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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 SpDU/muEle/SASUKL2jv1tqndeJuseMYK7OB5QpeYvz6suqo6wffzHOgcTnUglQS
 1DAexpieVvxThZiUh1N3EA==

<SEC-DOCUMENT>0001181431-03-023303.txt : 20030916
<SEC-HEADER>0001181431-03-023303.hdr.sgml : 20030916
<ACCEPTANCE-DATETIME>20030916160632
ACCESSION NUMBER:		0001181431-03-023303
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030915
FILED AS OF DATE:		20030916

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NOVASTAR FINANCIAL INC
		CENTRAL INDEX KEY:			0001025953
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				742830661
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		8140 WARD PARKWAY
		STREET 2:		STE 300
		CITY:			KANSAS CITY
		STATE:			MO
		ZIP:			64114
		BUSINESS PHONE:		8162377000

	MAIL ADDRESS:	
		STREET 1:		8140 WARD PARKWAY
		STREET 2:		STE 300
		CITY:			KANSAS CITY
		STATE:			MO
		ZIP:			64114

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			SCHWATKEN RODNEY E
		CENTRAL INDEX KEY:			0001207181

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13533
		FILM NUMBER:		03897745

	BUSINESS ADDRESS:	
		STREET 1:		C/O NOVASTAR FINANCIAL INC
		STREET 2:		1901 WEST 47TH PL. #105
		CITY:			WESTWOOD
		STATE:			KS
		ZIP:			66205
		BUSINESS PHONE:		9133621090

	MAIL ADDRESS:	
		STREET 1:		C/O NOVASTAR FINANCIAL INC
		STREET 2:		1901 WEST 47TH PL. #105
		CITY:			WESTWOOD
		STATE:			KS
		ZIP:			66205
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd18626.xml
<DESCRIPTION>DEFERRED COMP
<TEXT>
<XML>
<?xml version="1.0"?><ownershipDocument>
    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType><periodOfReport>2003-09-15</periodOfReport><notSubjectToSection16>0</notSubjectToSection16>
    <issuer>
        <issuerCik>0001025953</issuerCik>
        <issuerName>NOVASTAR FINANCIAL INC</issuerName>
        <issuerTradingSymbol>NFI</issuerTradingSymbol></issuer><reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001207181</rptOwnerCik>
            <rptOwnerName>SCHWATKEN RODNEY E</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>8140 WARD PARKWAY</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 300</rptOwnerStreet2>
            <rptOwnerCity>KANSAS CITY</rptOwnerCity>
            <rptOwnerState></rptOwnerState>
            <rptOwnerZipCode>64114</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
            <reportingOwnerRelationship>
<isDirector>0</isDirector><isOfficer>1</isOfficer><isTenPercentOwner>0</isTenPercentOwner><isOther>0</isOther><officerTitle>Principal Financial Officer</officerTitle></reportingOwnerRelationship></reportingOwner><nonDerivativeTable><nonDerivativeTransaction><securityTitle><value>NovaStar Financial, Inc Common Stock</value></securityTitle><transactionDate><value>2003-09-15</value></transactionDate><deemedExecutionDate><value>2003-09-16</value></deemedExecutionDate><transactionCoding><transactionFormType>4</transactionFormType><transactionCode>P</transactionCode><equitySwapInvolved>0</equitySwapInvolved></transactionCoding><transactionAmounts><transactionShares><value>9</value></transactionShares><transactionPricePerShare><value>54.80</value></transactionPricePerShare><transactionAcquiredDisposedCode><value>A</value></transactionAcquiredDisposedCode></transactionAmounts><postTransactionAmounts><sharesOwnedFollowingTransaction><value>11704</value></sharesOwnedFollowingTransaction></postTransactionAmounts><owner
shipNature><directOrIndirectOwnership><value>D</value></directOrIndirectOwnership></ownershipNature></nonDerivativeTransaction></nonDerivativeTable><ownerSignature><signatureName>Rodney E. Schwatken</signatureName><signatureDate>2003-09-16</signatureDate></ownerSignature></ownershipDocument>



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</TEXT>
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</SEC-DOCUMENT>
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