UNITED STATES DISTRICT COURTFor the Northern District of Illinois

Eastern Division

DEUSTCHE BANK NATIONAL TRUSTCOMPANY as Trustee

Plaintiff

v.

KRISTEN & HOWARDBODZIANOWSKI

Defendant

No. 01 Cv 1950

Honorable Rebecca Pallmeyer

Magistrate Judge Cox

DEFENDANT'S MOTION TO DISMISS FOR LACK OF STANDING

Defendants Kristen Bodszianowski and Howard Bodzianowski by and through their

attorneys Woerthwein & Miller move to dismiss the foreclosure complaint brought by Deutsche

Bank National Trust Company as Trustee pursuant to Rule 12(b)(1) of the Federal Rules of Civil

Procedure for lack of standing as follows:

1. Defendants bring this Motion to Dismiss attacking standing. Plaintiff was not the

assignee and owner of the Note and the Mortgage under 735 ILCS 5/15-1208 when it filed suit.

It has long been the law in Illinois that a plaintiff in a mortgage foreclosure action must have a

beneficial interest in the mortgage. Winkelman v. Kiser, 27 Ill. 20, 21, 27 Ill. 21 (1861). a

complaint must be dismissed if the plaintiff cannot prove that it owned the note and mortgage on

the date the complaint was filed. Deutsche Bank Nat'l Trust Co. v. Steele, 2008 U.S. Dist.

LEXIS 4937 (S.D. Ohio Jan. 8, 2008). Standing is the threshold question in every federal case.

Warth v. Seldin, 422 U.S. 490, 498, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975). Standing "is to be

assessed under the facts existing when the complaint is filed." Lujan v. Defenders of Wildlife,

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UNITED STATES DISTRICT COURTFor the Northern District of Illinois

Eastern Division

DEUSTCHE BANK NATIONAL TRUSTCOMPANY as Trustee

Plaintiff

►v No. 01 Cv 1950

KRISTEN & HOWARDBODZIANOWSKI Honorable Rebecca Pallmeyer

Defendant Magistrate Judge Cox

NOTICE OF FILING

TO: Counsel on the attached Certificate of Service

PLEASE TAKE NOTICE that on this 12th day of August, 2011, the undersignedcounsel filed with the Clerk of the United States District Court for the Northern District ofIllinois, Eastern Division, Defendants Kristen Bodszianowski and Howard Bodzianowski Motionto Dismiss, a copy of which is hereby served upon you.

Dated: August 12, 2011 Respectfully submitted,

By: /s/Theodore A. WoerthweinOne of the Attorneys for the Defendants

Theodore A. WoerthweinWoerthwein & Miller225 West Washington Street

Suite 2200Chicago, Illinois 60606(312) 654-0001

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504 U.S. 555, 570 n. 4, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992). A party seeking to bring a

case into federal court bears the burden of demonstrating standing and must plead its components

with specificity. Valley Forge Christian College v. Americans United for Separation of Church

and State, Inc., 454 U.S. 464, 472; 102 S. Ct. 752, 70 L. Ed. 2d 700 (1982). Plaintiff has the

burden of establishing its standing. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342, 126

S. Ct. 1854, 164 L. Ed. 2d 589 (2006).

2. Defendants' Motion is based upon the documents attached to Plaintiffs

Complaint, which form part of the Complaint, and public records. This is not a 12(b)(6) motion

and thus not converted into a motion for summary judgement. English v. Cowell, 10 F.3d 434,

437 (7th Cir. Ill. 1993). Moreover, documents outside the Complaint are all admissible as public

records filed with the Securities and Exchange Commission ("SEC"). Henson v. CSC Credit

Services, 29 F.3d 280, 284 (7th Cir. 1994). See also F.R.E. 201 ("A court shall take judicial

notice if requested by a party and supplied with the necessary information.") A district court may

consider relevant documents required by the securities laws to be filed with the Securities and

Exchange Commission ("SEC") in determining a motion to dismiss . . ." Kramer v. Time

Warner, Inc., 937 F.2d 767, 769 (2d Cir. N.Y. 1991).

