Exhibit 10.54

SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

(SECURITIES)

Dated as of April 14, 2006

AMONG:

Wachovia Investment Holdings, LLC (WIH), as buyer and Wachovia Bank, National Association
(WBNA), as buyer (WBNA and WIH each a Buyer and collectively Buyers which term shall include any Principal as defined and provided for in Annex I), or each as agent pursuant hereto (Agent);

NovaStar Mortgage, Inc. (NMI), as seller, NovaStar Certificates Financing LLC (NCFLLC), as a seller, NovaStar
Certificates Financing Corporation (NCFC), as a seller and NovaStar Assets Corp. (NAC), as seller ( NMI, NCFLLC, NCFC and NAC, each a Seller and collectively, jointly and severally, the Sellers).

1. APPLICABILITY

Buyers
shall, from time to time, upon the terms and conditions set forth herein, agree to enter into transactions in which the related Seller transfers to the related Buyer Eligible Assets against the transfer of funds by such Buyer, with a simultaneous
agreement by such Buyer to transfer to the related Seller such Purchased Assets at a date certain, against the transfer of funds by the related Seller. Each such transaction shall be referred to herein as a Transaction, and, unless
otherwise agreed in writing, shall be governed by this Agreement. This Agreement amends, restates and replaces the Original Agreement in its entirety.

2. DEFINITIONS AND INTERPRETATION

a. Defined Terms.

3YR Repurchase Agreement means that certain Master Repurchase Agreement (Securities), dated as of April 14, 2006, among Wachovia
Investment Holdings, LLC, NovaStar Mortgage, Inc., NovaStar Assets Corp., NovaStar Certificates Financing LLC, and NovaStar Certificates Financing Corporation, as amended from time to time.

Adjusted Tangible Net Worth means shall mean at any date:

(a) Book Net Worth, minus

(b) The sum of (1) all assets which would be classified as intangible assets of NFI and its consolidated Subsidiaries under GMP (except purchased and capitalized value of servicing rights), including, without
limitation, goodwill (whether representing the excess cost over book value of assets acquired or otherwise), patents, trademarks, trade names, copyrights, franchises and deferred charges (including, without limitation, unamortized debt discount and
expense, organization costs and research and product development costs) plus (2) all receivables from directors, officers and shareholders of NFI and its consolidated Subsidiaries, minus



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(c) The amount of unrealized gains on debt securities (as defined in FASB 115) of NFI and
any Subsidiaries of NFI Holding, plus

(d) The amount of unrealized losses on debt securities (as defined in FASB 115) of
NFI and any Subsidiaries of NFI Holding.

Provided that in all cases such amounts shall be determined by combining the relevant figures for
NFI and for NFI Holding and its consolidated Subsidiaries and its Affiliates, as accounted for under the equity method.

Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control means the
power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting equity, by contract or otherwise.

Agent means Wachovia Investment Holdings, LLC, Wachovia Bank, National Association or any successor.

Agreement means this Second Amended and Restated Master Repurchase Agreement (Securities), as it may be amended, supplemented or otherwise modified from time to time.

Asset-Backed Security shall mean either (i) a certificate issued under a Trust Agreement representing 100% ownership of a
Delaware business trust that has issued bonds secured by a pool of Mortgage Assets originated in accordance with the Underwriting Standards of the applicable Affiliate of the related Seller or (ii) a subordinated bond issued by a Delaware
business trust that has issued bonds under an Indenture secured by a pool of Mortgage Assets originated in accordance with the Underwriting Standards of the applicable affiliate of the related Seller.

Book Net Worth shall mean the excess of total assets of NFI and its consolidated Subsidiaries over Total Liabilities of NFI and its
consolidated Subsidiaries determined in accordance with GAAP (or such non-GAAP principles as may be disclosed to and approved by Buyers from time to time).

Breakage Costs shall have the meaning assigned thereto in Section 3(c) herein.

Business Day means any day other than (i) a Saturday or Sunday or (ii) a day upon which the New York Stock Exchange or the Federal Reserve Bank of New York is obligated by law or executive order to be closed.

Buyers Margin Amount means, with respect to any Transaction as of any date of determination, the amount obtained
by application of Buyers Margin Percentage to the Repurchase Price for such Transaction as of such date.

Buyers
Margin Percentage shall have the meaning assigned thereto in the Side Letter.

Change in Control shall mean
the acquisition (excluding any conversion of convertible preferred stock to common stock) by any Person, or two or more Persons acting in concert, of



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beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of outstanding
shares of voting stock of the Guarantor at any time if after giving effect to such acquisition such Person or Persons owns fifty percent (50%) or more of such outstanding voting stock.

Change in Law means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any
law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by Buyers (or any Affiliate of Buyers) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

Code shall
mean the Internal Revenue Code of 1986, as amended.

Collateral shall have the meaning assigned thereto in
Section 8 hereof.

Confirmation shall have the meaning assigned thereto in Section 4(b) hereof.

Default means any event, that, with the giving of notice or the passage of time or both, would constitute an Event of Default.

Default Rate means, as of any date of determination, the lesser of (i) the Pricing Rate plus 4% and (ii) the
maximum rate permitted by applicable law.

Effective Date shall mean the date set forth on the top of the first page of
this Agreement.

Eligible Asset shall mean each Eligible Rated Certificate, Eligible NIM Bond, Eligible Subordinate
Certificate and Eligible Seasoned Residual with respect to which each of the representations and warranties set forth on Exhibit C hereto is accurate and complete as of the date of the related Confirmation (and the related Seller by including any
security in any such Transaction shall be deemed to make such representations and warranties to Buyers at and as of the date of such Transaction).

Eligible NIM Bond shall mean a net interest margin security arising from future securitizations of the related Sellers NIM securities rated investment grade by at least two rating agencies; provided,
however, that all rated securities registered for public sale shall not be deemed an Eligible NIM Bond until the expiration of any applicable SEC-mandated cooling off period.

Eligible Rated Certificate shall mean the AAA rated Class AIO and AAA rated P Certificates arising from future securitizations of the
related Sellers originated first-lien and second-lien home equity loans to sub-prime borrowers deemed to be eligible by Buyers in their sole and absolute discretion or such other similar securities arising from future securitizations deemed to
be eligible by Buyers in their sole and absolute discretion; provided, however, that all rated securities registered for public sale shall not be deemed an Eligible Rated Certificate until the expiration of any applicable SEC-mandated
cooling off period.



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Eligible Seasoned Residual means residual certificates issued from existing
securitizations which include either Sellers originated first-lien and second-lien home loans to sub-prime borrowers, which residual certificates may have previously been pledged and included in a net interest margin security and are deemed to
be eligible by the Buyers in their sole and absolute discretion; provided, however, that any seasoned residual shall cease to be an Eligible Seasoned Residual if the Purchase Price with respect to such seasoned residual certificate, when added to
the aggregate Purchase Price with respect to all seasoned residual certificates subject to Transactions, exceeds $50,000,000; provided further, that any Eligible Seasoned Residual shall cease to be an Eligible Seasoned Residual if such Eligible
Seasoned Residual has been subject to Transactions for greater than 364 days.

Eligible Subordinate Certificates means
certificates issued from existing securitizations which include either Sellers originated first lien and second lien home loans to sub prime borrowers, which certificates are rated at least Baa3 or BBB- by a Rating
Agency (if the Eligible Subordinate Certificates are rated by more than one Rating Agency, the lowest rating shall be used for purposes of determining eligibility) and which certificates are deemed to be eligible by Buyers in their sole discretion;
provided, however, that any Eligible Subordinate Certificate shall cease to be an Eligible Subordinate Certificate if such Eligible Subordinate Certificate has been subject to Transactions for greater than 364 days.

Event of Default shall have the meaning assigned thereto in Section 18 hereof.

GAAP shall mean generally accepted accounting principles in the United States of America in effect from time to time.

Governing Agreement shall mean with respect to any Purchased Asset, the pooling and servicing agreement, indenture or similar
agreement.

Governmental Authority shall mean any nation or government, any state or other political subdivision
thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over any Seller.

Guarantee means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person.

Guarantors means NFI Holding Corp. and NFI.

Guaranty means the Guaranty of the Guarantors, jointly and severally, in favor of the Buyers, dated as of April 14, 2006.

Income means, with respect to any Purchased Asset at any time, any principal thereof and all interest, dividends and
other collections and distributions thereon, but not including any commitment nor origination fees.

Indebtedness shall
mean, for any Person: (a) all obligations for borrowed money; (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money)
arising, and accrued



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expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable and paid within ninety (90) days of the date
the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person;
(d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued for account of such Person; (e) capital lease obligations of such Person; (f) obligations of such Person under
repurchase agreements or like arrangements; (g) indebtedness of others guaranteed on a recourse basis by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such
Person; (i) indebtedness of general partnerships of which such Person is a general partner; and (j) any other contingent liabilities of such Person.

Investment Company Act means the Investment Company Act of 1940, as amended, including all rules and regulations promulgated thereunder.

LIBOR shall mean, for each day of a Transaction, a rate based on the offered rates of the Reference Banks for one-month U.S. dollar
deposits, as determined by the related Buyer for the related Purchase Date.

Margin Call As defined in
Section 6(a).

Margin Deficit shall have the meaning assigned thereto in Section 6(a) hereof.

Market Value means (i) with respect to any Purchased Asset that is an Eligible Asset, as of any date of determination, the value
ascribed to such asset by related Buyer in its sole discretion, and (ii) with respect to a Purchased Asset that is not an Eligible Asset, zero.

Master Security and Netting Agreement means the Master Security and Netting Agreement dated as of April 15, 2005 among Buyers and certain Affiliates and the Guarantors and certain Affiliates as
it may be further amended from time to time (including the joinder agreement dated as of April 14, 2006 executed in connection with this Agreement).

Material Adverse Change means, with respect to a Person, any material adverse change in the business, condition (financial or otherwise), operations, performance, or properties taken as a whole of
such Person.

Material Adverse Effect means (a) a Material Adverse Change with respect to a Guarantor or a
Guarantor and its Affiliates that are party to any Program Document taken as a whole; (b) a material impairment of the ability of a Guarantor or any Affiliate that is a party to any Program Document to perform under any Program Document and to
avoid any Event of Default; (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Document against a Guarantor or any Affiliate that is a party to any Program Document; or (d) a material
adverse effect upon the value or marketability of a material portion of the Purchased Assets.

Maximum Aggregate Purchase
Price means $125,000,000.



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Mortgage Assets shall mean home equity loans or mortgage loans originated by an
affiliate of a Seller.

