SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS --------------------------------------------------------------------------------------------X Chase Home Finance LLC, Index No.

: 12537/2010 Plaintiff, VERIFIED ANSWER WITH -againstCOUNTERCLAIMS Chavi Katsman, Moshe Z. Katsman, Bank of America, NA, Citibank, NA, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau, New York State Department of Taxation and Finance, and JOHN DOES and JANE DOES said names being fictitious and unknown to the plaintiff, the person or parties intended being the persons or parties if any, having or claiming an interest in or lien upon the Mortgage premises described in the Complaint, Defendants, -------------------------------------------------------------------------------------------X PLEASE TAKE NOTICE, that the Defendants, CHAVI KATSMAN and MOSHE Z. KATSMAN, hereinafter DEFENDANTS by and through their attorney(s), ALEXANDER LEVKOVICH, ESQ., as and for an Answer to the plaintiffs Complaint, allege the following: 1. Defendants lack knowledge or information sufficient to form a belief with respect to the allegations contained in Paragraphs 1, 2, 3a, 4(b),(c),(d), 6, 14, 15, 16, 17, 18 of the Complaint. 2. Defendants neither admits nor denies the truth of the allegations contained in Paragraph 3, 7, 8, 9, 11, 12 and 13 of the Complaint. 3. Defendants deny the truth of the allegations contained in Paragraph 4a, 5 of the complaint. 4. Denies the genuineness of the signatures on any assignments of this mortgage to the Plaintiff, or intermediary assignees and assignors. 5. Alleges that the purported assignments seeking to give Plaintiff standing to bring

this suit were invalidly and/or fraudulently executed and recorded and is therefore void. 6. Alleges that the Plaintiff is unable to establish a chain of title to the mortgage loan. 7. Demands that the Plaintiff prove at trial a legally sufficient chain of title to the Note and Mortgage from the original Lender to the Plaintiff. 8. Alleges that on or about April 27, 2010 in anticipation of the commencement of this foreclosure action, an Assignment of Mortgage was prepared at the directions of the Mortgage Servicer and executed by MERS, as nominee for the Lender, to the Plaintiff. See attached as Exhibit "A". 9. Alleges that Plaintiff did not pay any consideration for the mortgage and note at the time of its assignment on April 27, 2010. 10. Alleges that the Plaintiff knew that the mortgage was in default at the time of the transfer. 11. Upon information and belief, the actual investor/noteholder of the mortgage is not the Plaintiff, but the actual owner is unknown to the defendants at this time. RELEVANT BACKGROUND AND FACTS 12. Upon information and belief, Defendants were induced into taking out this mortgage, and secured by their primary residence, without receiving the full disclosure necessary to consummate a fully binding contract. 13. Upon information and belief, the original Lender, MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. ("MERS"), as Nominee for BNY MORTGAGE COMPANY, LLC. never disclosed its intent to never hold on to the risk of default on said mortgage. 14. Further, upon information and belief, there was no disclosure regarding the

severe alienation of the borrowers right to modify and adjust the terms by the specific intent of the original Lender to immediately flip this mortgage and/or note into a mortgage backed securitization offering. 15. Upon information and belief, notwithstanding the Plaintiff's assertion of standing and being a party in interest in this case, the reality is that the underlying Note has been transferred into a securitized trust under the terms of a Pooling and Servicing Agreement. 16. Upon information and belief, in order for this transfer to occur, it must have been transferred among several different entities prior to landing into the securitized trust. 17. Upon information and belief, at every stage of the chain of title, the Plaintiff does not have sufficient legal assignment of the note. 18. The right to bring a foreclosure action is attached only to a properly transferred note. 19. Upon information and belief, due to the complex nature of the path this promissory note has taken, Plaintiff has engaged in fraudulent behavior by robosigning fraudulently produced assignment the purport to assign Plaintiff the right to bring this action. 20. Upon information and belief, this robo-signing fraudulent activity is a direct consequence of the mortgage transaction in this case, which were the deceptive methods used by the original lender and its assignees and agents to induce the the Defendants to sign the Promissory Notes brought into strength on the back of the hard working labor of the American people, including the Defendant. 21. Upon information and belief, because of the inability of the Plaintiff to demonstrate how they were able to get legal holder in due course status of the

promissory note in this case, they engaged in fraudulent behavior in producing alleged assignments through robo-signing. 22. As seen in Exhibit A, the infamous robo-signer in this case is Beth Cottrell, who specifically has been part of a publicly scrutinized campaign allegedly producing fraudulent documents. 23. It is alleged that after the Defendant started to experience a hardship in thier ability to pay this mortgage, they made numerous attempts with the servicer to work out a loan modification unsuccessfully. 24. After the lawsuit was commenced against Defendants, they have made all reasonable attempts to workout a loan modification within the context of the settlement conference, and submitted all relevant documents as requested, without any good faith attempt from the Plaintiff. 25. Upon information and belief, it is understood why Servicer could not work out a loan modification because it is not the legal holder of the promissory note, and is severely limited by the pooling and servicing agreement in its ability to modify the mortgage. Background of the Mortgage Electronic Recording Systems 26. MERS is a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. Shareholders and owners of MERS include the Mortgage Bankers Association, Fannie Mae, Freddie Mac, WAMU, CitiMortgage, Bank of America, GMAC, AIG United Guaranty, Countrywide Home Loans, Inc. and Merrill Lynch. 27. MERS serves as the mortgagee of record for lenders, investors and their loan servicers in the county land records. MERS claims its process eliminates the need to file assignments in the county land records which lowers costs for lenders and

