Answer- Foreclosure katsman Final

8/3/2019 Answer- Foreclosure katsman Final

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SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF KINGS

--------------------------------------------------------------------------------------------XChase Home Finance LLC,

Index No.: 12537/2010

Plaintiff,VERIFIED ANSWER

WITH-against- COUNTERCLAIMS

Chavi Katsman, Moshe Z. Katsman, Bank of America, NA, Citibank, NA,New York City Environmental Control Board, New York City ParkingViolations Bureau, New York City Transit Adjudication Bureau, New YorkState Department of Taxation and Finance, and JOHN DOES and JANEDOES 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

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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

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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 robo-

signing 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

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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

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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.

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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

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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

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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 aprima 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

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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

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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. SeeBank 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



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



84. Plaintiff has no legal capacity to bring the cause of action.

AS AND FOR A FIFTH AFFIRMATIVE DEFENSE - Lack of Personal Jurisdiction


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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



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



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



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.



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.



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



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



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



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 conduct and unfulfilled contractual and equitable conditions

precedent.

FIFTEENTH AFFIRMATIVE DEFENSE Indispensable Party



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



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



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



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



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

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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



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



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.

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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



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



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



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. An Order dismissing Plaintiffs Complaint with prejudice.

2. An Order declaring the subject note and mortgage to be null and void.

3. An Order declaring the loan rescinded.

3. 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. Any other and further relief this Court finds just and proper.

Dated: November 3, 2011Brooklyn, New York

Law Firm of Alexander Levkovich

__________________________Alexander Levkovich, Esq.

Attorneys for Defendants730 Ave LBrooklyn, New York 11230

Tel: (718) 407-0263

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

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ATTORNEYS VERIFICATION

State of New York )) SS.:

County of Kings )

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.

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The grounds of my belief as to all matters not stated upon my own knowledgeare based on

information contained in my file.

Dated: Brooklyn, New York

November 5, 2011

_______________________Alexander Levkovich

VERIFICATION

State of New York )) SS.:

County of KINGS )

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

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Sworn to before me this

_____ day of _____________ 2011

_____________________________Notary Public

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF KINGS

Index No.: 10-12537CHASE HOME FINANCE LLC,

Plaintiff(s),-against-

Chavi Katsman, Moshe Z. Katsman, Bank of America, NA, Citibank, NA, New York CityEnvironmental Control Board, New York City Parking Violations Bureau, New York City

Transit Adjudication Bureau, New York State Department of Taxation and Finance, andJOHN 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 aninterest in or lien upon the Mortgage premises described in the Complaint,

Defendants.

VERIFIED ANSWER WITH COUNTER-CLAIMS

Law Firm ofALEXANDER LEVKOVICH, ESQ.

Attorneys for Defendants730 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, anattorney admitted to practice in the Courts of New York State, certifies that, uponinformation and belief and reasonable inquiry, the contents contained in the annexeddocument are not frivolous nor frivolously presented.

Dated: New York, New YorkNovember 5, 2011

_________________________Alexander Levkovich, Esq.

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

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