Non-Seller Affiliate means an Affiliate of any Seller or Guarantor that is not, itself, a Seller
or Guarantor.

Notice Date shall have the meaning assigned thereto in Section 4 hereof.

NCI Repurchase Agreement means the Master Repurchase Agreement dated as of December 12, 2005 by and between NovaStar Capital,
Inc. and the Wachovia Bank, National Association.

NFI means NovaStar Financial, Inc. and its permitted successors and
assigns.

NFI Holding means NFI Holding Corp. and its permitted successors and assigns.

NMI Master Repurchase Agreement means the Amended and Restated Master Repurchase Agreement dated as of May 14, 2004, between
Wachovia Bank, National Association and NovaStar Mortgage, Inc.

Obligations means (a) all of Sellers and
Guarantors obligation to pay the Repurchase Price on the Repurchase Date, and other obligations and liabilities of Sellers and Guarantors, to Buyers or their Affiliates arising under, or in connection with, the Program Documents or otherwise,
whether now existing or hereafter arising; (b) any and all sums paid by Buyers or on behalf of Buyers pursuant to the Program Documents in order to preserve any Purchased Asset or its interest therein; (c) in the event of any proceeding
for the collection or enforcement of any of Sellers or Guarantors indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise
disposing of or realizing on any Purchased Asset, or of any exercise by Buyers or such Affiliate of its rights under the related agreements, including without limitation, reasonable attorneys fees and disbursements and court costs; and
(d) all of Sellers and Guarantors obligations to Buyers or any other Person pursuant to the Program Documents.

Original Agreement shall mean that certain Amended and Restated Master Repurchase Agreement, as amended, dated April 15, 2005 among Wachovia Capital Investment, Inc., NovaStar Mortgage, Inc. and NovaStar Assets Corp.

Person shall mean any legal person, including any individual, corporation, partnership, association, joint-stock
company, trust, limited liability company, unincorporated organization, governmental entity or other entity of similar nature.

Price Differential means, with respect to each Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price on a 360-day-per-year basis for
the actual number of days during the period commencing on (and including) the Purchase Date and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential in respect of such period previously paid by the
related Seller to the related Buyer) with respect to such Transaction.



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Pricing Rate shall have the meaning assigned thereto in the Side Letter.

Prime Rate means the daily prime loan rate as reported in The Wall Street Journal or if more than one rate is published, the
highest of such rates.

Principal shall have the meaning given to it in Annex I.

Program Documents means this Agreement, the Master Security and Netting Agreement, the Guaranty, the Side Letter, the Swap Agreement
and any other agreement entered into by any of the Sellers and/or a Guarantor, on the one hand, and Buyers or one of their Affiliates on the other, in connection herewith or therewith.

Property means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.

Purchase Date means the date on which Purchased Assets are to be transferred by the related Seller to the
related Buyer.

Purchase Price mean the price at which Purchased Assets are transferred by Sellers to Buyers in a
Transaction, which shall (unless otherwise agreed) be equal to the Purchase Price Percentage times the Market Value of the related Purchased Assets.

Purchase Price Percentage shall have the meaning assigned thereto in the Side Letter.

Purchased Assets means, with respect to a Transaction, the securities, together with the related Records and other Collateral, and all instruments, chattel paper, and general intangibles comprising or relating to all of
the foregoing.

Rating Agency means each of Moodys Investors Service, Inc., Standard & Poors, a
division of The McGraw Hill Companies, Inc. or Fitch Ratings.

Records means all instruments, agreements and other
books, records, and reports and data generated by other media for the storage of information maintained by the related Seller or any other person or entity with respect to a Purchased Asset. Records shall include the certificates with respect to any
Purchased Asset and any other instruments necessary to document or service a Purchased Asset.

Reference Banks mean any
leading banks selected by the Agent which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market with an established place of business in London.

REMIC means a real estate mortgage investment conduit within the meaning of Section 860D of the Code.

Repurchase Date shall have the meaning assigned thereto in Section 3(b) and shall also include the date determined by application
of Section 19.



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Repurchase Price means the price at which Purchased Assets are to be transferred from
the related Buyer to the related Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such
determination.

Required Equity shall mean, with respect to the Guarantors (and its consolidated Subsidiaries)
(together, the Companies), the sum of the dollar amounts calculated after multiplying the amount determined by combining the relevant figures for the Guarantors and their consolidated Subsidiaries for each asset class set forth in the
table below (or if such asset class is owned by NFI or a consolidated Subsidiary but cannot be determined by combining the relevant figures for the Guarantors and their consolidated Subsidiaries, the fair market value thereof as calculated by the
Companies subject, however, to the approval of the Buyers which will not be unreasonably withheld) by the Percentage Multipliers set forth opposite such asset class in the table below:



|                                                                                                                           |  |                      |  
|-------------------------------------------------------------------------------------------------------------------------- |  | -------------------- | -
|Asset Class                                                                                                                |  | PercentageMultiplier |  
|Cash                                                                                                                       |  | 0                    | %
|Performing Warehouse Mortgage Loans including Accrued Interest Receivable                                                  |  | 5                    | %
|AAA-Rated I/O and Prepay (P) Certificates booked on-B/S                                                                    |  | 25                   | %
|BBB NIM Certificates                                                                                                       |  | 25                   | %
|Residuals from whole loan securitizations (including 1999-1)                                                               |  | 35                   | %
|Residuals from NIM/CAPS                                                                                                    |  | 100                  | %
|Non-rated subordinate bonds (i.e. class O from 2002-2)                                                                     |  | 100                  | %
|BBB-Rated Mortgage-Backed Securities                                                                                       |  | 25                   | %
|BB-Rated Mortgage-Backed Securities                                                                                        |  | 50                   | %
|Agency Securities                                                                                                          |  | 3                    | %
|Servicing Agreements (Mortgage Servicing Rights)                                                                           |  | 35                   | %
|Servicing Advances                                                                                                         |  | 15                   | %
|REO + Non-performing (90+ & foreclosures from bond collateral calls)                                                       |  | 35                   | %
|Other assets  -        Hedging Agreements (Value of reserves that are not reflected in Marks to Market
that impact equity) |  | 100                  | %
|                                                                                                                           | 
|-        All Other Assets (all else remaining - including Other Receivables &
PP&E)                                        |  | 35                   | %
|Intangible Assets                                                                                                          |  | 100                  | %



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SEC shall mean the Securities and Exchange Commission.

Servicer shall mean the designated servicer under each Servicing Agreement.

Servicing Agreement shall mean any servicing agreement pursuant to which any Mortgage Assets are serviced.

Side Letter means the Second Amended and Restated Pricing Side Letter, dated as of April 14, 2006, among the Sellers, Guarantors
and Buyers.

Subsidiary means, with respect to any Person, any corporation, partnership or other entity of which at
least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other
entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person; provided, however, that for purposes of Section 18
hereof, Subsidiary shall not include any of the entities listed on Exhibit D hereto, which may be revised by Sellers from time to time upon consent of Buyers.

Substitute Assets has the meaning assigned thereto in Section 16(a).

Swap
Agreement means the ISDA master swap agreement between Wachovia Bank, National Association and NovaStar Mortgage, Inc. dated as of September 15, 2003.

Termination Date has the meaning assigned thereto in Section 27.

Total
Liabilities shall mean total liabilities of NFI and its consolidated Subsidiaries determined in accordance with GAAP (or with such non-GAAP principles as may be disclosed to and approved by Buyers from time to time) provided; for
purposes of this Agreement, such term shall not include $50,000,000 of any unsecured junior subordinated notes issued pursuant to the Indenture dated as of March 15, 2005 between NMI and JPMorgan Chase Bank, N.A.

Transaction has the meaning assigned thereto in Section 1.

Transaction Notice means a written request of the related Seller to enter into a Transaction, in the form attached hereto as Exhibit B
which is delivered to Buyers.

Trust Agreement shall mean each of the trust agreements pursuant to which an Asset-
Backed Security has been issued.

Trustee shall mean, as applicable, the entity designated as such pursuant to each
Trust Agreement.

Underwriting Standards means NMIs underwriting guidelines in effect as of the date of this
Agreement as the same may be amended from time to time.



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Uniform Commercial Code means the Uniform Commercial Code as in effect on the date
hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.

WL Master Repurchase
Agreement means that certain Second Amended and Restated Master Repurchase Agreement (Whole Loan), dated as of April 14, 2006, among Wachovia Bank, National Association, NFI Repurchase Corporation, NMI Repurchase Corporation,
Acceleron Lending, Inc., HomeView Lending, Inc., and NovaStar Certificates Financing Corporation, as amended from time to time.

Whole Loan Outstanding Balance means on any date of determination, the aggregate purchase price with respect to all mortgage loans subject to transactions under the WL Master Repurchase Agreement.

b. Interpretation.

Headings are for
convenience only and do not affect interpretation. The following rules of this subsection (b) apply unless the context requires otherwise. The singular includes the plural and conversely. A gender includes all genders. Where a word or phrase is
defined, its other grammatical forms have a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit is, unless otherwise specified, a reference to a Section of, or annex or exhibit to, this Agreement. A reference to a party to
this Agreement or another agreement or document includes the partys successors and permitted substitutes or assigns. A reference to an agreement or document is to the agreement or document as amended, modified, novated, supplemented or
replaced, except to the extent prohibited by any Program Document. A reference to legislation or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form. A reference to conduct includes, without limitation, an omission, statement or
undertaking, whether or not in writing. An Event of Default subsists until it has been waived in writing by the Buyers or has been timely cured. The words hereof, herein, hereunder and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement. The term including is not limiting and means including without limitation. In the computation of periods of time from a specified date to a later
specified date, the word from means from and including, the words to and until each mean to but excluding, and the word through means to and including. This
Agreement may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless the
context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied. References herein to
fiscal year and fiscal quarter refer to such fiscal periods of the related Seller. Except where otherwise provided in this Agreement any determination, statement or certificate by the Buyers or an authorized officer of the
Buyers provided for in this Agreement is conclusive and binds the parties in the absence of manifest error. A reference to an agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether or not in writing.
A reference to a document includes an agreement (as so defined) in writing or a certificate, notice, instrument



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or document, or any information recorded in computer disk form. Where the related Seller or a Guarantor is required to provide any document to the Buyers
under the terms of this Agreement, the relevant document shall be provided in writing or printed form unless the Buyers request otherwise. At the request of the Buyers, the document shall be provided in computer disk form or both printed and
computer disk form. This Agreement is the result of negotiations among and has been reviewed by counsel to the Buyers, Guarantors and the Sellers, and is the product of all parties. In the interpretation of this Agreement, no rule of construction
shall apply to disadvantage one party on the ground that such party proposed or was involved in the preparation of any particular provision of this Agreement or this Agreement itself. Except where otherwise expressly stated, the Buyers may give or
withhold, or give conditionally, approvals and consents, and may form opinions and make determinations at their absolute discretion. Any requirement of good faith, discretion or judgment by the Buyers shall not be construed to require Buyers to
request or await receipt of information or documentation not immediately available from or with respect to the related Seller, a Guarantor, a servicer of the Purchased Assets, any other Person or the Purchased Assets themselves.