consumers by reducing county recording revenues from real estate transfers and provides a central source of information and tracking for mortgage loans MERS helped make mortgage-backed securities possible. Others have claimed that it is a scheme to evade paying the states their mortgage recording fees, hide the identity of the actual owners of the mortgage, and puts a cloud on the title to all of the properties in which MERS has attempted to assign a mortgage to another entity. 28. MERS claims to become the mortgagee of record by assignment or in the original security instrument (MERS as Original Mortgagee or "MOM"). Once MERS is the mortgagee of record, MERS believes that subsequent assignments of the mortgage are not necessary upon a transfer of servicing to another MERS member or the sale of the beneficial interest in the promissory or mortgage note because MERS remains the mortgagee on behalf of the current owner and servicer. Many cases have challenged these assertions, particularly claiming that an assignment from MERS cannot be valid, if it separates the interest in the mortgage from the interest in the mortgage note. The Loan Transaction 29. On August 11, 2005, it is alleged that the defendants executed a note and mortgage covering the premises (the Note and Mortgage.) 30. Lender in the loan transaction was alleged to be BNY MORTGAGE COMPANY, LLC The Mortgage was in favor of MERS, as named mortgagee, nominee of BNY(hereinafter BNY MORTGAGE) for purpose of recording the mortgage. 31. The mortgage was recorded in the Office of the County Clerk of Nassau County on May 27, 2010, after this lawsuit was filed and claiming to be effective since December 4, 2006.

32. Upon information and belief, MERS has no financial interest or ownership interest in the Mortgage and never has any interest in the Note. Officers of MERS have testified in other litigation that it does not obtain any interest in, or possession of the Note at any time and has no legal power to assign any interest in the Note. These facts have been found in New York cases, as well. 33. Subsequent transfers of the Note from BNY Mortgage might have been made after the original loan transaction, but the defendants are not yet in possession of the details of such transfers. After a reasonable opportunities for discovery, the defendants will have more information on these transfers. 34. The plaintiffs Complaint does not allege that the Mortgage was subsequently assigned to the plaintiff, neither is the Assignment annexed to the Complaint, nor is a copy of the Mortgage Note is not annexed as an Exhibit to the Complaint. The Ineffective Negotiation of the Note to the Plaintiff 35. Plaintiff has failed to allege in the Complaint: the current existence of the note, its ownership of the note, its possession of the note at the time this action commenced, that the Note was endorsed to the Plaintiff, or that the Note was physically delivered to the Plaintiff prior to the commencement of this action. 36. Assuming that the note was endorsed to an assignee on the date of the purported assignment of mortgage, April 27, 2011 the Plaintiffs complaint alleges that the Mortgage Loan was in arrears for since December 1, 2010. 37. Upon information and belief, at the time of the purported endorsement of the Note to the Plaintiff, the Plaintiff had knowledge that the Mortgage Loan was in arrears. 38. Upon information and belief, further, if the allegations of the Plaintiff are correct, and Plaintiff was aware of the alleged arrears at the time of the endorsement of

the Note to the Plaintiff on no later than April 27, 2010, since it commenced the foreclosure action only sixteen (16) days after the date of the purported endorsement to it. Plaintiff made no attempt to contact the Defendants to discuss the repayment of the Note. The Plaintiff did not do anything other than commence this action. 39. Accordingly, Plaintiff is not a holder in due course of the note, and this action to enforce the note is subject to all contractual defenses that the defendants might have against the originating lender and all subsequent alleged assignees. The Invalidity of the Purported Assignment to the Plaintiff 40. According to the Assignment of Mortgage dated April 27, 2010 a copy of which is annexed hereto as Exhibit B, it was signed by Beth Cottrell, as vice president of Mortgage Electronic Registration Systems Inc., as nominee for BNY Mortgage Company. The Assignment was acknowledged in Ohio. 41. Upon information and belief, according to the copy of the recorded assignment annexed hereto, the Assignment of Mortgage is invalid because: (1) The Certification of Acknowledgment does not conform to New York requirements and a Certificate of Conformity is not annexed and recorded; (2) It does not include a power of attorney from Lender to MERS authorizing MERS to act as its agent in the execution of the Assignment; (3) It does not include a Corporate Resolution from Lender to MERS to sign the Assignment on behalf of Lender; (4) It does not include a Corporate Resolution from MERS to Beth Cottrell authorizing her to execute the Assignment on behalf of MERS. 42. The aforesaid Assignment of Mortgage should not have been recorded and is invalid and void under New York law. 43. The identity of the lawful holder of the Note and the Mortgage is presently

