Pooling and Servicing Agreement

Exhibit 1.1

November 20, 2006

Greenwich Capital Markets, Inc.

600 Steamboat Road

Greenwich, Connecticut 06830

Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Wachovia Capital Markets, LLC

301 South College Street, NC0610

Charlotte, North Carolina 28288-0610

Re:    NovaStar Mortgage Funding Trust, Series 2006-6

Ladies and Gentlemen:

NovaStar Mortgage, Inc. (the “Sponsor”), NovaStar Mortgage Funding Corporation (the “Depositor”) and NovaStar Financial, Inc. (“NFI”) hereby confirm their agreement to sell certain asset backed certificates to Greenwich Capital Markets, Inc. (“GCM”), Deutsche Bank Securities Inc. (“Deutsche Bank”) and Wachovia Capital Markets, LLC (“Wachovia” and, together with GCM and Deutsche Bank, the “Underwriters”) as described herein. The certificates will represent interests in the assets of a trust consisting primarily of a pool of residential, subprime mortgage loans (the “Mortgage Loans”), which were originated by the Sponsor, as originator (in such capacity, the “Originator”) or its affiliate. Pursuant to a Pooling and Servicing Agreement dated as of November 1, 2006 (the “Pooling and Servicing Agreement”) among the Depositor, the Sponsor, U.S. Bank National Association, a national banking corporation (“U.S. Bank”), not in its individual capacity, but solely as Custodian (the “Custodian”), Deutsche Bank National Trust Company, a national banking association, not in its individual capacity, but solely as trustee (the “Trustee”), NovaStar Mortgage Funding Trust 2006-6, a common law trust acting through the Trustee (the “Issuer” or the “Trust”), will issue the securities, as described herein.

All capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Pooling and Servicing Agreement.

1. Securities . The securities will be issued in classes as follows: (i) five classes of senior certificates designated as Class A-1A, Class A-2A, Class A-2B, Class A-2C and Class A-2D Certificates (collectively, the “Class A Certificates” or “Senior Certificates”); and (ii) thirteen classes of mezzanine certificates designated as the 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 M-10, Class M-11, Class M-12 and Class M-13 Certificates (collectively, the “Mezzanine Certificates” and together with Senior Certificates, the “Certificates”).

The Senior Certificates and the Mezzanine Certificates (other than the Class M-10, Class M-11, Class M-12 and Class M-13 Certificates) are collectively referred to herein as the “Underwritten Certificates.”

2. Representations and Warranties of the Sponsor and the Depositor . The Sponsor and the Depositor represent and warrant to, and covenant with, the Underwriters that:

A. The Depositor has filed with the Securities and Exchange Commission (the “Commission”) a registration statement (No. 333-134461) on Form S-3 for the registration under the Securities Act of 1933, as amended (the “Act”), of asset backed securities (issuable in series), which registration statement, as amended at the date hereof, has become effective. Such registration statement, as amended to the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all other material respects with such Rule. The Depositor proposes to file with the Commission pursuant to Rule 424(b) under the Act a supplement dated the date hereof to the prospectus dated June 16, 2006 relating to the Underwritten Certificates and the method of distribution thereof and has previously advised the Underwriters of all further information (financial and other) with respect to the Underwritten Certificates to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date hereof, is hereinafter called the “Registration Statement”; such prospectus dated June 16, 2006, in the form in which it will be filed with the Commission pursuant to Rule 424(b) under the Act is hereinafter called the “Basic Prospectus”; such supplement dated the date hereof to the Basic Prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) of the Act, is hereinafter called the “Supplement”; and the Basic Prospectus and the Supplement together are hereinafter called the “Prospectus.” The free writing prospectus, dated November 17, 2006, in the form in which it has heretofore been filed pursuant to Rule 433 is hereinafter called the “Pricing Free Writing Prospectus”. The Depositor will file with the Commission a report on Form 8-K setting forth specific information concerning the related Mortgage Loans (the “8-K”), as and to the extent required under the Act.