3. THE TRANSACTIONS

a. The related Seller
shall repurchase Purchased Assets from the related Buyer on each related Repurchase Date. each obligation to repurchase subsists without regard to any prior or intervening liquidation or foreclosure with respect to each Purchased Asset. The related
Seller is obligated to obtain the Purchased Assets from Buyer or its designee at the related Sellers expense on (or after) the related Repurchase Date.

b. Provided that the applicable conditions in Sections 9(a) and (b) have been satisfied, each Purchased Asset that is repurchased by the related Seller on the 25th day of each month (or, if such 25th day is not a
Business Day, the immediately following Business Day) following the related initial Purchase Date (the day of the month so determined for each month, or any other date designated by the related Seller to the related Buyer for such a repurchase on at
least one Business Days prior notice to such Buyer, a Repurchase Date, which term shall also include the date determined by application of Section 19) shall automatically become subject to a new Transaction unless the related
Buyer is notified by the related Seller at least one (1) Business Day prior to any Repurchase Date, provided that if the Repurchase Date so determined is later than the Termination Date, the Repurchase Date for such Transaction shall
automatically reset the Termination Date, and the provisions of this sentence as it might relate to a new Transaction shall expire on such date for each new Transaction, unless otherwise agreed, (y) the accrued and unpaid Price Differential
shall be settled in cash on each related Repurchase Date, and (z) the Pricing Rate shall be as set forth in the Side Letter.

c. If
the related Seller repurchases Purchased Assets on any day which is not a Repurchase Date for such Purchased Assets, the related Seller shall indemnify the related Buyer and hold such Buyer harmless from any losses, costs and/or expenses which such
Buyer may sustain or incur arising from the reemployment of funds obtained by such Buyer hereunder or from fees payable to terminate the deposits from which such funds were obtained (Breakage Costs), in each case for the remainder of the
applicable 30 day period. The related Buyer shall deliver to the related Seller a statement setting forth the amount and basis of determination of any Breakage Costs in such detail as determined in good faith by such Buyer to be adequate, it



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being agreed that such statement and the method of its calculation shall be adequate and shall be conclusive and binding upon the related Seller, absent
manifest error. This Section shall survive termination of this Agreement and the repurchase of all Purchased Assets subject to Transactions hereunder.

4. ENTERING INTO TRANSACTIONS, TRANSACTION NOTICE CONFIRMATIONS

Under the terms and conditions of the Program
Documents, Buyers hereby agree to enter into Transactions with a Purchase Price up to the Maximum Aggregate Purchase Price. Unless otherwise agreed, the related Seller shall give Buyers notice of any proposed Purchase Date prior to 2:00 p.m. New
York City time on the preceding Business Day (the date on which such notice is so given, the Notice Date). On the Notice Date, the related Seller or a Guarantor shall request that Buyers enter into a Transaction by furnishing to Buyers a
Transaction Notice.

5. PAYMENT AND TRANSFER

Unless otherwise agreed, all transfers of funds hereunder shall be in immediately available funds and all Purchased Assets transferred shall be transferred to the related Buyer. Any Repurchase Price or Price
Differential received by a Buyer after 12:00 noon New York City time shall be applied on the next succeeding Business Day.

6. MARGIN MAINTENANCE

a. If at any time the aggregate Market Value of all Purchased Assets subject to all Transactions is less than the aggregate Buyers
Margin Amount for all such Transactions (a Margin Deficit), then the related Buyer may by notice to the related Seller require the related Seller in such Transactions to transfer to such Buyer cash so that the cash and aggregate Market
Value of the Purchased Assets will thereupon equal or exceed such aggregate Buyers Margin Amount (such requirement, a Margin Call).

b. Notice required pursuant to Section 6(a) may be given by any means provided in Section 35 hereof. Any notice given before 11 :00 a.m. New York time on a Business Day shall be met, and the related Margin Call satisfied, no later
than 5:00 p.m. New York time on such Business Day; notice given after 11:00 a.m. New York time on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. New York time on the following Business Day. The failure of
any Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of any Buyer to do so at a later date. The related Seller, each
Guarantor and each Buyer each agree that a failure or delay by any Buyer to exercise its rights hereunder shall not limit or waive any Buyers rights under this Agreement or otherwise existing by law or in any way create additional rights for
the related Seller or any Guarantor.

7. INCOME PAYMENTS

Where a particular term of a Transaction extends over the date on which Income is paid in respect of any Purchased Assets subject to that Transaction, such Income shall be paid directly to the related Buyer and be the
property of such Buyer; provided, however, that all such Income



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shall be applied by such Buyer to reduce the Obligations of Sellers hereunder. Notwithstanding the foregoing, each Buyer agrees that prior to the occurrence
of a Default, the related Seller shall be entitled to receive an amount equal to all Income received, whether by the Guarantor, any Buyer or any servicer or any other Person, which is not otherwise received by the related Seller, in respect of the
Purchased Assets minus an amount equal to the related Price Differential plus any Margin Deficit and any other amounts due to the related Buyer pursuant to this Agreement; provided, however, that any income received by or on behalf of the related
Seller while the related Transaction is outstanding shall be deemed held by the related Seller solely in trust for the related Buyer pending the repurchase on the related Repurchase Date.

8. SECURITY INTEREST

The related Seller and
related Buyer intend that the Transactions hereunder be sales to the related Buyer of the Purchased Assets and not loans from such Buyer to the related Seller secured by the Purchased Assets. However, in order to preserve the related Buyers
rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as other than sales, and as security for the related Sellers performance of all of its Obligations, the related Seller hereby
grants the related Buyer a fully perfected first priority security interest in the following property, whether now existing or hereafter acquired: the Purchased Assets, the related Records, the contractual right to receive payments, including the
right to payments of principal and interest and the right to enforce such payments arising from or under any of the Purchased Assets, the contractual right to service or arrange for the servicing of each Mortgage Asset to the extent, if any, the
related Seller has such rights, any servicing agreements with respect to each Mortgage Asset, including the rights of the related Seller, if any, under any Servicing Agreements to the extent such rights under the Servicing Agreements are assignable
by the related Seller, and any proceeds and distributions with respect to any of the foregoing (collectively the Collateral).

9.
CONDITIONS PRECEDENT

a. As conditions precedent to the initial Transaction, the related Buyer shall have received on or before
the day of such initial Transaction the following, in form and substance satisfactory to Buyer and duly executed by each party thereto:

(i) The Program Documents duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver;

(ii) Evidence that all other actions necessary or, in the opinion of the related Buyer, desirable to perfect and protect such Buyers
interest in the Purchased Assets and other Collateral have been taken, including, without limitation, duly executed and filed Uniform Commercial Code financing statements on Form UCC-1;

(iii) A certified copy of each Sellers and each Guarantors consents or corporate resolutions, as applicable, approving the
Program Documents and Transactions thereunder (either specifically or by general resolution), and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Program Documents;



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(iv) An incumbency certificate of the secretaries of each Seller and each Guarantor
certifying the names, true signatures and titles of each Sellers and each Guarantors representatives duly authorized to request Transactions hereunder and to execute the Program Documents and the other documents to be delivered
thereunder;

(v) An opinion of each Sellers and each Guarantors counsel as to such matters as the related Buyer
(including, without limitation, a corporate opinion, a New York enforceability opinion, a security interest opinion, an investment company opinion and a repurchase agreement under federal bankruptcy law opinion), may reasonably request
and in form and substance acceptable to such Buyer, including ;

(vi) A copy of the Underwriting Standards certified by an
officer of NMI;

(vii) The Guaranty;

(viii) All of the conditions precedent in the Guaranty shall have been satisfied; and

(ix) Any other documents reasonably requested by the related Buyer.

b. The obligation of any Buyer to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:

(i) The related Buyer or its designee shall have received on or before the day of a Transaction with respect to such Purchased Assets
(unless otherwise specified in this Agreement) the following, in form and substance satisfactory to such Buyer and (if applicable) duly executed:



| | (A) | Transaction Notice delivered pursuant to Section 4(a);
| | --- | ------------------------------------------------------



| | (B) | the definitive certificate representing ownership of such Purchased Asset in the name of the related Buyer or, if such Purchased Asset is registered on DTC or similar depository,
evidence satisfactory to such Buyer that the records of DTC or such depository show the Buyer as the beneficial ownership of such Purchased Asset;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | each Governing Agreement with respect to each Purchased Asset; and
| | --- | ------------------------------------------------------------------



| | (D) | such certificates, customary opinions of counsel or other documents as Buyer may reasonably request, provided that such opinions of counsel shall not be required in connection with
each Transaction but shall only be required from time to time as deemed necessary by the related Buyer in its good faith.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(ii) No Default or Event of Default shall have occurred and be continuing.

(iii) The
related Buyer shall not have reasonably determined that a change in any requirement of law or in the interpretation or administration of any requirement of



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law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for such Buyer to enter into
Transactions with a Pricing Rate based on LIBOR, unless Seller shall have elected pursuant to Section 15(a) hereof that the Pricing Rate for all Transactions be based upon the Prime Rate.

(iv) All representations and warranties in the Program Documents shall be true and correct on the date of such Transaction.

(v) The then aggregate outstanding Purchase Price for all Purchased Assets, when added to the Purchase Price for the requested
Transaction, shall not exceed the Maximum Aggregate Purchase Price.

(vi) No event or events shall have been reasonably
determined by the related Buyer to have occurred and be continuing resulting in the effective absence of a whole loan or asset-backed securities market.

(vii) If requested, the related Buyer shall have received satisfactory information regarding the hedging strategy, arrangements and general policy of the Guarantors with respect to hedge instruments.

(viii) Satisfaction of any conditions precedent to the initial Transaction as set forth in clause (a) of this Section 9 that
were not satisfied prior to such initial Purchase Date. In no event shall the Buyers be required to enter into more than one Transaction in any Purchase Day.

(ix) The Purchase Price for the requested Transaction shall not be less than $1,000,000 or an integral multiple of $500,000 thereafter.