unknown to the Defendants, but will be learned with a reasonable opportunity for discovery. 44. Nevertheless, Defendants allege that the Plaintiff is not the holder in due course of the Note or the proper assignee or owner of the mortgage and has no standing to sue in this matter. Plaintiff Not Holder in Due Course 45. The Plaintiff has not demonstrated that it is the owner of the note and mortgage. 46. The plaintiff has not annexed as an Exhibit to the Complaint any evidence that it is in possession of the original Note and Mortgage. The Plaintiff has not plead any facts nor included any evidence that support it being the valid assignee of the Note for value. 47. The Plaintiff has not plead any facts that support its taking of the Note in good faith. 48. The Plaintiff has not plead any facts that support its taking of the Note without notice that it is in default or overdue. 49. The Plaintiff has not plead any facts that support its taking of the Note without notice that it was subject to defenses by the Borrower. 50. Accordingly, the plaintiff is not a holder in due course of the Note. 51. Plaintiff has not established a chain of good legal title for the Note and Mortgage. 52. To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership and possession of the note, ownership of the mortgage, the defendants default, and the amount defendant owes to the plaintiff. 53. If the party named as the plaintiff represents that it is the mortgage servicer, it must show that it holds the note or (1) that it is an agent of the true owner-holder

and that (2) the principal remains the holder of the Note. In addition, the owner of the note, if different from the holder, must join in the action.

AS AND FOR A FIRST AFFIRMATIVE DEFENSE Lack of Standing 54. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 53 as more fully set forth here at length. 55. If a Plaintiff cannot prove standing to bring suit, then his path to the courthouse is blocked. See Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 N.Y.2d 801, 812 (2003) and Caprer v. Nussbaum, 825 N.Y.S.2d 55, 62 (2d Dept. 2006). 56. It is the burden of Plaintiff to prove that it has standing to sue. Elements of Standing Not Met 57. There is no showing that a case or controversy exists between the Plaintiff and Defendants 58. Under the terms of the note, prescribed payments are due to the note holder. The note holder is either the original mortgagee or a successor in interest. Plaintiff is neither. Plaintiff has presented no evidence that it is the holder of the note or the representative of the holder of the note. 59. Moreover, Plaintiff has not demonstrated that it has suffered any injury because it has not demonstrated any interest in the mortgage and note in question.

Assignment by MERS is Invalid 60. The purported assignment of the mortgage by MERS is invalid, ineffective, and void as a matter of law to transfer ownership of the note and mortgage to the purported assignee, the Plaintiff herein. 61. MERS does not have either the holder status to bring an action to foreclose, nor 9

does it have the legal authority to transfer a mortgage because it is never a holder of the promissory note. 62. At the closing of the Mortgage Loan with the Defendants, MERS was named in the Mortgage as the nominee and subsequently was the purported assignor of the mortgage to the plaintiff. 63. Upon information and belief, at the closing of the Mortgagee Loan with the Defendants, MERS was not mentioned in the Note as payee or in any other capacity. 64. Upon information and belief, the split of the Note from the Mortgage was intentional by BNY, as it served BNY's purpose in securitizing the Mortgage Loan. 65. Therefore, the Plaintiff has no standing to commence or maintain this action and the complaint should be dismissed.

Assignment of Mortgage Without Note Does Not Grant Standing 66. In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced. See Bank of New York v. Silverberg, 86 A.D.3d 274, 279, 926 N.Y.S.2d 532, 537 (2011). 67. Moreover, an assignment of the mortgage without the note is a nullity. See Id. 68. The assignor of a mortgage must own the note secured thereby or have the specific authority of its principal for an assignment of mortgage to be valid. 69. At the time of the assignment of the Mortgage to the plaintiff, on April 27, 2010, MERS was not the owner of the note, and according to the terms of the assignment itself, only assigned the the mortgage and not the note. 70. Accordingly, the assignment of mortgage of May 4, 2011 was invalid and a nullity.

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71. Moreover, the Mortgage is unenforceable by the plaintiff or any successor to its interests. 72. Consequently, the action to foreclose is unavailable the Plaintiff, and should be dismissed.

The Securitization Separates the Mortgage From the Note 73. Such a separation makes it impossible for the holder of the note to foreclose, unless the holder of the mortgage is the agent of the holder of the note. 74. Upon information and belief, Defendant does not own or hold the Note and has not claimed or demonstrated Defendant represents the actual owner of the Note. 75. The securitization improperly attempts to divide the Note from the Mortgage and to make the Mortgage a separately enforceable interest. 76. A Mortgage cannot be enforced as a separate interest in the property to be foreclosed apart from and independent of the Note.

AS AND FOR A SECOND AFFIRMATIVE DEFENSE Failure to State a Cause of Action Upon Which Relief Can Be Granted 77. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 76 as more fully set forth here at length. 78. Plaintiff has failed to allege any affirmative allegation of being the legal holder and owner of the promissory note and deed of trust, which is a required element of bringing an action of foreclosure. 79. Therefore, because all elements of a foreclosure case have not been demonstrated, this case should be dismissed.