B. As of the date hereof, when the Registration Statement became effective, when the Pricing Free Writing Prospectus is first filed pursuant to Rule 433 under the Act, when the Prospectus Supplement is first filed pursuant to Rule 424(b) under the Act, when, prior to the Closing Date (as defined below), any other amendment to the Registration Statement becomes effective, and when any supplement to the Prospectus is filed with the Commission, and at the Closing Date, (i) the Registration Statement, as amended as of any such time, the Prospectus, as amended or supplemented as of any such time, and the Pricing Free Writing Prospectus, as amended as of any such time, will comply in all material respects with the applicable requirements of the Act and the rules thereunder and (ii) the Registration Statement, as amended as of any such time, did not and will not contain any untrue statement of a material fact and did not and will not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus, as amended or supplemented as of any such time, and the Pricing Free Writing Prospectus, as of the date hereof, did not and will not contain an untrue statement of a material fact and did not and will not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that neither the Sponsor nor the Depositor makes any representation or warranty as to the information contained

in or omitted from the Registration Statement, the Prospectus or the Pricing Free Writing Prospectus or any amendment thereof or supplement thereto in reliance upon and in conformity with the Underwriter Information. The Static Pool Data of the Sponsor, whether or not incorporated by reference in the Pricing Free Writing Prospectus and the Prospectus, as of the date hereof, as of the date of the Prospectus and as of the Closing Date does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

C. Each of the Sponsor, the Depositor and NFI (collectively, the “NovaStar Entities”) is duly organized, validly existing and in good standing under the laws of the state of its respective incorporation, has full power and authority (corporate and other) to own its properties and conduct its business as now conducted by it, and as described in the Pricing Free Writing Prospectus and the Prospectus, and is duly qualified to do business in each jurisdiction in which it conducts business (to the extent such qualification is required by applicable law) or in which the conduct of its business requires such qualification except where the failure to be so qualified does not involve (i) a material risk to, or a material adverse effect on, the business, properties, financial position, operations or results of operations of such entity or (ii) any risk whatsoever as to the enforceability of any Mortgage Loan.

D. There are no actions, proceedings or investigations pending, or, to the knowledge of the Sponsor or the Depositor, threatened, before any court, governmental agency or body or other tribunal: (i) asserting the invalidity of this Agreement, any of the Cap Agreements, any of the Basic Documents, or the Underwritten Certificates; (ii) seeking to prevent the issuance of the Certificates or the consummation of any of the transactions contemplated by the Basic Documents; (iii) which may, individually or in the aggregate, materially and adversely affect the performance by the NovaStar Entities of their respective obligations under, or the validity or enforceability of, the Basic Documents or the Underwritten Certificates; or (iv) which may affect adversely the federal income tax attributes of the Underwritten Certificates as described in the Prospectus.

E. The execution and delivery by the NovaStar Entities of this Agreement and the Basic Documents to which they are a party are within their respective corporate power and have been, or will be, prior to the Closing Date duly authorized by all necessary corporate action on the part of the NovaStar Entities and the execution and delivery of such instruments, the consummation of the transactions therein contemplated and compliance with the provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute or any agreement or instrument to which the NovaStar Entities or any of their affiliates is a party or by which it or any of them is bound or to which any of the property of the NovaStar Entities or any of their affiliates is subject, the NovaStar Entities’ charter or bylaws, or any order, rule or regulation of any court, governmental agency or body or other tribunal having jurisdiction over the NovaStar Entities, any of their affiliates or any of their properties; and no consent, approval, authorization or order of, or filing with, any court or governmental agency or body or other tribunal is required for the consummation of the transactions contemplated by this Agreement or the Prospectus in connection with the issuance and sale of the Underwritten Certificates. Neither the NovaStar Entities nor any of their

affiliates is a party to, bound by or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order, rule or regulation of any court, governmental agency or body or other tribunal having jurisdiction over the NovaStar Entities or any of their affiliates, which materially and adversely affects, or may in the future materially and adversely affect, (i) the ability of the NovaStar Entities to perform their obligations under the Basic Documents or (ii) the business, operations, results of operations, financial position, income, properties or assets of the NovaStar Entities.

F. This Agreement has been duly executed and delivered by the Sponsor and the Depositor, and the other Basic Documents, as applicable, will be duly executed and delivered by the NovaStar Entities, and each constitutes and will constitute the legal, valid and binding obligation of each of the NovaStar Entities enforceable in accordance with their respective terms, except as enforceability may be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights of creditors and (ii) general principles of equity, whether enforcement is sought in a proceeding at law or in equity.

G. The Underwritten Certificates will conform in all material respects to the description thereof in the Pricing Free Writing Prospectus and the Prospectus and will be duly and validly authorized and, when duly and validly executed, authenticated, issued and delivered in accordance with the Pooling and Servicing Agreement and sold to the Underwriters as provided herein, will be validly issued and outstanding and entitled to the benefits of the Pooling and Servicing Agreement.