(x) The related Buyer shall have determined that all actions necessary or, in the opinion of such Buyer, desirable to
maintain such Buyers perfected interest in the Purchased Assets and other Collateral have been taken, including, without limitation, duly executed and filed Uniform Commercial Code financing statements on Form UCC-1.

(xi) Buyers shall not be obligated to enter into more than one Transaction per month (excluding any automatic Transaction pursuant to
Section 3(b)).

(xii) Any other documents reasonably requested by the related Buyer.

(xiii) The aggregate Purchase Price with respect to Eligible Seasoned Residuals when added to the aggregate Purchase Price of all Eligible
Residuals (as defined in the 3YR Repurchase Agreement) outstanding under the 3YR Repurchase Agreement shall not exceed $200,000,000.

10. RELEASE OF
PURCHASED ASSETS

Upon timely payment in full of the Repurchase Price and all other Obligations owing with respect to a Purchased
Asset, if no Default or Event of Default has occurred and is



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continuing, Buyer shall release such Purchased Asset unless such release would give rise to or perpetuate a Margin Deficit. Except as set forth in Sections
6(a) and 16, the related Seller shall give at least three (3) Business Days prior written notice to Buyer if such repurchase shall occur on other than a Repurchase Date.

If such a Margin Deficit is applicable, Buyer shall notify the related Seller of the amount thereof and the related Seller may thereupon satisfy the
Margin Call in the manner specified in Section 6.

11. RELIANCE

With respect to any Transaction, the related Buyer may conclusively rely upon, and shall incur no liability to the related Seller or the Guarantor in
acting upon, any request or other communication that such Buyer reasonably believes to have been given or made by a person authorized to enter into a Transaction on the related Sellers or the Guarantors behalf.

12. REPRESENTATIONS AND WARRANTIES

Each
Seller and each Guarantor hereby represents and warrants, and shall on and as of the Purchase Date for any Transaction and on and as of each date thereafter through and including the related Repurchase Date be deemed to represent and warrant, that:

a. Due Organization and Qualification. Each Seller and each Guarantor is duly organized, validly existing and in
good standing under the laws of the jurisdiction under whose laws it is organized. Each Seller and each Guarantor is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and
approvals necessary for the conduct of its business as currently conducted and the performance of its obligations under the Program Documents, except to the extent any failure to be so qualified and in good standing or to obtain such a license,
permit, charter, registration or approval will not cause a Material Adverse Effect or impair the enforceability of any Purchased Asset.

b. Power and Authority. Each Seller and each Guarantor has all necessary power and authority to conduct its business as currently conducted, to execute, deliver and perform its obligations under the Program
Documents and to consummate the Transactions.

c. Due Authorization. The execution, delivery and performance of the
Program Documents by each Seller and each Guarantor have been duly authorized by all necessary action and do not require any additional approvals or consents or other action by or any notice to or filing with any Person other than any that have
heretofore been obtained, given or made.

d. Noncontravention. None of the execution and delivery of the Program
Documents by the related Seller or the related Guarantor or the consummation of the Transactions and transactions thereunder:



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i) conflicts with, breaches or violates any provision of any Sellers charter
documents, bylaws, operating agreement or any similar agreement, any material agreement of any Seller or the Guarantor or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having
applicability to the related Seller or the related Guarantor or its properties;

ii) constitutes a default by the related
Seller or the Guarantor under any loan or repurchase agreement, mortgage, indenture or other material agreement or instrument to which the related Seller or the related Guarantor is a party or by which it or any of its properties is or may be bound
or affected; or

iii) results in or requires the creation of any lien upon or in respect of any of the assets of the related
Seller or the related Guarantor except the lien relating to the Program Documents.

e. Legal Proceeding. There is no
action, proceeding or investigation by or before any court, governmental or administrative agency or arbitrator affecting any of the Purchased Assets, any Seller, any Guarantor or any of their Affiliates, pending or threatened, which is reasonably
likely to be adversely determined and which, if decided adversely, would have a Material Adverse Effect.

f. Valid and
Binding Obligations. Each of the Program Documents to which Sellers or any Guarantor is a party, when executed and delivered by Sellers or such Guarantor, as applicable, will constitute the legal, valid and binding obligations of the related
Seller or such Guarantor, as applicable, enforceable against the related Seller or such Guarantor, as applicable, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors rights generally and general equitable principles.

g.
Financial Statements. The financial statements of NFI, copies of which have been furnished to Buyers, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present
fairly the financial condition and results of operations of NFI as of the dates and for the periods indicated and (iii) have been prepared in accordance with GAAP consistently applied, except as noted therein (subject as to interim statements
to normal year-end adjustments). Since the date of the most recent financial statements, there has been no Material Adverse Change with respect to NFI. Except as disclosed in such financial statements, no Guarantor is subject to any contingent
liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Change with respect to such Guarantor.

h. Accuracy of Information. None of the documents or information prepared by or on behalf of Sellers or any Guarantor and provided
by Sellers or any Guarantor to Buyers relating to Sellers or the Guarantors financial condition contain any statement of a material fact with respect to Sellers or any Guarantor or the Transactions that was untrue or misleading in any
material respect when made. Since the most recent



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furnishing of such documents or information, there has been no change, nor any development or event involving a prospective change known to Sellers or any
Guarantor, that would render any of such documents or information untrue or misleading in any material respect.

i. No
Consents. No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency, or other governmental, instrumentality, nor any consent, approval, waiver or notification of
any creditor, lessor or other non-governmental person, is required in connection with the execution, delivery and performance by Sellers or any Guarantor of this Agreement or the consummation by Sellers or any Guarantor of any other Program
Document, other than any that have heretofore been obtained, given or made.

j. Compliance With Law, Etc. No
practice, procedure or policy employed or proposed to be employed by Sellers or any Guarantor in the conduct of its businesses violates any law, regulation, judgment, agreement, order or decree applicable to it which, if enforced, would result in
either a Material Adverse Change with respect to Sellers or any Guarantor or a Material Adverse Effect.

k. Solvency:
Fraudulent Conveyance. Each Seller and each Guarantor is solvent and will not be rendered insolvent by the Transaction and, after giving effect to such Transaction, neither Sellers nor any Guarantor will be left with an unreasonably small amount
of capital with which to engage in its business. Neither Sellers nor any Guarantor intends to incur, nor believes that it has incurred, debts beyond its ability to pay such debts as they mature. Neither Sellers nor any Guarantor is contemplating the
commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of Sellers or any Guarantor or any of their assets. The amount of
consideration being received by Sellers upon the sale of the Purchased Assets to Buyers constitutes reasonably equivalent value and fair consideration for such Purchased Assets. Sellers are not transferring any Purchased Assets with any intent to
hinder, delay or defraud any of its creditors.

l. Investment Company Act Compliance. Each Seller is not required to
be registered as an investment company as defined under the Investment Company Act nor as an entity under the control of an investment company as defined under the Investment Company Act.

m. Taxes. Each Seller and each Guarantor has filed all federal and state tax returns which are required to be filed and paid all
taxes, including any assessments received by it, to the extent that such taxes have become due (other than for taxes that are being contested in good faith or for which it has established adequate reserves). Any taxes, fees and other governmental
charges payable by the Sellers or any Guarantor in connection with a Transaction and the execution and delivery of the Program Documents have been paid.



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n. Additional Representation. With respect to each Purchased Asset, the related
Seller hereby makes all of the applicable representations and warranties set forth in each Confirmation to which such Purchased Asset is or has been subject, in each case as of the related Purchase Date, and the related Seller understands that if
the substance of any such representation or warranty ceases to be true because of events occurring after such date, the Market Value could be adversely affected.

o. No Broker. Neither any Seller nor any Guarantor has dealt with any broker, investment banker, agent, or other person, except for
Buyers, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement; provided, that if Sellers or any Guarantor has dealt with any broker, investment banker, agent, or other
person, except for Buyers, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement, such commission or compensation shall have been paid in full by the related Seller or such
Guarantor, as applicable.

p. Corporate Separateness.

(i) The capital of Sellers and each Guarantor is adequate for the respective business and undertakings of Sellers and each Guarantor.

(ii) Other than as provided in this Agreement and the other Program Documents, Sellers are not engaged in any business
transactions with any Guarantor or any of its Affiliates other than transactions in the ordinary course of its business on an arms-length basis.

(iii) The funds and assets of each Seller is not and will not be, commingled with the funds of any other Person.

q. Hedging. Each Seller has entered into the hedge instruments pursuant to its customary hedging procedures.

r. Governing Agreements. Each Governing Agreement is in full force and effect and has not been modified, amended or supplemented
except for any modifications, amendments and supplements approved by Buyers.

The representations and warranties set forth in this
Agreement shall survive transfer of the Purchased Assets to Buyers and shall continue for so long as the Purchased Assets are subject to this Agreement.

13. COVENANTS OF SELLERS AND GUARANTOR

Each Seller and each Guarantor, as applicable, hereby covenants with Buyers
as follows:

a. Defense of Title. Each Seller and each Guarantor warrants and will defend the right, title and
interest of Buyers in and to all Collateral against all adverse claims and demands.



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b. No Amendment or Compromise. Without Buyers prior written consent, neither
any Seller, any Guarantor nor those acting on any Sellers or any Guarantors behalf shall amend or modify, or waive any term or condition of, or settle or compromise any claim in respect of, any item of the Purchased Assets, any related
rights or any of the Program Documents.

c. No Assignment. Except as permitted herein, neither any Seller nor any
Guarantor shall sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Documents), any of the
Purchased Assets or any interest therein, provided that this Section shall not prevent any transfer of Purchased Assets in accordance with the Program Documents.

d. Reserved.

e. Preservation of Collateral: Collateral Value. Each Seller and each Guarantor shall do all things necessary to preserve the Collateral so that it remains subject to a first priority perfected security interest hereunder. Without
limiting the foregoing, each Seller and each Guarantor will comply with all rules, regulations and other laws of any Governmental Authority necessary to preserve the Collateral so that it remains subject to a first priority perfected security
interest hereunder. Neither any Seller nor any Guarantor will allow any default for which any Seller or any Guarantor is responsible to occur under any Collateral or any Program Documents and each Seller and each Guarantor shall fully perform or
cause to be performed when due all of its obligations under any Collateral or the Program Documents.

f. Maintenance of
Papers, Records and Files. Each Seller and each Guarantor shall require, and each Seller or the Guarantors of the Purchased Assets shall build, maintain and have available, a complete file in accordance with lending industry custom and practice
for each Purchased Asset. Each Seller or the Guarantors of the Purchased Assets will maintain all such Records not in the possession of Buyers in good and complete condition in accordance with industry practices and preserve them against loss.