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AS AND FOR A THIRD AFFIRMATIVE DEFENSE Procedural Deficiencies 80. Plaintiff is in violation of RPAPL 1304 in failing to provide the requisite 90-Day Pre-foreclosure notice prior to filing this action. The loan alleged in the Complaint is a Non-Traditional Loan under RPAPL 1304(5)(e). 81. Upon information and belief, the note and mortgage was procured in violation of Banking Law Section 6-L(2)(l)(i), which has been dubbed the Counseling Statute, in that Plaintiff has failed to deliver, place in mail, fax or electronically transmit the following notice in at least 12-point type to the borrower at the time of application: You should consider financial counseling prior to executing loan documents. The enclosed lost of counselors is provided by the New York State Banking Department. and in violation of Banking Law Section 6-L(2)(l)(ii) which requires that the lender or mortgage broker within three days after determining that the loan is a high cost loan, but no less than ten days before closing, give the Consumer Caution and Home Ownership Counseling Notice to the borrower. 82. Upon information and belief, Plaintiff did not send a notice of default to Defendants in the manner required by the terms of the mortgage executed by the parties.

AS AND FOR A FORTH AFFIRMATIVE DEFENSE-Lack of Capacity to Sue 83. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 81 as more fully set forth here at length. 84. Plaintiff has no legal capacity to bring the cause of action.

AS AND FOR A FIFTH AFFIRMATIVE DEFENSE - Lack of Personal Jurisdiction 85. Defendants repeat, reiterate and reallege each and every allegation contained in

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paragraphs 1 through 83 as more fully set forth here at length. 86. Upon information and belief, Plaintiff has not obtained personal jurisdiction over the Defendants.

AS AND FOR A SIXTH AFFIRMATIVE DEFENSE Defense based on Documentary Evidence Documents Demonstrate the Plaintiff is Not a Party in Interest 87. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 86 as more fully set forth here at length. 88. Plaintiffs claims should be dismissed based upon documentary evidence because it appears on the face of the documents submitted in this case that a person other then the Plaintiff is the true owner and holder of the subject note and mortgage on the date this action was commenced. 89. This is demonstrated by the fact the Plaintiff has failed to adequately prove that it is a party in interest through it's allegations in it's Complaint.

Documents Demonstrate the Plaintiff Does Not Own the Promissory Note 90. Plaintiff has failed to demonstrate that it has properly been negotiated the Note from the original "lender." 91. In the assignment dated April 27, 2010 recorded with CRFN number 2010000178121 in KINGS COUNTY, it states that only the mortgage is transferred and not the Promissory Note. 92. Therefore, even if the assignment created through robo-signing is found to be valid, then it is still not enough to grant Plaintiff standing. 93. As a result, this case should be dismissed.

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AS AND FOR A SEVENTH AFFIRMATIVE DEFENSE Improper Restrictions 94. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 93 as more fully set forth here at length. 95. The Mortgage is a security agreement between the creditor and debtor to secure repayment of the loan by encumbering collateral for the benefit of the creditor. The security agreement may not be modified or amended by one party without the prior written consent of the other. 96. Upon information and belief, The Pooling and Servicing Agreement (Pooling Agreement) which is the organic document creating Mortgage-backed securities changes the terms and conditions of the Mortgage. 97. Upon information and belief, the changes are made unilaterally by a transferee holder of the Mortgage as a successor in interest to the original mortgagee named in the Mortgage. This transferee holder creates the Pooling Agreement, organizes the securitization and appoints the parties to manage the securitization and control the Mortgage. 98. Upon information and belief, the Pooling Agreement imposes additional rules and restrictions upon the Mortgage and Note. These changes as well as others are made without the consent and usually without the knowledge of the mortgagor. 99. Upon information and belief, when the parties executed the Mortgage, the mortgagor was neither obligated to agree to an alternate dispute resolution in the event of a default nor restricted from entering an alternate dispute resolution. 100. Upon information and belief, when signing the Mortgage, the mortgagor neither knew nor had reason to know that a successor in interest to the mortgagee would subsequently impair transferability of the Mortgage or impose new rules and

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restrictions upon modification of the Mortgage. Failure to abide by the rules and restrictions imposes liability upon the parties who organized, manage and control the securitization. 101. The Pooling Agreement creates restrictions upon modification of the Promissory Note by: (a) Imposing the restriction needed on Mortgage modification to avoid double taxation and make collection of the payments by the trust and payment to the investors a single pass through taxable event instead under REMIC instead of double taxation where the trust sand the investors are each taxed for interest income earned. (b) Imposing restrictions upon the number of Mortgages in the pool which may be modified. (c) Providing a procedure for foreclosure but no procedure to modify the loan as an alternate dispute resolution. (d) Creating securities with classes of ownership (tranches) with adverse and opposing financial interests resulting in so called tranche warfare so that a modification which favors one tranche may work a detriment upon another thereby creating liability for the managing parties. (e) Restricting the ability to lower interest payments on the Note. (f) Restricting the ability to increase the number of payments to be made. (g) Restricting the ability to defer payments. (h) Restricting the ability to extend the term of the Mortgage. (i) Restricting the ability to impose a temporary moratorium on payments. (j) Restricting the ability to accept short sales or reduce the principal amount of the debt.

