8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) June 1, 2007

NOVASTAR MORTGAGE FUNDING TRUST, SERIES 2007-2

(Issuing Entity with respect to Certificates)

NOVASTAR MORTGAGE FUNDING CORPORATION

(Exact name of sponsor and registrant as specified in its charter)

Delaware	333-134461	48-1195807
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
8140 Ward Parkway, Suite 300 Kansas City, Missouri		64114
(Address of Principal Executive Offices)		(Zip Code)

NOVASTAR CERTIFICATES FINANCING CORPORATION

(Exact name of depositor and co-registrant as specified in its charter)

Delaware	333-134461-01	48-1194616
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

Registrant's telephone number, including area code	(816) 237-7000
No Change
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 - Other Events.

Incorporation of Certain Documents by Reference

NovaStar Mortgage Funding Corporation and NovaStar Certificates Financing Corporation (the "Registrants") are filing a final prospectus supplement, dated May 25, 2007, setting forth a description of the collateral pool and proposed structure of $779,369,000 aggregate principal balance of Class A-1A Asset Backed Certificates (the "Class A-1A Certificates"), $140,080,000 aggregate principal balance of Class A-2A Asset Backed Certificates (the "Class A-2A Certificates"), $80,420,000 aggregate principal balance of Class A-2B Asset Backed Certificates (the "Class A-2B Certificates"), $49,730,000 aggregate principal balance of Class A-2C Asset Backed Certificates (the "Class A-2C Certificates"), $18,601,000 aggregate principal balance of Class A-2D Asset Backed Certificates (the "Class A-2D Certificates"), $70,700,000 aggregate principal balance of Class M-1 Asset Backed Certificates (the "Class M-1 Certificates"), $49,700,000 aggregate principal balance of Class M-2 Asset Backed Certificates (the "Class M-2 Certificates"), $23,800,000 aggregate principal balance of Class M-3 Asset Backed Certificates (the "Class M-3 Certificates"), $21,700,000 aggregate principal balance of Class M-4 Asset Backed Certificates (the "Class M-4 Certificates"), $21,700,000 aggregate principal balance of Class M-5 Asset Backed Certificates (the "Class M-5 Certificates"), $18,900,000 aggregate principal balance of Class M-6 Asset Backed Certificates (the "Class M-6 Certificates"), $18,900,000 aggregate principal balance of Class M-7 Asset Backed Certificates (the "Class M-7 Certificates"), $15,400,000 aggregate principal balance of Class M-8 Asset Backed Certificates (the "Class M-8 Certificates"), and $15,400,000 aggregate principal balance of Class M-9 Asset Backed Certificates (the "Class M-9 Certificates", and, together with the Class A-1A Certificates, Class A-2A Certificates, Class A-2B Certificates, Class A-2C Certificates, Class A-2D Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates and Class M-8 Certificates, the "Certificates") by NovaStar Mortgage Funding Trust, Series 2007-2 (the "Issuing Entity").

Item 9.01 - Financial Statements and Exhibits:

(a)	Financial Statements of Business Acquired:	None
(b)	Pro Forma Financial Information:	None
(c)	Exhibits:
	5.1 Opinion of Dewey Ballantine LLP with respect to legality.
	8.1 Opinion of Dewey Ballantine LLP with respect to tax matters.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 1, 2007

NOVASTAR MORTGAGE FUNDING

CORPORATION

By:/s/ Matt Kaltenrieder

Matt Kaltenrieder

Vice President

 

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	Exhibit Index
Exhibit No.	Description
Exhibit 5.1	Opinion of Dewey Ballantine LLP with respect to legality.
Exhibit 8.1	Opinion of Dewey Ballantine LLP with respect to tax matters.