(i) Each Seller and each Guarantor shall collect and maintain or cause to be collected and maintained all Records relating
to the Purchased Assets in accordance with industry custom and practice, including those maintained pursuant to the preceding subsection, and all such Records shall be in Buyers possession unless Buyers otherwise approves.

(ii) For so long as any Buyer has an interest in or lien on any Purchased Asset, each Seller and each Guarantor will hold or cause to be
held all related Records in trust for such Buyer. Each Seller or each Guarantor shall notify, or cause to be notified, every other party holding any such Records of the interests and liens granted hereby.

(iii) Upon reasonable advance notice from the related Buyer, each Seller and each Guarantor shall (x) make any and all such Records
available to such Buyer to



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examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof,
(y) permit such Buyer or its authorized agents to discuss the affairs, finances and accounts of each Seller or such Guarantor with its respective chief operating officer and chief financial officer and to discuss the affairs, finances and
accounts of each Seller or such Guarantor with its independent certified public accountants.

g. Financial Statements:
Accountants Reports: Other Information. Each Seller and each Guarantor shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased
Assets to the related Buyer. Each Seller and NFI shall furnish or cause to be furnished to Buyers the following:

i)
Financial Statements. (x) As soon as available and in any event within 90 days after the end of each fiscal year, the consolidated and consolidating, audited balance sheets of NFI as of the end of each fiscal year of NFI, and the audited
financial statements of income and changes in equity of NFI, and the audited statement of cash flows of NFI and each Seller, for such fiscal year and (y) as soon as available and in any event within 45 days after the end of each quarter, the
consolidated and consolidating, unaudited balance sheets of NFI as of the end of each quarter, and the unaudited financial statements of income and changes in equity of NFI and the unaudited statement of cash flows of NFI for the portion of the
fiscal year then ended, and (z) within 30 days after the end of each month, monthly consolidated and consolidating and unaudited statements (excluding cash flow statements) and balance sheets as provided in clause (y), all of which have been
prepared in accordance with GAAP (subject, in the case of interim statements, to normal year-end adjustments) and certified by NFIs treasurer.

ii) Monthly Certification. Each Seller shall execute and deliver a monthly certification substantially in the form of Exhibit A-1 attached hereto and NFI shall execute and deliver a monthly certification
substantially in the form of Exhibit A-2 attached hereto.

h. Notice of Material Events. Each Seller and each
Guarantor shall promptly inform Buyers in writing of any of the following:

i) any Default, Event of Default or default or
breach by any Seller or any Guarantor of any other material obligation under any Program Document, or the occurrence or existence of any event or circumstance that any Seller or such Guarantor reasonably expects will with the passage of time become
a Default, Event of Default or such a default or breach by any Seller or any Guarantor;

ii) any material change in the
insurance coverage required of any Seller or any Guarantor or any other Person pursuant to any Program Document, with copy of evidence of same attached;



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iii) any material dispute, litigation, investigation, proceeding or suspension between
any Seller or any Guarantor, on the one hand, and any Governmental Authority or any other Person;

iv) any material change
in accounting policies or financial reporting practices of any Seller or any Guarantor;

v) the occurrence of any material
employment dispute and a description of the strategy for resolving it; and

vi) any event, circumstance or condition that
has resulted, or has a reasonable possibility of resulting, in either a Material Adverse Change with respect to any Seller or any Guarantor or a Material Adverse Effect.

i. Maintenance of Licenses. Except as would not be reasonably likely to have a Material Adverse Effect, (i) each Seller and
each Guarantor shall maintain, all material licenses, permits or other approvals necessary for each Seller and each Guarantor to conduct its business and to perform its obligations under the Program Documents, and (ii) each Seller and each
Guarantor shall conduct its business in accordance with applicable law.

j. No Withholdings for Taxes. Any payments
made by the related Seller to any Buyer shall be free and clear of, and without deduction or withholding for, any taxes; provided, however, that if the related Seller shall be required by law to deduct or withhold any taxes from any sums payable to
such Buyer, then the related Seller shall (A) make such deductions or withholdings and pay such amounts to the relevant authority in accordance with applicable law, (B) pay to such Buyer the sum that would have been payable had such
deduction or withholding not been made, and (C) at the time the Price Differential is paid, pay to such Buyer all additional amounts as specified by such Buyer to preserve the after-tax yield such Buyer would have received if such tax had not
been imposed. This provision does not apply to income taxes payable by such Buyer on its taxable income.

k. Change in
Nature of Business. Neither any Seller nor any Guarantor shall make any material adverse change in the nature of its business as a mortgage originator and servicer as such business is carried on at the date hereof.

l. Limitation on Distributions. If an Event of Default has occurred and is occurring, neither any Seller nor any Guarantor shall
pay any dividends or distributions with respect to any capital stock or other equity interests in any Seller or any Guarantor (except any dividends or distributions required by law in order for such party to maintain its status as a real estate
investment trust), whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Seller or any Guarantor.

m. Merger of Guarantor. No Guarantor shall at any time, directly or indirectly, without Buyers prior consent
(i) liquidate or dissolve or enter into any consolidation or merger or be subject to a Change in Control; (ii) form or enter into any



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partnership, joint venture, syndicate or other combination which would have a Material Adverse Effect; or (iii) make any Material Adverse Change with
respect to such Guarantor or such Guarantors Subsidiaries.

n. Insurance. Each Seller will obtain and maintain
insurance with responsible companies in such amounts and against such risks as are customarily carried by business entities engaged in similar businesses similarly situated, and will furnish Buyers on request full information as to all such
insurance, and provide within (15) days after receipt of such request the certificates or other documents evidencing renewal of each such policy.

o. Affiliate Transactions. Neither any Seller nor any Guarantor will at any time, directly or indirectly, sell, lease or otherwise transfer any material property or assets to, or otherwise acquire any material
property or assets from, or otherwise engage in any material transactions with, any of their Non-Seller Affiliates unless the terms thereof are no less favorable to the related Seller or such Guarantor, as applicable, than those that could be
obtained at the time of such transaction in an arms length transaction with a Person who is not an Affiliate.

p.
Change of Fiscal Year. Neither any Seller nor any Guarantor will at any time, directly or indirectly, except upon thirty (30) days prior written notice to Buyers, change the date on which the related Sellers or such
Guarantors fiscal year begins from the related Sellers or such Guarantors current fiscal year beginning date.

q. Underwriting Standards. NMI shall not permit any material modifications to be made to the Underwriting Standards without prior notice to the Buyers.

r. Excluded Subsidiaries. No material change in the nature of the business including without limitation, capitalization or change
in significant investors shall occur for any Subsidiaries listed on Exhibit D, without thirty (30) days prior written notice to the Buyers.

14.
REPURCHASE DATE PAYMENTS/COLLECTIONS

On each Repurchase Date, the related Seller shall remit or shall cause to be remitted to
the related Buyer the Repurchase Price.

15. CHANGE OF LAW

a. If the related Buyer determines that the introduction of, any change in, or the interpretation or administration of any requirement of law has made it unlawful or commercially impracticable to engage in any
Transactions with a Pricing Rate based on LIBOR, then the related Seller (i) shall, upon its receipt of notice of such fact and demand from the related Buyer, repurchase the Purchased Assets subject to the Transaction on the next succeeding
Business Day and, at the related Sellers election, concurrently enter into a new Transaction with Buyer with a Pricing Rate based on the Prime Rate plus the margin set forth in the Side Letter as part of the Pricing Rate and (ii) may
elect, by giving notice to such Buyer, that all new Transactions shall have Pricing Rates based on the Prime Rate plus such margin.



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b. If the related Buyer determines in its sole discretion that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Buyers capital or on the capital of any Affiliate of such Buyer as a consequence of such Change in Law on this Agreement, then from time to time the related
Seller will compensate Buyer or Buyers Affiliate, as applicable, for such reduced rate of return suffered as a consequence of such Change in Law on terms similar to those imposed by Buyers on its other similarly affected customers. The related
Buyer shall provide the related Seller with prompt notice as to any Change in Law. Notwithstanding any other provisions in this Agreement, in the event of any such Change in Law, the related Seller will have the right to terminate all Transactions
then outstanding without any prepayment penalty as of a date selected by the related Seller, which date shall be prior to the then applicable Repurchase Date and which date shall thereafter for all purposes hereof be deemed to be the Repurchase
Date.

16. SUBSTITUTION

a. The
related Seller may, subject to agreement with and acceptance by the related Buyer, substitute other assets which are substantially the same as the Purchased Assets (the Substitute Assets) for any Purchased Assets. Such substitution shall
be made by transfer to the related Buyer of such other Substitute Assets and transfer to the related Seller of such Purchased Assets. After substitution, the Substitute Assets shall be deemed to be Purchased Assets.

b. In the case of any Transaction for which the Repurchase Date is other than the Business Day immediately following the Purchase Date and with respect
to which the related Seller does not have any existing right to Substitute Assets for the Purchased Assets, the related Seller shall have the right, subject to the proviso to this sentence, upon notice to the related Buyer, which notice shall be
given at or prior to 10 a.m. (New York City time) on the second preceding Business Day, to Substitute Assets for any Purchased Assets; provided, however, that the related Buyer may elect, by the close of business on the Business Day following which
such notice is received, or by the close of the next Business Day if notice is given after 10 a.m. (New York City time) on such day, not to accept such substitution. In the event such substitution is accepted by the related Buyer, such substitution
shall be made by the related Sellers transfer to such Buyer of such Substitute Assets and Buyers transfer to the related Seller of such Purchased Assets, and after such substitution, the Substitute Assets shall be deemed to be Purchased
Assets. In the event the related Buyer elects not to accept such substitution, such Buyer shall offer the related Seller the right to terminate the Transaction.

c. In the event the related Seller exercises its right to substitute or terminate under subsection (b), the related Seller shall be obligated to pay to the related Buyer, by the close of the Business Day of such
substitution, as the case may be, an amount equal to (A) such Buyers actual cost in bona fide third party transactions (including all fees, expenses and commissions) of (i) entering into replacement transactions; (ii) entering
into or terminating hedge transactions; and/or (iii) terminating transactions or substituting securities in like transactions with third parties in connection with or as a result of such substitution or termination, and (B) to the extent
such Buyer determines not to enter into replacement transactions, the Breakage Costs incurred by such Buyer directly arising or resulting from such substitution or termination.



