NovaStar Financial Inc., which exited its mortgage production business in January, has invested in an appraisal business.
The Kansas City, Mo.-based company announced today that it acquired a majority interest in PipeFire LLC on Aug. 8.
PipeFire, based in Indianapolis, provides residential appraisal management and related services to third parties.
The acquired company will be re-named StreetLinks National Appraisal Services and headed by Steve Haslam, who was formerly in charge of retail operations at NovaStar.
“PipeFire is well known to us from our days as a retail lender as we used its services in our operation,” NovaStar Chief Executive Officer Lance Anderson said in the news release. “With the enhanced focus on the appraisal process as the result of the recent downturn in the housing market we feel we can provide a valuable service to the lending community.”
In January, NovaStar laid off all but 30 employees and discontinued retail and brokerage operations. About 1,570 job cuts were announced by the company between March 2007 and January 2008.
In April, NovaStar disclosed in a filing with the Securities and Exchange Commission that it had received requests or subpoenas for information from the SEC, the Department of Housing and Urban Development, the Federal Trade Commission, the Department of Justice, the Federal Bureau of Investigation, the New York Attorney General and the Department of Labor. It noted that it might not be able to withstand an unfavorable ruling by any of the agencies.
Stockholder equity as of Sept. 30, 2007, was a negative $81 million.
“While we cannot expect this transaction or StreetLinks to resolve the significant challenges NovaStar still faces, we view the acquisition as a positive step toward reestablishing niche operations in the residential housing market,” Anderson added.
