Senior Vice President
February 12, 2008