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17. REPURCHASE TRANSACTIONS

Each Buyer may, in its sole election, engage in repurchase transactions with the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets with a counterparty of such
Buyers choice, in all cases subject to such Buyers obligation to reconvey the Purchased Assets (and not substitutes therefor) on the Repurchase Date. In the event Buyer engages in a repurchase transaction with any of the Purchased Assets
or otherwise pledges or hypothecates any of the Purchased Assets, Each Buyer shall have the right to assign to such Buyers counterparty any of the applicable representations or warranties with respect to the Purchased Assets hereunder and the
remedies for breach thereof, as they relate to the Purchased Assets that are subject to such repurchase transaction.

18. EVENTS OF DEFAULT

With respect to any Transactions covered by or related to this Agreement, the occurrence of any of the following events shall constitute an
Event of Default:

a. any Seller fails to transfer the Purchased Assets to the related Buyer on the applicable Purchase Date
(provided such Buyer has tendered the related Purchase Price);

b. any Seller either fails to repurchase the Purchased Assets on the
applicable Repurchase Date or fails to perform its obligations under Section 6;

c. either any Seller or a Guarantor shall fail to
perform, observe or comply with any other material term, covenant or agreement contained in the Program Documents and such failure is not cured within the time period expressly provided or, if no such cure period is provided, within two
(2) Business Days of the earlier of (i) such partys receipt of written notice from the Buyers of such breach or (ii) the date on which such party obtains notice or knowledge of the facts giving rise to such breach;

d. any representation or warranty made by any Seller or a Guarantor (or any of any Sellers or such Guarantors officers) in the Program
Documents or in any other document delivered in connection therewith shall have been incorrect or untrue in any material respect when made or repeated or to have been made or repeated;

e. any Seller, any Guarantor, or any of any Sellers or any Guarantors Subsidiaries shall fail to pay any of any Sellers, such
Guarantors or any Sellers or such Guarantors Subsidiaries Indebtedness, or any interest or premium thereon when due (whether by scheduled maturity, requirement prepayment, acceleration, demand or otherwise), or shall fail to
make any payment when due under any Sellers, such Guarantors or any Sellers or such Guarantors Subsidiaries Guarantee of another persons Indebtedness for borrowed money, and such failure shall entitle any related
counterparty to declare any such Indebtedness or Guarantee to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof provided that such Indebtedness is in excess
of (i) $5,000,000 with respect to the Guarantor and (ii) $1,000,000 with respect to all other parties referenced in this subsection (e) and such failure is not cured within two (2) Business Days;



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f. a custodian, receiver, conservator, liquidator, trustee, sequestrator or similar official for any
Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries, or of any of any Sellers, a Guarantors or their respective Property (as a debtor or creditor protection procedure), is appointed or takes possession of
such property; or any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries generally fails to pay any Sellers, such Guarantors or any Sellers or such Guarantors Subsidiaries debts as they
become due; or any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries is adjudicated bankrupt or insolvent; or an order for relief is entered under the Federal Bankruptcy Code, or any successor or similar applicable
statute, or any administrative insolvency scheme, against any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries; or any of any Sellers, Guarantors or any Sellers or a Guarantors
Subsidiaries Property is sequestered by court or administrative order; or a petition is filed against any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, moratorium, delinquency or liquidation law of any jurisdiction, whether now or subsequently in effect;

g. any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries files a voluntary petition in bankruptcy seeks relief under any provision of any bankruptcy, reorganization, moratorium,
delinquency, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or subsequently in effect; or consents to the filing of any petition against it under any such law; or consents to the
appointment of or taking possession by a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official for any Seller, any Guarantor or any of any Sellers or any Guarantors Subsidiaries, or of all or any part of
any Sellers, any Guarantors or any Sellers or any Guarantors Subsidiaries Property; or makes an assignment for the benefit of any Seller, any Guarantor or any Sellers or any Guarantors Subsidiaries
creditors;

h. any final, nonappealable judgment or order for the payment of money in excess of (i) $5,000,000 with respect to the
Guarantor and (ii) $1,000,000 with respect to all other parties referenced in this subsection (h), in the aggregate (to the extent that it is, in the reasonable determination of Buyers, uninsured and provided that any insurance or other credit
posted in connection with an appeal shall not be deemed insurance for these purposes) shall be rendered against any Seller, the Guarantor or any of Sellers or Guarantors Affiliates and Subsidiaries by one or more courts, administrative
tribunals or other bodies having jurisdiction over them and the same shall not be discharged (or provisions shall not be made for such discharge), satisfied, or bonded, or a stay of execution thereof shall not be procured, within sixty
(60) days from the date of entry thereof and any Seller, the Guarantor or any of Sellers or Guarantors Affiliates and Subsidiaries, as applicable, shall not, within said period of sixty (60) days, appeal therefrom and cause the
execution thereof to be stayed during such appeal;

i. any Governmental Authority or any person, agency or entity acting or purporting to
act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of any Seller, any Guarantor or any of any Sellers or any
Guarantors Subsidiaries, or shall have taken any action to displace the management of any Seller, any Guarantor or any of any Sellers or any Guarantors Subsidiaries or to materially curtail its authority in the conduct of the
business of any Seller, any Guarantor or any of any Sellers or any Guarantors Subsidiaries, or takes any



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action in the nature of enforcement to remove or materially limit or restrict the approval of any Seller, any Guarantor or any of any Sellers or any
Guarantors Subsidiaries as an issuer, buyer or a seller/servicer of the Purchased Assets or similar securities;

j. any Seller, any
Guarantor or any of any Sellers or any Guarantors Subsidiaries shall default under, or fail to perform as requested under, or shall otherwise breach the material terms of any instrument, agreement or contract relating to Indebtedness,
and such default, failure or breach shall entitle any counterparty to declare an amount of such Indebtedness in excess of (i) $5,000,000 with respect to the Guarantor and (ii) $1,000,000 with respect to all other parties referenced in this
subsection (j), to be due and payable prior to the maturity thereof;

k. in the reasonable good faith judgment of Buyers any Material
Adverse Change shall have occurred with respect to any Seller, a Guarantor or any of any Sellers or a Guarantors Subsidiaries taken as a whole;

l. any Seller or any Guarantor shall admit in writing its inability to, or intention not to, perform any of any Sellers or such Guarantors respective material Obligations;

m. any Seller or any Guarantor dissolves, merges or consolidates with another entity, or sells, transfers, or otherwise disposes of a material portion of
any Sellers or such Guarantors (as applicable) business or assets (other than pursuant to a securitization or similar transaction in the ordinary course of business) unless Buyers written consent is given;

n. this Agreement shall for any reason cease to create a valid, first priority security interest or ownership interest upon transfer in any material
portion of the Purchased Assets or Collateral purported to be covered hereby;

o. either any Sellers or any Guarantors audited
annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of any Seller or such Guarantor as a going concern or a reference of similar
import;

p. a Change in Control of any Guarantor shall have occurred which has not been approved by Buyers;

q. the ratio of NFIs Adjusted Tangible Net Worth to Required Equity at any date is less than 1.0:1.0;

r. the Adjusted Tangible Net Worth of NFI is less than the sum of (i) $300,000,000, plus (ii) eighty percent (80%) of all contributions to
equity capital of NFI, its consolidated Subsidiaries or its unconsolidated Affiliates (which contributions are made by Persons other than NFI, its consolidated Subsidiaries or its unconsolidated Affiliates) after September 30,2005;

s. any (a) termination by any Seller of any Servicer or subservicer or the Mortgage Assets without the prior written consent of the related Buyer
to the extent any Sellers consent is required for such termination or (b) amendment of any Servicing Agreement without the prior written consent of the related Buyer to the extent any Sellers consent is required for such
occurrences, (c) failure by any Seller (if it is the Servicer) or any Servicer to service the Mortgage Assets in accordance with (i) industry standards for similar loans with third parties or (ii) the standards set forth in the
Servicing Agreement; and



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t. any event of default has occurred under any Servicing Agreement, any Indenture, any Trust Agreement or
the Guaranty.

u. the amount of NFIs liquidity (defined as the aggregate amount of NFIs cash plus amount available under
warehouse financing facility, but only to the extent that NFI has unencumbered assets to pledge thereunder and further adjusted by taking into account any applicable haircuts) as of any date is less than $15,000,000.

v. any event of default under the Swap Agreement, the NMI Repurchase Agreement, the NCI Repurchase Agreement or WL Master Repurchase Agreement.

19. REMEDIES

Upon the
occurrence of an Event of Default, each Buyer, at its option, shall have any or all of the following rights and remedies, which may be exercised by such Buyer in good faith:

a. The Repurchase Date for each Transaction hereunder shall be deemed immediately to occur.

b. The related Sellers obligations hereunder to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date in such
Transactions shall thereupon become immediately due and payable; all Income paid after such exercise or deemed exercise shall be retained by the related Buyer and applied to the aggregate Repurchase Prices and any other amounts owing by the related
Seller hereunder; the related Seller and each Guarantor shall immediately deliver to the related Buyer or its designee any and all original papers, records and files relating to the Purchased Assets subject to such Transaction then in any
Sellers and any Guarantors possession and/or control; and all right, title and interest in and entitlement to such Purchased Assets thereon shall be deemed transferred to the related Buyer.

Each Buyer may (A) sell, on or following the Business Day following the date on which the Repurchase Price became due and payable pursuant to
Section 19(b) without notice or demand of any kind, at a public or private sale and at such price or prices as such Buyer may reasonably deem satisfactory any or all Purchased Assets or (B) in its sole discretion elect, in lieu of selling
all or a portion of such Purchased Assets, to give the related Seller credit for such Purchased Assets in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the
related Seller hereunder. The related Seller shall remain liable to the related Buyer for any amounts that remain owing to such Buyer following a sale or credit under the preceding sentence. The proceeds of any disposition of Purchased Assets shall
be applied first to the reasonable costs and expenses incurred by the Buyers in connection with or as a result of an Event of Default; second to Breakage Costs, costs of cover and/or related hedging transactions; third to the aggregate Repurchase
Prices; and fourth to all other Obligations.

The parties recognize that it may not be possible to purchase or sell all of the Purchased
Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same



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manner because the market for such Purchased Assets may not be liquid. In view of the nature of the Purchased Assets, the parties agree that liquidation of a
Transaction or the underlying Purchased Assets does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, the Buyers may elect the
time and manner of liquidating any Purchased Asset and nothing contained herein shall obligate Buyers to liquidate any Purchased Asset on the occurrence of an Event of Default or to liquidate all Purchased Assets in the same manner or on the same
Business Day or constitute a waiver of any right or remedy of any Buyer. Notwithstanding the foregoing, the parties to this Agreement agree that the Transactions have been entered into in consideration of and in reliance upon the fact that all
Transactions hereunder constitute a single business and contractual obligation and that each Transaction has been entered into in consideration of the other Transactions.