H. On the Closing Date, the Mortgage Loans will conform in all material respects to the description thereof contained in the Pricing Free Writing Prospectus and the Prospectus and the representations and warranties contained in this Agreement will be true and correct in all material respects. The representations and warranties of the Sponsor and the Depositor set out in the Pooling and Servicing Agreement are hereby made to the Underwriters as though set out herein, and at the dates specified therein, such representations and warranties were or will be true and correct in all material respects.

I. The NovaStar Entities possess all material licenses, certificates, permits or other authorizations issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by it and as described in the Prospectus and there are no proceedings pending or, to the best knowledge of the Sponsor and the Depositor, threatened, relating to the revocation or modification of any such license, certificate, permit or other authorization which singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the business, operations, results of operations, financial position, income, property or assets of the NovaStar Entities.

J. Any taxes, fees and other governmental charges in connection with the execution and delivery of this Agreement or the Basic Documents or the execution and issuance of the Certificates have been or will be paid at or prior to the Closing Date.

K. There has not been any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the NovaStar Entities or their affiliates, taken as a whole, from September 30, 2006.

L. The Basic Documents will conform in all material respects to the descriptions thereof, if any, contained in the Pricing Free Writing Prospectus and the Prospectus.

M. Neither the Depositor nor the Issuing Entity created by the Pooling and Servicing Agreement is, or as a result of the transactions contemplated hereby, will be an “investment company” within the meaning of such term under the Investment Company Act of 1940 (the “1940 Act”) and the rules and regulations of the Commission thereunder. The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended.

N. Neither the Sponsor nor the Depositor is aware of (i) any request by the Commission for any further amendment of the Registration Statement or the Prospectus or for any additional information; (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose; or (iii) any notification with respect to the suspension of the qualification of the Underwritten Certificates for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

O. The Depositor is not an “ineligible issuer” as defined in Rule 405 of the Act.

3. Agreements of the Underwriters . Each Underwriter, severally and not jointly, agrees with the Sponsor and the Depositor and NFI that upon the execution of this Agreement and authorization by each Underwriter of the release of the Underwritten Certificates, each Underwriter shall offer the Underwritten Certificates for sale upon the terms and conditions set forth herein in the amounts set forth in Annex A hereto.

4. Purchase, Sale and Delivery of the Underwritten Certificates . Each of the Sponsor and the Depositor hereby agree, subject to the terms and conditions hereof, to sell the Underwritten Certificates to the Underwriters. Upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, the Underwriters hereby agree, severally and not jointly, to purchase the principal amount of the Underwritten Certificates set forth opposite their respective names in Annex A hereto. At the time of issuance of the Underwritten Certificates, the Mortgage Loans will be transferred by the Sponsor to the Depositor, and by the Depositor to the Issuing Entity pursuant to the Pooling and Servicing Agreement.

The Underwritten Certificates to be purchased by each Underwriter will be delivered by the Sponsor and the Depositor to each Underwriter (which delivery shall be made through the facilities of The Depository Trust Company (“DTC”)) against payment of the purchase price therefor, set forth in Annex A hereto, by a same day federal funds wire payable to the order of the Sponsor.

Settlement shall take place at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019 at 10:00 a.m., on November 30, 2006 or at such other time thereafter as each of the Underwriters, the Sponsor and the Depositor determine (such time being herein referred to as the “Closing Date”). The Underwritten Certificates will be prepared in definitive form and in such authorized denominations as each Underwriter may request, registered in the name of Cede & Co., as nominee of The Depository Trust Company.

The Sponsor and the Depositor agree to have the Underwritten Certificates available for inspection and review by the Underwriters in New York not later than 10:00 a.m. New York time on the business day prior to the Closing Date.

5. Covenants of the Sponsor and the Depositor . Each of the Sponsor and the Depositor covenant and agree with the Underwriters that:

A. The Sponsor and the Depositor will promptly advise the Underwriters and their counsel (i) when any amendment to the Registration Statement shall have become effective; (ii) of any request by the Commission for any amendment to the Registration Statement or the Prospectus or for any additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose; and (iv) of the receipt by the Sponsor or the Depositor of any notification with respect to the suspension of the qualification of the Underwritten Certificates for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. Neither the Sponsor nor the Depositor will file any amendment to the Registration Statement or supplement to the Prospectus after the date hereof and prior to the Closing Date for the Underwritten Certificates unless the Sponsor and the Depositor have furnished each Underwriter and its counsel copies of such amendment or supplement for their review prior to filing and will not file any such proposed amendment or supplement to which such Underwriter reasonably objects, unless such filing is required by law. The Sponsor and the Depositor will use its best efforts to prevent the issuance of any stop order suspending the effectiveness of the Registration Statement and, if issued, to obtain as soon as possible the withdrawal thereof.