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102. The imposition of these restrictions by outside parties to the original transaction between mortgagor and mortgagee substantially harms the defendant. It causes the Defendant to use foreclosure as the initial and exclusive remedy instead of the last resort in the event of a default.

AS AND FOR A EIGHTH AFFIRMATIVE DEFENSE Wrongful Conversion of the Trust 103. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 102 as more fully set forth here at length. 104. Upon information and belief, the securitization of the Trust constitutes a conversion of the Mortgage rendering it null, void and unenforceable. The Note when executed could be sold or otherwise transferred, in whole or in part. The consent given by the mortgagor and the legal authority as holder to enable the holder to sell or otherwise transfer the Mortgage does not entail the right to convert the Mortgage into a security. 105. Upon information and belief, the failure to adhere to this distinction has resulted in conversion of an enforceable note and mortgage into unenforceable securitized note and mortgage. When the Mortgage was securitized, the Note was converted and could no longer be sold or transferred, in whole or in part. 106. The parties who manage the securitization such as the trustee or servicing agent of a pass through trust have no legal or equitable interest in the securitized Mortgage. 107. The securitization divides those who are at a financial risk of loss from a default upon the Mortgage the investors or certificate holders) from those who control and

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have decision-making authority over the Mortgage. When the managers decide to foreclose, it is the certificate holders who bear the loss. However, the certificate holders have nothing to say about if, when and how the managers decide to foreclose. The certificate holders, guarantors and Trust insurers bear the losses. 108. Upon information and belief, by separating the incidence of loss from the authority to foreclose, the original Note has been altered resulting in a change to the Mortgage without the consent of the mortgagor. The conversion of the Mortgage to Mortgage backed securities renders the Mortgage unenforceable. 109. Upon information and belief, the parties who manage and control the Trust and mortgage in this case do not represent and are not the appointees of or successors in interest to the note holder. The third parties who manage and control the mortgage are interlopers and inter-meddlers which have wrongfully and without legal authority inserted themselves into the relationship between mortgagor and mortgagee established by the note and mortgage. 110. The interests of the Defendants as mortgagor are adversely and materially, affected by these changes.

AS AND FOR A NINTH AFFIRMATIVE DEFENSE Securitization Removes the Status of Note Holder 111. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 110 as more fully set forth here at length. 112. Upon information and belief, securitization of a Mortgage makes the trustee an unsecured creditor. The unsecured creditor can sue on the debt evidenced by the note but cannot foreclose.

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113. Upon information and belief, the trustee is the holder of the note under the U.C.C. and is entitled to receive the installment payments. The trustee, however, is not the note holder for purposes of enforcing the mortgage because the trustee cannot enforce the mortgage on behalf of a secured creditor that no longer exists. 114. Upon information and belief, securitization disconnects the mortgage from the mortgage note. The certificate holders hold no interest in the mortgages. A mortgage is executed as a collateral agreement to allow foreclosure for a specific, identified creditor or such creditors successor in interest. Securitization creates a state of facts where there is no specific, identified creditor remaining with an interest in the mortgage. 115. The following actions disconnect the mortgage from the note: (a) Segmentation of cash flows into tranches; (b) The mortgage backed securities trusts payment obligation to pay certificate holders is unrelated to the payments received from any specific mortgage or the entire mortgage portfolio; (c) Sale, redemption or repayment of a mortgage in the trusts portfolio does not alter or modify a certificate holders amount of payment or right to receive payment. (d) the disconnection of moral hazard (financial loss) from control and management of the note; (e) the insertion of service providing, fee collecting, third party managers between the debtor and the creditor and creditors successors in interest; and (f) the subordination of the terms and conditions of the note and mortgage to the provisions of the master pooling and servicing agreement converting the

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bilateral structure of the note into a multilateral contractual arrangement.

AS AND FOR A TENTH AFFIRMATIVE DEFENSE The Note And Mortgage Are Unenforceable Because The Mortgagor Never Consented To The Securitization. 116. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 116 as more fully set forth here at length. 117. Upon information and belief, securitization separates control over the mortgage and the decision to foreclose from the note holder and wrongfully delegates these responsibilities to a group of third party managers. 118. Upon information and belief, the mortgagor was neither informed of nor asked to consent to securitization of the mortgage. Such consent is required. 119. Upon information and belief, control of the mortgage is conveyed to a group of managers who adopt a new set of rules to the terms and conditions of the mortgage. The group of managers does not control the mortgage on behalf of an extant note holder.

