Johnson & Perkinson Announces Approaching Deadline to File As Lead Plaintiff in Class Action Lawsuit Against NovaStar Financial, Inc.

Business Editors/Legal Writers

SOUTH BURLINGTON, Vt.--(BUSINESS WIRE)--May 21, 2004

The law firm of Johnson & Perkinson has filed a class action lawsuit on behalf of purchasers NovaStar Financial, Inc.'s, ("NovaStar") (NYSE: NFI) common stock during the period of October 28, 2003 through April 12, 2004, inclusive, (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934. A copy of the complaint filed in this action is available from the Court, or can be viewed on Johnson & Perkinson's website at: www.jpclasslaw.com .

If you bought shares of NovaStar between October 28, 2003, and April 12, 2004, you may, no later than June 14, 2004, request that the Court appoint you as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Johnson & Perkinson, or other counsel of your choice, to serve as your counsel in this action.

Johnson & Perkinson is a litigation boutique dedicated to maximizing shareholders' returns and keeping the lead plaintiffs apprized of the occurrences in the litigation. Mr. Johnson was an attorney with the enforcement division of the U.S. Securities and Exchange Commission from 1980-1985 and since that time, has primarily prosecuted complex class actions on behalf of plaintiffs in the areas of securities and consumer fraud. Based in South Burlington, Vermont, the firm has prosecuted leading actions on behalf of defrauded investors in numerous public companies resulting in the recovery of many millions of dollars including the recent preliminary settlement with i2 Technologies, Inc. for $84.85 million and has been singled out for its excellence by various courts. The firm is currently lead or co-lead counsel in securities class actions pending against Xerox, Priceline, Nortel, and Exchange Applications and serves on executive committees in various class actions, including the securities class action against Global Crossing. Please access the Johnson & Perkinson website at www.jpclasslaw.com for more information about the firm. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters, please contact: Peter J. McDougall, Esq., at Johnson & Perkinson, 1690 Williston Road, P.O. Box 2305, South Burlington, VT 05403, toll free at 1-877-266-2133 or via e-mail at [e-mail] .