B. If, at any time during the period in which the Prospectus is required by law to be delivered, any event occurs as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend or supplement the Prospectus to comply with the Act or the rules under the Act, the Sponsor and the Depositor will promptly prepare and file with the Commission, subject to Paragraph A of this Section 5, an amendment or supplement that will correct such statement or omission or an amendment that will effect such compliance and, if such amendment or supplement is required to be contained in a post-effective amendment to the Registration Statement, will use its best efforts to cause such amendment of the Registration Statement to be made effective as soon as possible.

C. The Sponsor and the Depositor will furnish to each Underwriter, without charge, executed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a Prospectus by the Underwriters or a dealer may be required by the Act, as many

copies of the Prospectus, as amended or supplemented, and any amendments and supplements thereto as the Underwriters may reasonably request. The Sponsor and the Depositor will pay the expenses of printing all offering documents relating to the offering of the Underwritten Certificates.

D. As soon as practicable, but not later than sixteen months after the effective date of the Registration Statement, the Sponsor and the Depositor will make generally available to Holders of Underwritten Certificates an earnings statement covering a period of at least twelve months beginning after the effective date of the Registration Statement which will satisfy the provisions of Section 11(a) of the Act and, at the option of the Sponsor and the Depositor, will satisfy the requirements of Rule 158 under the Act.

E. So long as any of the Underwritten Certificates are outstanding, the Sponsor and the Depositor will cause to be delivered to each Underwriter (i) all documents required to be distributed to the Certificateholders and (ii) from time to time, any other information filed with any government or regulatory authority that is otherwise publicly available, as any of the Underwriters may reasonably request.

F. The Sponsor and the Depositor, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses in connection with the transactions contemplated herein, including, but not limited to, the expenses of printing (or otherwise reproducing) all documents relating to the offering, the fees and disbursements of its counsel and expenses of each Underwriter incurred in connection with (i) the proposed purchase and sale of the Underwritten Certificates; (ii) preparation of all documents specified in this Agreement; (iii) any fees and expenses of the Trustee; (iv) any fees charged by investment rating agencies for rating the Underwritten Certificates; and (v) their investigation with regard to the NovaStar Entities.

G. Each of the Sponsor and the Depositor agrees that, so long as any of the Underwritten Certificates shall be outstanding, it will deliver or cause to be delivered to each Underwriter (i) the annual statement as to compliance delivered to the Trustee pursuant to the Pooling and Servicing Agreement; (ii) the annual statement of a firm of independent public accountants furnished by the Servicer to the Trustee pursuant to Section 3.17 of the Pooling and Servicing Agreement as soon as such statement is furnished to the Sponsor and the Depositor; and (iii) any information and reports required to be delivered by the Servicer pursuant to Article III and Section 4.03 of the Pooling and Servicing Agreement.

H. The Sponsor, and the Depositor will enter into each of the Basic Documents to which it is a party and all related agreements on or prior to the Closing Date.

I. The Sponsor and the Depositor will endeavor to qualify the Underwritten Certificates for sale to the extent necessary under any state securities or Blue Sky laws in any jurisdictions as may be reasonably requested by the Underwriters, if any, and will pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of the Underwritten Certificates for investment under the laws of such jurisdictions as the Underwriters may reasonably designate, if any.

6. Conditions of the Underwriters’ Obligations . The several obligations of the Underwriters to purchase and pay for the Underwritten Certificates as provided herein shall be subject to the accuracy as of the date hereof and the Closing Date (as if made at the Closing Date) of the representations and warranties of the Sponsor and the Depositor contained herein (including those representations and warranties set forth in the Basic Documents incorporated herein), to the accuracy of the statements of the Sponsor and the Depositor made in any certificate or other document delivered pursuant to the provisions hereof, to the performance by the Sponsor and the Depositor of their obligations hereunder, and to the following additional conditions:

A. The Registration Statement shall have become effective no later than the date hereof, and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened, and the Prospectus shall have been filed pursuant to Rule 424(b).