3. Plaintiff is not the original lender. Plaintiff seeks to establish standing by

attaching to the Complaint a copy of a mortgage note bearing an undated, not notarized,

endorsement to Plaintiff from the original lender and an assignment of mortgage from MERS to

Plaintiff date January 20, 2011. These assignments and endorsements are insufficient to transfer

a mortgage to a New York REMIC ("Real Estate Mortgage Investment Conduit") Trust like

Plaintiff under the terms of the Trust.

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4. In this matter Deutsche Bank is suing as Trustee for a specific Trust. Pursuant

735 ILCS 5/15-1504A of the foreclosure statute, the Plaintiff Trust pleads in paragraph 10(n) that

the capacity under which it is suing is as the legal holder of the indebtedness and owner of the

mortgage. A trust is an artificial entity and can only do those acts which it is permitted to do

under the documents creating the trust and the law of the state that governs the trust. For

instance, see 760 ILCS 5/3 regarding Illinois trusts, stating that the instrument governs.

Moreover, since the objective was to create a trust to serve as a conduit for securitized mortgages

passing income through to investors, the documents creating the trust were filed with the SEC as

a Form 8-K pursuant to the Securities and Exchange Act of 1934. The document is available on

Edgar'. These documents filed with the SEC should be telling the truth. However, as

demonstrated in detail in the following paragraphs, under the terms of the instrument creating the

Trust, the Plaintiff is not the legal holder of the Mortgage or the Note.

5. Section 2.01 of the Pooling and Servicing Agreement (PSA) creates the Plaintiff

Trust as a New York common law trust. The relevant portions of the PSA are attached hereto as

Exhibit A. New York trust law and the PSA govern the acquisition of mortgage loans by the

Trust. This basic fact issue is one that the trustee has agreed should be decided by New York

trust law. The trust's beneficiaries have every expectation when they purchase the trust's

certificates that the trustee will promote a uniform interpretation of the trust's terms no matter

where the forum. The Trust is created to exchange the Trust Fund for certificates The assets

' EDGAR, the Electronic Data -Gathering, Analysis, and Retrieval system,

performs automated collection, validation, indexing, acceptance, and forwarding of submissionsby companies and others who are required by law to file forms with the U.S. Securities andExchange Commission (the "SEC"). The database is freely available to the public via the Internet

described as being conveyed under Section 2.01 of the PSA are the Mortgage Loans and this

Plaintiff pleads that it is the legal holder of the Mortgage and the Note.

6. As detailed below, the Trust does not own the Note and Mortgage because the

transfer alleged in the Complaint could not have taken place according to the terms creating the

Trust (the PSA) and New York trust law.

7. The Trust seeking to foreclose upon Defendants has included in the PSA, which is

its trust agreement, the specific time, manner, and method of funding the Trust with the

Mortgage Loans. In this case, the trust documents establish only one was to transfer assets to the

Trust, which is set forth in Section 2.01 of the PSA. A trust can only act in accordance with tis

governing documents.

8. Section 2.01 of the PSA provides the Depositor Novastar Mortgage Funding

Corporation "does hereby transfer, assign, set over, and otherwise convey in trust to the

Trustee...all right, title and interest of the Depositor" in and to each identified Mortgage Loan.

Novastar Mortgage Funding Corporation must the endorse the notes over to the Trust or in black.

However, the Note is not endorsed over to Novastar Mortgage Funding Corporation. There is no

endorsement from Novastar Mortgage Funding Corporation to the Trust or blank. Instead there

is an undated, not notarized endorsement directly from the original lender to the Trust stamped

onto the last page (5) of the Note. There are no intervening endorsements to the Depositor.

There are no provisions for direct deposit from the original lender to the trust. Accordingly, the

endorsement presented by the Plaintiff does not comply with the terms required by the PSA to

transfer the Note to the Trust. Therefore, there is no effective transfer of the Note to the Trust,

and the Trust acquires no rights in the Note. Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App.

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Div. 2d Dep't 1978). Rather, the type of haste indicated here is that an endorsement was created

in order to facilitate a foreclosure action rather than a proper endorsement to the Trust in

accordance with the Trust's terms.

