OMB Number 3235-0145 United States Securities and Exchange Commission Washington DC 20549 Schedule 13D/A Amendment 1 Under the Securities and Exchange Act of 1934 Novastar Financial, Inc. Name of Issuer 8.90% Series C Cumulative Redeemable Preferred Stock Title of Class of Securities CUSIP Number 669947806 Howard Amster, 23811 Chagrin Blvd., Suite 200 Beachwood, Ohio 44122-5525, 216 595-1047 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 30, 2011 Date of Event which Requires Filing of this Statement If this filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e) (f) or (g), check the following box / /. Note: Scheduled filed in paper format shall include a signed original and five copies of the schedule including all exhibits. See 240.13D-7 for other parties to who copies are to be sent. *The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section of the Act, but shall be subject to all other provisions of the Act (however see the Notes). 1 Name of Reporting Person Howard Amster 2 If a member group a) / / b) /X/ 3 SEC Use only 4 Source of Funds PF 5 Check if Disclosure 6 Citizenship U.S.A. Number of Shares 7 Sole Voting Beneficially Owned By Each 8 Shared Voting Reporting Person With 9 Sole Dispositive 10 Shared Dispositive 11 Aggregate Amount Beneficially owned 0 12 Check if Aggregate Amount (11) Excludes Certain Shares 13 Percent of Class Represented by amount in row (11) 0 14 Type of Reporting Person IN 1 Name of Reporting Person Amster Trading Company 2 If a member group a) / / b) /X/ 3 SEC Use only 4 Source of Funds WC 5 Check if Disclosure 6 Citizenship Ohio Number of Shares 7 Sole Voting Beneficially Owned By Each 8 Shared Voting Reporting Person With 9 Sole Dispositive 10 Shared Dispositive 11 Aggregate Amount Beneficially owned 0 12 Check if Aggregate Amount (11) Excludes Certain Shares 13 Percent of Class Represented by amount in row (11) 0 14 Type of Reporting Person CO 1 Name of Reporting Person Amster Trading Company Charitable Remainder Unitrust 2 If a member group a) / / b) /X/ 3 SEC Use only 4 Source of Funds AF 5 Check if Disclosure 6 Citizenship Ohio Number of Shares 7 Sole Voting Beneficially Owned By Each 8 Shared Voting Reporting Person With 9 Sole Dispositive 10 Shared Dispositive 11 Aggregate Amount Beneficially owned 0 12 Check if Aggregate Amount (11) Excludes Certain Shares 13 Percent of Class Represented by amount in row (11) 0 14 Type of Reporting Person OO 1 Name of Reporting Person Samuel J Heller Irrevocable Trust 2 If a member group a) / / b) /X/ 3 SEC Use only 4 Source of Funds OO 5 Check if Disclosure 6 Citizenship Arizona Number of Shares 7 Sole Voting Beneficially Owned By Each 8 Shared Voting Reporting Person With 9 Sole Dispositive 10 Shared Dispositive 11 Aggregate Amount Beneficially owned 0 12 Check if Aggregate Amount (11) Excludes Certain Shares 13 Percent of Class Represented by amount in row (11) 0 14 Type of Reporting Person OO There are no changes to the Schedule 13D, as amended except as set forth in this first amendment. Item 5 This Member Group ceased to be beneficial owners of more than 5 percent of Novastar 8.90 Series C cumulative Redeemable Preferred Stock as of June 30, 2011. The Reporting Persons disposed of their entire 8.90 Series C Redeemable Preferred shares in exchange for common stock and cash in an Issuer Exchange Offer pursuant to Prospectus dated May 3, 2011. Signature After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Date: July 1, 2011 /s/ Howard Amster /s/ Amster Trading Company By: Howard Amster Title: President /s/ Amster Trading Company Charitable Remainder Unitrust By: Howard Amster Title: Trustee /s/ Samuel J Heller Irrevocable Trust By: Howard Amster Title: Trustee