AS AND FOR A ELEVENTH AFFIRMATIVE DEFENSE Payments on Mortgage Already Made. 120. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 119 as more fully set forth here at length. 121. Upon information and belief, the payments alleged to have been in have been paid by a third party to the trust for pass through payment to the certificate holders. 122. Upon information and belief, Defendants assert that the Pooling Agreement or

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agreements made between the trustee and third party managers call for such payments and such payments have been paid for this mortgage. 123. Upon information and belief, the Pooling Agreement which is the organic document creating mortgage backed securities provides that the party which collects the mortgage payments and deals with the mortgages on a day-today basis known as the Servicer, shall pay as advances to the Trustee the monthly payment due if uncollected from mortgagor. Such provisions are also incorporated in the contract between the trustee and the Servicer. The trustee then includes such payment in the monthly payments made to the certificate holders. 124. Upon information and belief, the certificate holders are the parties entitled to receive payment from the mortgage proceeds. If the certificate holders are paid once, they have no further claim to collect the same payment a second time. Once is enough. 125. Upon information and belief, whether or not the Servicer has a claim to recover payment is moot for purposes of this proceeding and need not be adjudicated by this court. It suffices that the Servicer as a matter of law has no interest in the mortgage and is not the mortgagee of a successor in interest. The Servicer whether or not it is a creditor of the mortgagor, has no legal right to the remedy of foreclose provided by the mortgage. 126. Alternatively, upon information and belief, the Plaintiff has been paid by one or more of the following: mortgage guaranty companies, over-collateralization, cross collateralization, default swaps or government payments either before or after the commencement of this action. 127. The exact identity of the source of these payments will be determined during

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discovery. 128. As a result, the Plaintiff has no financial interest in this action.

AS AND FOR A TWELVTH AFFIRMATIVE DEFENSE Unfair and Deceptive Practices 129. Defendants repeat, reiterate and

reallege each and every allegation contained in paragraphs 1 through 128 as more fully set forth here at length. 130. The original Lender conducted a

business and/or furnished a service as those terms are defined in the New York General Business Law 349, the Deceptive Trade Practices Act,. 131. Upon information and belief, Lender and it's assignees violated the Deceptive Practices Act by engaging in deceptive acts and practices in connection with this mortgage transaction. These acts were misleading in a material way, and were likely to mislead a reasonable consumer. Further, these acts and practices were unfair, deceptive, and contrary to public policy and generally recognized standard of business, and have a broad impact on the public at large. 132. Upon information and belief, the deceptive acts and practices include: (a) the note and mortgage was procured by a deceptive omission of material facts to the transaction, without disclosing to Defendants that they will be unable to modify the terms of the mortgage in the event of hardship, without disclosing that their promissory note will be used as part of a complicated scheme to create mortgage-backed securities that will enrich the Lenders, its assignees and agents, and then be used to mislead unsuspecting investors. (b) Plaintiff and/or its agents and its alleged assignors and assignees intentionally

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exercised improper, inadequate or nonexistent due diligence regarding Defendants ability to repay the amounts allegedly due under the note and mortgage. (c) Plaintiff and/or its agents and its alleged assignors and assignees intentionally violated New York Banking Law Section 6-L(2)(m), in that the amount financed to cover the costs of the loan were in excess of three percent of the principal amount of the loan. (d) Plaintiff and/or its agents and its alleged assignors and assignees intentionally mislead the Defendants in inducing them to take out mortgage without disclosing keys facts and necessary terms that significantly alter the risks and benefits to the Defendants in taking out the loans. (e) Failing to provide the required Good Faith Estimate and HUD1 settlement statement prior to closing. (f) Misleading the Defendants as to the cost of the mortgage loan, by improperly disclosing finance charges. (g) Failing to provide Defendants of the right to cancel prior to the closing of this loan. (h) Failure to send a notice of default to Defendants in the manner required by the terms of the mortgage executed by the parties. 133. Upon information and belief, these unfair

business practices were part of, and representative of, a pattern of misleading activities targeted at numerous consumers. Lender's and its agents and assignees practices had and may continue to have a broad impact on consumers throughout New York State. 134. Upon information and belief, The Defendants

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suffered injury as a result of the the conduct by the Lender, and its assignees and agents.

AS AND FOR A THIRTEENTH AFFIRMATIVE DEFENSE Clog on the Equity of Redemption 135. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 134 as more fully set forth here at length. 136. The equity of redemption creates a right in every mortgagor to redeem the property, i.e., to pay off the debt and remove the lien encumbrance from the property. 137. By restricting the ability to modify the mortgage, securitization interferes with Defendants rights to redeem the subject property. For example, if the debtor could only afford to pay off 99% of the amount owed, the creditor is barred from accepting the one percent reduction in the payoff. This is a clog on the equity of redemption.

AS AND FOR A FOURTEENTH AFFIRMATIVE DEFENSE Champerty 138. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 134 as more fully set forth here at length. 139. As stated above, the purported assignment of the Note and Mortgage to the Plaintiff was made long after the Defendant was allegedly in default in the repayment of the Note, and dated twenty-two (22) days before it the Summons and Complaint was filed, and recorded seven (7) days after its filing. 140. Plaintiff allegedly acquired the Note knowing that it was in default. 141. Plaintiff acquired the note with the principal intent of commencement of this

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action for foreclosure of the mortgage. 142. At the time that the Assignment was purportedly made, Plaintiff had no other interest in debt, and there was no other litigation pending in connection with the Note and Mortgage. 143. Accordingly, the acquisition of the Note was with the intent and for the purpose of bringing this action and was, therefore, a violation of New York Judiciary Law 489(1). 144. Therefore, the action should be dismissed with prejudice.