In addition to its rights hereunder, each Buyer shall have the right to proceed against any of the related Sellers assets which may be in the possession of any Buyer, any of Buyers Affiliates or its
designee, including the right to liquidate such assets and to set-off the proceeds against monies owed by the related Seller to any Buyer pursuant to this Agreement. Each Buyer may set off cash, the proceeds of the liquidation of the Purchased
Assets and Additional Purchased Assets, any other Collateral or its proceeds and all other sums or obligations owed by such Buyer to the related Seller hereunder against all of the related Sellers Obligations to such Buyer, whether under this
Agreement, under a Transaction, or under any other agreement between the parties, or otherwise, whether or not such Obligations are then due, without prejudice to such Buyers right to recover any deficiency.

Each Buyer may direct all Persons servicing the Purchased Assets to take such action with respect to the Purchased Assets as Buyer determines
appropriate.

The related Seller shall be liable to the Buyers for the amount of all expenses (plus interest thereon at a rate equal to the
Default Rate), and Breakage Costs and all costs and expenses incurred within 30 days of the Event of Default in connection with hedging or covering transactions related to the Purchased Assets.

Each Seller and each Guarantor shall cause all sums received by it with respect to the Purchased Assets to be remitted to the related Buyer (or such
other Person as such Buyer may direct) after receipt thereof.

Each Buyer shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession of and protect, collect, manage, liquidate, and sell the Purchased Assets and any other Collateral or any portion thereof,
collect the payments due with respect to the Purchased Assets and any other Collateral or any portion thereof, and do anything that the Buyers are authorized hereunder to do. The related Seller shall pay all costs and expenses incurred by the Buyers
in connection with the appointment and activities of such receiver.

Each Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and the related Seller hereby expressly waives, to the extent permitted by law, any right the related Seller might otherwise have to require any Buyer to enforce its rights by judicial



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process. The related Seller also waives, to the extent permitted by law, any defense the related Seller might otherwise have to the Obligations, arising from
use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Assets and any other Collateral or from any other election of remedies. The related Seller recognizes that nonjudicial remedies are consistent with the usages of
the trade, are responsive to commercial necessity and are the result of a bargain at arms length.

In addition to all the rights and
remedies specifically provided herein, each Buyer shall have all other rights and remedies provided by applicable federal, state, foreign, and local laws, whether existing at law, in equity or by statute.

Upon the occurrence of an Event of Default, each Buyer shall have, except as otherwise expressly provided in this Agreement, the right to exercise any of
its rights and/or remedies without presentment, demand, protest or further notice of any kind other than as expressly set forth herein, all of which are hereby expressly waived by the related Seller.

The related Seller hereby authorizes each Buyer, at the related Sellers expense, to file such financing statement or statements relating to the
Purchased Assets and the Collateral without the related Sellers signature thereon as such Buyer at its option may deem appropriate, and appoints each Buyer as the related Sellers attorney-in-fact to execute any such financing statement
or statements in the related Sellers name and to perform all other acts which such Buyer deems appropriate to perfect and continue the lien and security interest granted hereby and to protect, preserve and realize upon the Purchased Assets and
the Collateral, including, but not limited to, the right to endorse notes, complete blanks in documents and execute assignments on behalf of the related Seller as its attorney-in-fact. This power of attorney is coupled with an interest and is
irrevocable without the related Buyers consent.

20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

No failure on the part of any Buyer to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by any Buyer of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of the Buyers provided for herein
are cumulative and in addition to any and all other rights and remedies provided by law, the Program Documents and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by Buyer to
exercise any of its rights under any other related document. Each Buyer may exercise at any time after the occurrence of an Event of Default one or more remedies, as it so desires, and may thereafter at any time and from time to time exercise any
other remedy or remedies.

21. USE OF EMPLOYEE PLAN ASSETS

No assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974, as amended (ERISA) shall be used by either party hereto in a Transaction.



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22. INDEMNITY

a. The related Seller agrees to pay on demand (i) all reasonable out-of-pocket costs and expenses of Buyers in connection with the preparation, execution, delivery, modification and amendment of this Agreement
(including, without limitation, (A) all collateral review and UCC search and filing fees and expenses and (B) the reasonable fees and expenses of counsel for Buyers with respect to advising Buyers as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under this Agreement, with respect to negotiations with the related Seller or with other creditors of the related Seller or any of its Subsidiaries arising out of any-Default or any
events or circumstances that may arise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors rights generally and any
proceeding ancillary thereto); and (ii) all costs and expenses of Buyers in connection with the enforcement of this Agreement, whether in any action, suit or litigation, any bankruptcy, insolvency or other similar proceeding affecting
creditors rights generally (including, without limitation, the reasonable fees and expenses of counsel for Buyers) whether or not the transactions contemplated hereby are consummated.

b. The related Seller agrees to indemnify and hold harmless each Buyer and each of its respective Affiliates and their officers, directors, employees,
agents and advisors (each, an Indemnified Party) from and against (and will reimburse each Indemnified Party as the same is incurred) any and all claims, damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel and allocated costs of internal counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or other proceeding (whether or not such Indemnified Party is a party thereto) relating to, resulting from or arising out of any of the Program Documents and all other documents related
thereto, any breach of a representation or warranty of any Seller or any Guarantor or any Sellers or any Guarantors officers in this Agreement or any other Program Document, and all actions taken pursuant thereto) (i) the
Transactions, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition or (ii) the actual or alleged
presence of hazardous materials on any Property or any environmental action relating in any way to any Property, except to the extent such claim, damage, class, liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Partys gross negligence or willful misconduct or is the result of a claim made by any Seller or any Guarantor against the Indemnified Party, and the related Seller or such Guarantor
is ultimately the successful party in any resulting litigation or arbitration. The related Seller also agrees not to assert any claim against any Buyer or any of its Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the
transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.



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c. Without limitation on the provisions of Section 4, if any payment of the Repurchase Price of any
Transaction is made by the related Seller other than on the then scheduled Repurchase Date thereto as a result of an acceleration of the Repurchase Date pursuant to Section 19 or for any other reason, the related Seller shall, except as
otherwise provided in Sections 15 and 24, upon demand by the related Buyer, pay to such Buyer any Breakage Costs incurred as of a result of such payment.

d. If the related Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, reasonable fees and expenses of counsel and indemnities, such
amount may be paid on behalf of the related Seller by the related Buyer, in its sole discretion.

e. Without prejudice to the survival of
any other agreement of the related Seller hereunder, the easements and obligations of the related Seller contained in this Section shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the
Purchased Assets by Buyers against full payment therefor.

23. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

The related Seller hereby expressly waives, to the fullest extent permitted by law, every statute of limitation on a deficiency judgment, any reduction in
the proceeds of any Purchased Assets as a result of restrictions upon any Buyer contained in the Program Documents or any other instrument delivered in connection therewith, and any right that it may have to direct the order in which any of the
Purchased Assets shall be disposed of in the event of any disposition pursuant hereto.

24. REIMBURSEMENT

All sums reasonably expended by Buyers in connection with the exercise of any right or remedy provided for herein shall be and remain the related
Sellers obligation. The related Seller agrees to pay, with interest at the Default Rate to the extent that an Event of Default has occurred, the reasonable out-of-pocket expenses and reasonable attorneys fees incurred by Buyers in
connection with the preparation, enforcement or administration of the Program Documents, the taking of any action, including legal action, required or permitted to be taken by Buyers (without duplication to Buyers) pursuant thereto, any due
diligence or loan agent reviews conducted by Buyers or on their behalf or by refinancing or restructuring in the nature of a workout. If Buyers determine that, due to the introduction of, any change in, or the compliance by Buyers
with (i) any eurocurrency reserve requirement or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be an
increase in the cost to Buyers in engaging in the present or any future Transactions, then the related Seller agrees to pay to Buyers, from time to time, upon demand by Buyers the actual cost of additional amounts as specified by Buyers to
compensate Buyers for such increased costs.

Notwithstanding any other provisions in this Agreement, in the event of any such change in the
eurocurrency reserve requirement or the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority, the related Seller



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will have the right to terminate all Transactions then outstanding as of a date selected by the related Seller, which date shall be prior to the applicable
Repurchase Date and which date shall thereafter for all purposes hereof, be deemed to be the Repurchase Date. In addition, Buyers shall promptly notify Seller if any events in clause (i) or (ii) of this Section 24 occur.

25. FURTHER ASSURANCES

The Sellers and
each Guarantor agree to do such further acts and things and to execute and deliver to Buyers such additional assignments, acknowledgments, agreements, powers and instruments as are reasonably required by Buyers to carry into effect the intent and
purposes of this Agreement, to perfect the interests of Buyers in the Purchased Assets or to better assure and confirm unto Buyer its rights, powers and remedies hereunder.

26. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

This Agreement supersedes and integrates all
previous negotiations, contracts, agreements and understandings between the parties relating to a sale and repurchase of Purchased Assets thereto, and it, together with the other Program Documents, and the other documents delivered pursuant hereto
or thereto, contains the entire final agreement of the parties. No prior negotiation, agreement, understanding or prior contract shall have any validity therefor.

27. TERMINATION

This Agreement shall remain in effect until the earlier of (i) April 12, 2007, or
(ii) at Buyers option upon the occurrence of an Event of Default (such date, the Termination Date). However, no such termination shall affect the related Sellers outstanding obligations to Buyer at the time of such
termination. The related Sellers obligations to indemnify Buyers pursuant to this Agreement shall survive the termination hereof.

28.
ASSIGNMENT

The Program Documents are not assignable by the related Seller. Buyers may from time to time assign all or a portion
of its rights and obligations under this Agreement and the Program Documents; provided, however, that the related Buyer shall maintain, for review by the related Seller upon written request, a register of assignees and a copy of an executed
assignment and acceptance by such Buyer and assignee (Assignment and Acceptance), specifying the percentage or portion of such rights and obligations assigned. Upon such assignment, (a) such assignee shall be a party hereto and to
each Program Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of such Buyer hereunder, and (b) such Buyer shall, to the extent that such
rights and obligations have been so assigned by it to another Person approved by the related Seller (such approval not to be unreasonably withheld) which assumes the obligations of such Buyer, be released from its obligations hereunder accruing
thereafter and under the Program Documents. Unless otherwise stated in the Assignment and Acceptance, the related Seller shall continue to take directions solely from the related Buyer unless otherwise notified by such Buyer in writing. Buyers may
distribute to any prospective assignee any document or other information delivered to any Buyer by the related Seller. Notwithstanding any assignment by any Buyer pursuant to this Section 28, Buyers shall remain liable as to the Transactions.