B. The Underwriters shall have received the Basic Documents and the Underwritten Certificates in form and substance satisfactory to the Underwriters, duly executed by all signatories required pursuant to the respective terms thereof.

C. The Underwriters shall have received the favorable opinion of Dewey Ballantine LLP, counsel to NovaStar Entities with respect to the following items, dated the Closing Date, to the effect that:

(1) Each of the NovaStar Entities has been duly organized and is validly existing as a corporation in good standing under the laws of its respective state of incorporation, and is qualified to do business in each state necessary to enable it to perform its obligations under each of the Basic Documents to which it is a party. Each of the NovaStar Entities has the requisite power and authority to execute and deliver, engage in the transactions contemplated by, and perform and observe the conditions of the Basic Documents to which it is a party.

(2) Each of the applicable Basic Documents has been duly and validly authorized, executed and delivered by the applicable NovaStar Entities, all requisite corporate action having been taken with respect thereto, and each constitutes the valid, legal and binding agreement of the NovaStar Entities, and would be enforceable against the applicable NovaStar Entities in accordance with their respective terms.

(3) Neither the transfer of the Mortgage Loans to the Depositor and from the Depositor to the Issuing Entity, the issuance or sale of the Underwritten Certificates nor the execution, delivery or performance by the NovaStar Entities of, the Basic Documents (A) conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default under, (i) any term or provision of any certificate of incorporation or bylaws of the NovaStar Entities; (ii) any term or provision of any material agreement, contract, instrument or indenture, to which any NovaStar Entity is a party or is bound and which has been identified to such counsel by the appropriate officers of such entity; or (iii) to the best of such counsel’s knowledge following due inquiry made of the appropriate officers of such entity, any order,

judgment, writ, injunction or decree of any court or governmental agency or body or other tribunal having jurisdiction over any NovaStar Entity; or (B) results in, or will result in the creation or imposition of any lien, charge or encumbrance upon the Trust or upon the Underwritten Certificates, except as otherwise contemplated by the Pooling and Servicing Agreement.

(4) No consent, approval, authorization or order of, registration or filing with, or notice to, courts, governmental agency or body or other tribunal is required under the laws of the State of Missouri, for the execution, delivery and performance of the Basic Documents, or the offer, issuance, sale or delivery of the Underwritten Certificates or the consummation of any other transaction contemplated thereby by the NovaStar Entities, except such which have been obtained.

(5) There are no actions, proceedings or investigations pending or, to such counsel’s knowledge, threatened against the NovaStar Entities before any court, governmental agency or body or other tribunal (i) asserting the invalidity of the Agreements or the Underwritten Certificates; (ii) seeking to prevent the issuance of the Underwritten Certificates or the consummation of any of the transactions contemplated by the Basic Documents; or (iii) which would materially and adversely affect the performance by the NovaStar Entities of obligations under, or the validity or enforceability of, the Underwritten Certificates or the Basic Documents.

(6) The Commission has not issued any stop order suspending the effectiveness of the Registration Statement or any order directed to any prospectus relating to the Underwritten Certificates (including the Prospectus), and has not initiated or to the knowledge of such counsel, threatened any proceeding for that purpose.

(7) When the Underwritten Certificates have been duly executed, delivered and authenticated in accordance with the Pooling and Servicing Agreement, and delivered and paid for pursuant to this Agreement, the Underwritten Certificates will be validly issued and entitled to the benefits of the Pooling and Servicing Agreement.

(8) The Depositor and the Issuing Entity are not, and will not as a result of the offer and sale of the Underwritten Certificates as contemplated in the Prospectus and this Agreement become, an “investment company” as defined in the 1940 Act or a company “controlled by” an “investment company” within the meaning of the 1940 Act.

(9) The Pooling and Servicing Agreement is not required to be qualified under the Trust Indenture Act.

(10) Such counsel shall state that they have participated in the preparation of the Registration Statement and the Prospectus and no facts have come to their attention which may cause them to believe that the Registration Statement (excluding any Exhibit thereto), as of the effective date thereof, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the

Prospectus, as of its date or the Closing Date, contains any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that such counsel need not express any view with respect to the financial, statistical or computational material included in the Registration Statement or the Prospectus.

(11) To the best of such counsel’s knowledge, there are no material contracts, indentures or other documents of a ch