FIFTEENTH AFFIRMATIVE DEFENSE Unclean hands 145. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 144 as more fully set forth here at length. 146. The Plaintiff comes to this Court to seek a Judgment of foreclosure of a mortgage. The nature of the relief sought is equitable, and as such, the Plaintiff must come to the Court free of a claim for an inequitable result. 147. Upon information and belief, Plaintiff and/or its predecessor(s) in interest had unclean hands in their course of dealing with Defendants, because of the several facts alleged herein. 148. The Plaintiff comes to court with unclean hands and is prohibited by reason thereof from obtaining the equitable relief of foreclosure from this Court. The Plaintiffs unclean hands result from the Plaintiffs improvident and predatory intentional failure to comply with material terms of the mortgage and note and the failure to comply with the default loan servicing requirements that apply to this loan, all as described herein above. 149. As a matter of equity, this Court should refuse to foreclose this mortgage

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because acceleration of the note would be inequitable, unjust, and the circumstances of this case render acceleration unconscionable. 150. This court should refuse the acceleration and deny foreclosure because Plaintiff has waived the right to acceleration or is estopped from doing so because of misleading precedent. conduct and unfulfilled contractual and equitable conditions

FIFTEENTH AFFIRMATIVE DEFENSE Indispensable Party 151. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 150 as more fully set forth here at length. 152. The complaint fails to join indispensable parties, specifically the true owner of the note and mortgage, the loan originator, any entity issuing mortgage default insurance or other credit enhancement products.

SIXTEENTH AFFIRMATIVE DEFENSE Unconscionablity 153. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 152 as more fully set forth here at length. 154. Throughout the course of the inducement and closing of the mortgage transaction, an enormous disparity in bargaining power existed between the Plaintiffs and their predecessor in interest and the Defendants. The Defendants had no experience in this area of mortgage lending and finance. 155. Upon information and belief, the Plaintiffs and their predecessors in interest and agents sought to profit from this disparity in bargaining power and sophistication and did so by deliberately targeting the Defendants with disinformation.

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156. Said procedural and substantive unconscionability renders this mortgage void and unenforceable. SEVENTEENTH AFFIRMATIVE DEFENSE Fraud 157. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 156 as more fully set forth here at length. 158. Upon information and belief, the Plaintiff and its predecessors in interest and agents made representations and omissions during the initiation of this mortgage as to a material fact by failing to disclose to the Defendants their real intent in giving the Defendant this mortgage and by failing to disclose the full breadth and scope of the transaction, and the level of risk the Defendants would be exposed to as a result of these aspects of the transaction. 159. Upon information and belief, the omission of this information rendered the nature of the transaction as presented to the Defendants as false and misleading in nature. 160. Upon information and belief, this omission of material information was made to induce the Defendants to consummate this mortgage to their detriment. 161. The full nature of the bargain was not disclosed to the Defendants, where in return for cash they where allegedly receiving from the Lender, the Lender and its assignee's, agents, and associates received (1) a promise protected by a Deed of Trust (mortgage) to pay back the full amount over 30 years amounting to a repayment of more then double the original loan amount including interest, (2) the right to foreclose on the Defendants and take away their shelter if the payments are not fully made, (3) the promissory note singed by the Defendants which were then used by the Plaintiffs and their predecessors in interest to enrich themselves exponentially to the detriment of the Defendants and the entire

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American financial and economic system. 162. Since the Defendants were never made aware of the third aspect of the this deal which is the main reason why all the underwriting standards were relaxed, and the Defendants were able to get cash so easily, they relied on the omission of this critical element to their detriment. 163. Upon information and belief this reliance is reasonable and caused Defendants injury..

EIGHTEENTH AFFIRMATIVE DEFENSE Conversion 164. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 163 as more fully set forth here at length. 165. The plaintiff has clear legal ownership or right to possession of the property prior to the conversion. 166. Upon information and belief, by inducing fraudulently the Defendants, the Plaintiff and their predecessors in interest and agents and assignees engaged in conversion of the Defendants equity in their primary residence . 167. As a result, the Defendants are entitled to damages. AS AND FOR A FIRST COUNTERCLAIM 168. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 167 as more fully set forth here at length. 169. The actions of the plaintiff constitute violations of New York Banking

Law Section 6-L(1)(d), violations of New York Banking Law Section 6-L(2)(m), violations New York Banking Law Section 6-L(2)(l)(i) and 6-L(2)(l)(ii). 170. As the violations of the statute were intentional, pursuant to New 27

York Banking Law Section 6-L(10), the note and mortgage are rendered void and the Plaintiff has no right to collect any principal, interest or other charges whatsoever with respect to the loan.

AS AND FOR A SECOND COUNTERCLAIM 171. Defendants repeat, reiterate and reallege each and every allegation

contained in paragraphs 1 through 170 as more fully set forth here at length. 172. As the violations of the statute were intentional, pursuant to New York Banking Law Section 6-L(10), Plaintiff is liable to Defendants for all payments made under the loan agreement.