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EX-5.1

EXHIBIT 5.1

June 1, 2007

NovaStar Mortgage Funding Corporation

8140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

Re:	NovaStar Mortgage Funding Corporation
	Registration Statement on Form S-3 (333-134461 and 333-134461-01)

Ladies and Gentlemen:

We have acted as counsel to NovaStar Mortgage Funding Corporation, a Delaware corporation (the "Depositor"), in connection with the issuance and sale of the NovaStar Mortgage Funding Trust, Series 2007-2, NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-2, Class A-1A, Class A-2A, Class A-2B, Class A-2C, Class A-2D, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class Class I, Class C and Class R Certificates (the "Certificates"). The Depositor’s Registration Statement on Form S-3, dated June 16, 2006 has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). The Certificates were issued pursuant to a Pooling and Servicing Agreement, dated as of May 1,2007, among the Depositor, NovaStar Mortgage, Inc., as servicer and as sponsor, U.S. Bank National Association, as custodian and Deutsche Bank National Trust Company, as trustee (the "Agreement").

As such counsel, we have examined copies of the Articles of Incorporation and Bylaws of the Depositor, the Registration Statement, the Agreement, and originals or copies of such other corporate minutes, records, agreements and other instruments of the Depositor, certificates of public officials and other documents and have made such examinations of law, as we have deemed necessary to form the basis for the opinion hereinafter expressed. In our examination of such materials, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies submitted to us.

We do not express any opinion herein concerning any law other than the federal laws of the United States of America and the laws of the State of New York and we express no opinion as to the laws of any other jurisdiction. All opinions expressed herein are based on laws, regulations and policy guidelines currently in force and may be affected by future regulations.

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Based upon and subject to the foregoing, we are of the opinion that:

The Certificates have been duly executed and delivered, authenticated by the Trustee and sold as described in the Prospectus, and the Certificates are legally issued, fully paid and non-assessable. This opinion is subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and we express no opinion with respect to the application of equitable principles or remedies in any proceeding, whether at law or in equity.

We hereby consent to the references to this firm under the caption "Certain Legal Matters" in the related Prospectus Supplement. In giving such consent, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.

Very truly yours,

/s/ Dewey Ballantine LLP

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EX-8.1

EXHIBIT 8.1

June 1, 2007

NovaStar Mortgage Funding Corporation

8140 Ward Parkway, Suite 300

Kansas City, Missouri 64114

Re: NovaStar Mortgage Funding Corporation

Registration Statement on Form S-3 (333-134461 and 333-134461-01)

Ladies and Gentlemen:

We have acted as tax counsel to NovaStar Mortgage Funding Corporation, a Delaware corporation (the "Depositor"), in connection with the Prospectus filed by the Depositor.

The term "Prospectus" means the prospectus included in the Registration Statement. The term "Registration Statement" means (i) the Registration Statement on Form S-3 (No. 333-134461 and No. 333-134461-01), including the exhibits thereto and (ii) any post-effective amendment filed and declared effective prior to the date of issuance of the asset-backed securities registered thereby (the "Securities").

We have examined the question of whether the Securities will have the tax treatment described in the Prospectus. Our analysis is based on the provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder as in effect on the date hereof and on existing judicial and administrative interpretations thereof. These authorities are subject to change and to differing interpretations, which could apply retroactively. The opinion of tax counsel is not binding on the courts or the Internal Revenue Service (the "IRS").

Based on the foregoing, and such legal and factual investigations as we have deemed appropriate, while no transaction closely comparable to that contemplated has been the subject of any Treasury Regulation, revenue ruling or judicial decision, and therefore the matter is subject to interpretation, we are of the opinion that for federal income tax purposes:

(1)The Securities have been issued in accordance with the Prospectus, and have the federal income tax treatment described in the Prospectus.

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(2)We hereby adopt and confirm the information appearing under the caption "Material Federal Income Tax Consequences" in the Prospectus and confirm that it represents our opinion with respect to the matters discussed therein.

This opinion is furnished by us as counsel to the Depositor. We hereby consent to the reference to Dewey Ballantine LLP in the related prospectus supplement under the heading "Certain Legal Matters." In giving such consent, we do not admit hereby that we come within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.

Very truly yours,

/s/ Dewey Ballantine LLP

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