9. There is no document transferring the Note to the Trust in accordance with its

terms. Under New York law, the trustee under a corporate indenture ... has his [or her] rights

and duties defined, not by the fiduciary relationship, but exclusively by the terms of the

agreement. AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co. , 2008 N.Y. Slip

Op. 5766, 7 (N.Y. 2008). This would also be the law in Illinois under 760 ILCS 5/3. A trustee

has only the authority granted by the instrument under which he holds. Allison & Ver Valen Co.

v. McNee , 170 Misc. 144, 146 (N.Y. Sup. Ct. 1939). New York Estates Powers and Trusts Law

Section 7-2.1(c) authorizes a trustee to acquire property "in the name of the trust as such name is

designated in the instrument creating said trust property." For the transfer of property to the trust

to be effective, the transfer must be done under the terms of the instrument creating the trust and

the transfer must designate the particular trust and the beneficiary. Without that, the assignment

of the Mortgage Note is without merit. Wells Fargo Bank, N.A. v. Farmer , 2008 NY Slip Op

51133U, 6 (N.Y. Sup. Ct. 2008).

10. Under New York law, there are four essential elements for a trust of personal

property: (1) A designated beneficiary; (2) a designated trustee, who must not be the beneficiary;

(3) a fund or other property sufficiently designated or identified to enable title thereto to pass to

the trustee; and (4) the actual delivery of the fund or other property, or of a legal assignment

thereof to the trustee, with the intention of passing legal title thereto to him as trustee. Brown v.

Spohr, 180 N.Y. 201, 209-210 (N.Y. 1904). There is no trust until there is a valid delivery of the

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asset in question to the Trust. If the Trust fails to acquire the property, then there is no trust over

that property which may be enforced. Kermani v. Liberty Mut. Ins. Co., 4 A.D.2d 603

(N.App.Div. 3d Dep't 1957).

11. In this transaction as described by the Complaint, the Note was not transferred

according to the terms of the Trust. New York's Estates Powers and Trust Law Section 7-2.4

states:

§ 7-2.4 Act of trustee in contravention of trust. If the trust is expressed in theinstrument creating the estate of the trustee, every sale, conveyance or other act of thetrustee in contravention of the trust, except as authorized by this article and by anyother provision of law, is void.

Thus The Trust never possessed the Mortgage Note per the terms of the PSA.

12. Additionally, the assignment of the mortgage attached to the Complaint appears to

be an exercise in Robo-signing. The assignment from MERS to the Trust is dated January 20,

2011. An Assignment at that late date is not in compliance with the Trust's governing

documents. The cut-off date for the Trust is September 1, 2006, and the closing date is

September 28, 2006. Therefore, the Mortgage is not assigned to the Trustee until five years after

the closing date of the Trust. This assignment is likely a document created out of air to facilitate

a foreclosure, and there are no provisions in the PSA for the mortgage to be assigned in this

manner.

13. According to the PSA, all mortgages were transferred to the Trust in 2006 and the

mortgages were transferred to the Trust by the Depositer. If the subject mortgage was to be

assigned to the Trust consistent with the PSA and the Trust's REMIC tax status, then all

assignments were done in 2006. An assignment in 2011 would not be consistent with the

requirements of the PSA or the Trust's tax status no matter who did the assignment.

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14. An assignment to the Trust that is inconsistent with the dates for funding the Trust

as set forth in the PSA would have adverse tax consequences for the Trust. This is a pass-thru

REMIC trust. The Internal Revenue Codes provides in 26 U.S.C. 860G(d)(1) that except as

provided in section 860G(d)(2), "if any amount is contributed to a REMIC after the startup day,

there is hereby imposed a tax for the taxable year of the REMIC in which the contribution is

received equal to 100 percent of the amount of such contribution." Pursuant to Section 10.02 of

the PSA the Trust and the Servicer are prohibited from any act that would adversely effect the

Trust's REMIC status.

15. With respect to the Note, the undated, not notarized endorsement from the

original lender does not inform the Court that even this transfer took place within the time

periods mandated by the PSA. See In re Foreclosure Cases , 2007 U.S. Dist. LEXIS 95673 (S.D.

Ohio Dec. 27, 2007).

WHEREFORE, the Court should dismiss this action with prejudice on the ground that the

plaintiff, Deutsche Bank National Trust Company as Trustee as aforesaid, lacks standing to sue.