AS AND FOR A THIRD COUNTERCLAIM 173. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 172 as more fully set forth here at length. 174. As the violations of the statute were intentional, pursuant to New York Banking Law Section 6-L(10), Plaintiffs are liable to Defendants for payments made under the loan agreement.

AS AND FOR A FOURTH COUNTERCLAIM 175. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 174 as more fully set forth here at length. 176. Due to the violations of the New York State Banking Law, good faith and fair dealings were directly aimed at New York consumers as a whole and Defendants have been damaged, Plaintiffs are in violation of General Business Law Section 349. 28

177. Since the violations of good faith, fair dealing and the New York State Banking Law were intentional, willful and knowing, Plaintiff is liable to Defendants for damages and reasonable attorneys fees.

AS AND FOR A FIFTH COUNTERCLAIM 178. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 1 through 177 as more fully set forth here at length. 179. Should Defendants prevail in this lawsuit, Plaintiff is liable for Defendants reasonable attorneys fees pursuant to the New York State Access to Justice in Lending Act.

AS AND FOR A SIXTH COUNTERCLAIM 180. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 5 through 179 as more fully set forth here at length. 181. Due to this high-cost home loan violating provisions of the New York Banking Law, pursuant to Section 6-L(11), the loan transaction, specifically the note and mortgage, is rescinded. AS AND FOR A SEVENTH COUNTERCLAIM 182. Defendants repeat, reiterate and reallege each and every allegation contained in paragraphs 5 through 33 as more fully set forth here at length. 183. Plaintiff has committed fraud and conversion in procuring the loan in question and in procuring this action. 184. As a result of such fraud, the Plaintiff is liable to defendants for punitive damages. 185. Moreover, the mortgage and note are rendered null and void or voidable.

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WHEREFORE, Defendants pray to this Court for: 1. 2. 3. 3. An Order dismissing Plaintiffs Complaint with prejudice. An Order declaring the subject note and mortgage to be null and void. An Order declaring the loan rescinded. An Order granting judgment to Defendants for recovery of all payments made

to Plaintiff. 4. An Order granting judgment to the Defendants awarding reasonable attorneys

fees for an amount to be determined at trial. 5. Dated: Any other and further relief this Court finds just and proper. November 3, 2011 Brooklyn, New York

Law Firm of Alexander Levkovich __________________________ Alexander Levkovich, Esq. Attorneys for Defendants 730 Ave L Brooklyn, New York 11230 Tel: (718) 407-0263 To: Jason Kalmar, Esq. ROSICKI, ROSICKI & ASSOCIATES, P.C. 51 E Bethpage Road Plainview, NY 11803

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ATTORNEYS VERIFICATION State of New York County of Kings ) ) ) SS.:

I, ALEXANDER LEVKOVICH, an attorney duly admitted to practice law before the Courts of the State of New York, hereby affirms the following statements are true under the penalties of perjury: I am the attorney for the Defendants MOSHE KATSMAN and CHAVI KATSMAN in the within action. That I have read the Verified Answer to the Summons and Complaint, and know the contents thereof, the same is true to my own knowledge, except as to those matters therein stated to be alleged upon information and belief, and as to those matters I believe it to be true. The reason this verification is made by me and not by said Defendants, is that said Defendants do not reside in the County wherein I maintain my office. 31

The grounds of my belief as to all matters not stated upon my own knowledge are based on information contained in my file. Dated: Brooklyn, New York November 5, 2011

_______________________ Alexander Levkovich

VERIFICATION State of New York County of ) ) KINGS

SS.: )

Moshe Katsman, being duly sworn, deposes and says: I am the named Defendant in this proceeding. I have read the Answer in Person and know the contents thereof to be true to my own knowledge, except as to those matters stated on information and belief, and as to those matters I believe them to be true.

_______________________ Moshe Katsman 32

Sworn to before me this _____ day of _____________ 2011

_____________________________ Notary Public SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS Index No.: 10-12537 CHASE HOME FINANCE LLC, Plaintiff(s), -againstChavi Katsman, Moshe Z. Katsman, Bank of America, NA, Citibank, NA, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau, New York State Department of Taxation and Finance, and JOHN DOES and JANE DOES said names being fictitious and unknown to the plaintiff, the person or parties intended being the persons or parties if any, having or claiming an interest in or lien upon the Mortgage premises described in the Complaint, Defendants. VERIFIED ANSWER WITH COUNTER-CLAIMS Law Firm of ALEXANDER LEVKOVICH, ESQ. Attorneys for Defendants 730 Ave L Brooklyn, NY 11230 (718) 407-0263

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CERTIFICATION PURSUANT TO 22 NYCRR 130-1.1a I hereby certify that pursuant to 22 NYCRR 130-1.1a, the undersigned, an attorney admitted to practice in the Courts of New York State, certifies that, upon information and belief and reasonable inquiry, the contents contained in the annexed document are not frivolous nor frivolously presented. Dated: New York, New York November 5, 2011 _________________________ Alexander Levkovich, Esq.

To: Jason Kalmar, Esq. ROSICKI, ROSICKI & ASSOCIATES, P.C. 51 E Bethpage Road Plainview, NY 11803

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