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29. AMENDMENTS, ETC.

No amendment or waiver of any provision of this Agreement nor any consent to any failure to comply herewith or therewith shall in any event be effective unless the same shall be in writing and signed by Sellers and
Buyers, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

30.
SEVERABILITY

If any provision of any Program Document is declared invalid by any court of competent jurisdiction, such
invalidity shall not affect any other provision of the Program Documents, and each Program Document shall be enforced to the fullest extent permitted by law.

31. BINDING EFFECT: GOVERNING LAW

This Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Sellers may not assign or transfer any of its rights or obligations under this Agreement or any other Program Document without the prior written consent of Buyers. THIS AGREEMENT 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.

32.
CONSENT TO JURISDICTION

SELLERS HEREBY WAIVE TRIAL BY JURY. SELLERS HEREBY IRREVOCABLY CONSENT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. SELLERS HEREBY SUBMIT TO, AND WAIVE
ANY OBJECTION SELLERS MAY HAVE TO, NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR
RELATING TO THE PROGRAM DOCUMENTS.

33. SINGLE AGREEMENT

Each Seller, each Guarantor and each Buyer acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder
constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each Seller, each Guarantor and each Buyer each agree (i) to perform all of its obligations in respect of each Transaction
hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, and (ii) that payments, deliveries and other transfers made by any of them in respect of any
Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfer in respect of any other Transaction hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied
against each other and netted.



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34. INTENT

Sellers and Buyers recognize that each Transaction is a repurchase agreement as that term is defined in Section 101 of Title 11 of the United States Code, as amended (USC), a forward
contract as that term is defined in Section 101 of Title 11 of the USC, and a securities contract as that term is defined in Section 741 of Title 11 of the USC.

It is understood that a Buyers right to liquidate the Purchased Assets delivered to it in connection with the Transactions hereunder or to exercise
any other remedies pursuant to Section 19 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the USC.

35. NOTICES AND OTHER COMMUNICATIONS

Except as provided herein, any notice required or
permitted by this Agreement shall be in writing and shall be effective and deemed delivered only when received by the party to which it is sent; provided, however, that a facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without error message) of such transmission. Notice to NAC, NMI, NFI or NFI Holding shall constitute notice to each and all of such entities. Any such notice shall be sent to a
party at the address or facsimile transmission number set forth below:

if to NAC:

NovaStar Assets Corp.

8140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

|           |  |                    
|---------- |  | -------------------
|Attention: |  | Todd Phillips      
|Telephone: |  | (XXX) XXX-XXXX     
|Facsimile: |  | (XXX) XXX-XXXX     
|E-mail:    |  | XXXXX@novastar1.com

if to NMI, NCFLLC or NCFC:

NovaStar Mortgage, Inc.

8 140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

|           |  |                    
|---------- |  | -------------------
|Attention: |  | Todd Phillips      
|Telephone: |  | (XXX) XXX-XXXX     
|Facsimile: |  | (XXX) XXX-XXXX     
|E-mail:    |  | XXXXX@novastar1.com

if to NFI:

NovaStar Financial, Inc.

8140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

|           |  |                    
|---------- |  | -------------------
|Attention: |  | Todd Phillips      
|Telephone: |  | (XXX) XXX-XXXX     
|Facsimile: |  | (XXX) XXX-XXXX     
|E-mail:    |  | XXXXX@novastar1.com



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if to NFI Holding:

NFI Holding Corporation

8140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

|           |  |                    
|---------- |  | -------------------
|Attention: |  | Todd Phillips      
|Telephone: |  | (XXX) XXX-XXXX     
|Facsimile: |  | (XXX) XXX-XXXX     
|E-mail:    |  | XXXXX@novastar1.com

if to Wachovia Bank, National Association:

Wachovia Bank, National Association

One Wachovia Center

301 South College Street

Charlotte, NC 28288

|           |  |                   
|---------- |  | ------------------
|Attention: |  | Andrew W. Riebe   
|Telephone: |  | (XXX) XXX-XXXX    
|Facsimile: |  | (XXX) XXX-XXXX    
|Email:     |  | XXXXX@wachovia.com

if to Wachovia Investment Holdings, LLC:

Wachovia Investment Holdings, LLC

One Wachovia Center

301 South College Street

Charlotte, NC 28288

|           |  |                   
|---------- |  | ------------------
|Attention: |  | Andrew W. Riebe   
|Telephone: |  | (XXX) XXX-XXXX    
|Facsimile: |  | (XXX) XXX-XXXX    
|Email:     |  | XXXXX@wachovia.com

With a copy to:

Wachovia Capital Markets, LLC

One Wachovia Center

301 South College Street

Charlotte, NC 28288

|           |  |                   
|---------- |  | ------------------
|Attention: |  | Andrew W. Riebe   
|Telephone: |  | (XXX) XXX-XXXX    
|Facsimile: |  | (XXX) XXX-XXXX    
|Email:     |  | XXXXX@wachovia.com



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or, for Transaction Notices and related documents:



|           |  |                   
|---------- |  | ------------------
|Attention: |  | Chad Cote         
|Telephone: |  | (XXX) XXX-XXXX    
|Facsimile: |  | (XXX) XXX-XXXX    
|Email:     |  | XXXXX@wachovia.com

as such address or number may be changed by like notice.

36. CONFIDENTIALITY

(a) This Agreement and
its terms, provisions, supplements and amendments, and transactions and notices hereunder, are proprietary to Buyers and Agent and shall be held by Sellers (and Sellers shall cause each Guarantor to hold it) in strict confidence and shall not be
disclosed to any third party without the consent of Buyers except for (i) disclosure to each Sellers direct and indirect parent companies, attorneys, agents or accountants, provided that such attorneys or accountants likewise agree to be
bound by this covenant of confidentiality or (ii) upon prior written notice to Buyers, disclosure required by law, rule, regulation or order of a court or other regulatory body or (iii) with prior written notice to Buyers, any required
Securities and Exchange Commission or state securities law disclosures or filings, which shall not include the Side Letter unless otherwise agreed by Buyers in writing. Notwithstanding anything herein to the contrary, each party (and each
employee, representative, or other agent of each party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax structure. For this purpose, tax treatment and tax structure shall not include (i) the identity of any existing or future party (or any Affiliate of such party) to this
Agreement or (ii) any specific pricing information or other commercial terms, including the amount of any fees, expenses, rates or payments arising in connection with the transactions contemplated by this Agreement.

(b) Each Buyer acknowledges that certain of the information provided to it by or on behalf of any Seller or the Guarantor in connection with this
Agreement and the transactions contemplated hereby is or may be confidential, and each Buyer agrees that, unless such Seller or the Guarantor, as applicable, shall otherwise agree in writing (subject to subsections (c) and (d) below),
Buyers will not disclose to any other person or entity any information regarding any non-public financial statements, reports and other information furnished by any Seller or the Guarantor to Buyer pursuant to or in connection with any Program
Document, unless such information was known to Buyers on a non-confidential basis prior to disclosure by any Seller or the Guarantor.

(c)
Each party may disclose certain confidential information to (i) any of such partys attorneys, consultants, accountants, financial advisors and independent auditors, (ii) any actual or potential assignee or participant of Buyers under
this Agreement, (iii) any municipal, state, federal or other regulatory body in order to comply with any law, order, regulation, request or ruling or (iv) in the event such party is legally compelled by subpoena or other similar process.

(d) Notwithstanding anything contained herein to the contrary, Buyers shall not disclose or otherwise take any action with respect to any
information furnished by any Seller, the Guarantor or any attorney or other representative of any Seller or the Guarantor, that would cause any Seller, the Guarantor or any affiliate thereof, to be in violation of any requirement of any law, rule or
regulation prohibiting the disclosure of information regarding mortgagors.



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37. JOINT AND SEVERAL LIABILITY

The Sellers hereby acknowledge and agree that they are jointly and severally liable to the Buyers for all representations, warranties, covenants,
obligations and liabilities of each of the Sellers hereunder. The Sellers hereby further acknowledge and agree that any Default, Event of Default or breach of a representation, warranty or covenant by any Seller under this Agreement is hereby
considered a Default, Event of Default or breach by each Seller. A Sellers subrogation claims arising from payments to Buyers shall constitute a capital investment in another Seller (1) subordinated to any claims of Buyers, and
(2) equal to a ratable share of the equity interests in such Seller. The Sellers hereby: (a) acknowledge and agree that the Buyers shall have no obligation to proceed against one Seller before proceeding against the other Seller,
(b) waive any defense to their obligations under this Agreement or any other Program Document based upon or arising out of the disability or other defense or cessation of liability of one Seller versus the other or of any other Person, and
(c) waive any right of subrogation or ability to proceed against any Person or to participate in any security for the Obligations until the Obligations have been paid and performed in full.

[Signature Page Follows]



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IN WITNESS WHEREOF, Sellers, Guarantor and Buyers have caused their names to be signed to this Second
Amended and Restated Master Repurchase Agreement by their respective officers thereunto duly authorized as of the date first above written.



NOVASTAR MORTGAGE, INC., as SellerBy:

/s/ Todd PhillipsName:

Todd PhillipsTitle:

Vice PresidentNOVASTAR ASSETS CORP., as SellerBy:

/s/ Todd PhillipsName:

Todd PhillipsTitle:

Vice PresidentNOVASTAR CERTIFICATES FINANCING LLC, as SellerBy:

/s/ Todd PhillipsName:

Todd PhillipsTitle:

Vice PresidentNOVASTAR CERTIFICATES FINANCING CORPORATION, as SellerBy:

/s/ Todd PhillipsName:

Todd PhillipsTitle:

Vice President




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WACHOVIA INVESTMENT HOLDINGS, LLC, as Buyer and Agent, as applicableBy:

/s/ Andrew W. RiebeName:

Andrew W. RiebeTitle:

Vice PresidentWACHOVIA BANK, NATIONAL ASSOCIATION, as Buyer and Agent, as applicableBy:

/s/ Justin ZakocsName:

Justin ZakocsTitle:

Vice President




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Acknowledged and Agreed:



|                                       |  |                  
|-------------------------------------- |  | -----------------
|NFI HOLDING CORPORATION, as Guarantor 
|                                       | 
|By:                                    |  | /s/ Todd Phillips
|Name:                                  |  | Todd Phillips    
|Title:                                 |  | Vice President   
|                                      
|NOVASTAR FINANCIAL, INC., as Guarantor
|                                       | 
|By:                                    |  | /s/ Todd Phillips
|Name:                                  |  | Todd Phillips    
|Title:                                 |  | Vice President   



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