Respectfully submitted,

By: /s/Theodore A. WoerthweinOne of the Attorneys for the Defendants

Theodore Woerthwein225 W Washington22nd FloorChicago, IL 60606(312) 654-0001

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CERTIFICATE OF SERVICE

I, Theodore A. Woerthwein, an attorney, certify that on August 12, 2011, I caused a copyof the foregoing Defendants Kristen Bodszianowski and Howard Bodzianowski Motion toDismiss to be served upon the persons listed below by the specified method.

By electronic transmission using the Court's electronic case filing system:James Nick Pappas pappas@bcclegal.com

/s/Theodore A. Woerthwein

Exhibit A

Exhibit 4.1

NOVASTAR MORTGAGE FUNDING CORPORATION,as Depositor

NOVASTAR MORTGAGE, INC.,as Servicer and as Sponsor

U.S. BANK NATIONAL ASSOCIATIONas Custodian

and

DEUTSCHE BANK NATIONAL TRUST COMPANYas Trustee

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2006

NovaStar Mortgage Funding Trust, Series 2006-5

NovaStar Home Equity Loan Asset-Backed Certificates, Series 2006-5

TABLE OF CONTENTS

ARTICLE I DEFINITIONS 1

Section 1.01 Defined Terms. 1

Section 1.02 Accounting.Section 1.03 Allocation of Certain Interest Shortfalls. 2

Section 1.04 Calculation of Interest on Certificates. 2

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OFCERTIFICATES 2

Section 2.01 Establishment of the Issuing Entity; Conveyance of Mortgage Loans and Other TrustAssets. 2

Section 2.02 Acceptance of Mortgage Loans by Custodian, on behalf of the Trustee. 5Section 2.03 Repurchase or Substitution of Mortgage Loans by the Sponsor. 7

Section 2.04 Acknowledgement of Trustee. 9Section 2.05 Representations, Warranties and Covenants of the Servicer. 9Section 2.06 Representations and Warranties of the Depositor. 11Section 2.07 Issuance of Certificates. 1 ISection 2.08 Conveyance of the Subsequent Mortgage Loans. 12Section 2.09 Designation Under REMIC Provisions. 12

ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 12

Section 3.01 Servicer to Assure Servicing. 12Section 3.02 Subservicing Agreements Between Servicer and Subservicers. 13Section 3.03 Successor Subservicers. 14Section 3.04 Liability of the Servicer. 15

M-10 Certificates (after taking into account the payment of the Class M- 10 Principal Distribution Amounton such Distribution Date, (x) the Certificate Principal Balance of the Class M-11 Certificates (after takinginto account the payment of the Class M-1 I Principal Distribution Amount on such Distribution Date and(xi) the Certificate Principal Balance of the Class M-12 Certificates immediately prior to such DistributionDate over (y) the lesser of (A) the product of (i) 98.90% and (ii) the aggregate Principal Balance of theMortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments ofprincipal due during the related Due Period, to the extent received or advanced, and unscheduledcollections of principal received during the related Prepayment Period) and (B) the aggregate PrincipalBalance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduledpayments of principal due during the related Due Period, to the extent received or advanced, andunscheduled collections of principal received during the related Prepayment Period) minus $6,500,000.

Appendix A- 16

"Class N Certificate": Any Class M-1ON Certificate, Class M-11N Certificate or Class M-12NCertificate.

"Class R Certificate ": Any one of the Class R Certificates executed, authenticated and deliveredpursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-22, representing the right todistributions as set forth herein, and evidencing the R-I Interest, the R-II Interest, the R-III Interest, the R-IV Interest, the R-V Interest and the R-VI Interest, each the sole "residual interest" in REMIC I, REMIC II,REMIC III, REMIC IV, REMIC V and the Master REMIC, respectively.

"Close of Business": As used herein, with respect to any Business Day, 5:00 p.m. (New York time).

"Closing Date": September 28, 2006.

"Code": The Internal Revenue Code of 1986 as it may be amended from time to time.

"Collection Account": The account or accounts created and maintained by the Servicer pursuant toSection 3.06(d) hereof, which must be an Eligible Account.

"Commission": The Securities and Exchange Commission.

"Compensating Interest ": With respect to any Determination Date, an amount equal to the lesser of(i) the aggregate amount of Prepayment Interest Shortfalls for the related Prepayment Period and (ii) theServicing Fee for the related Distribution Date.

"Corporate Trust Office ": With respect to the Trustee, the Paying Agent and the Certificate Registrar,the corporate trust office at which at any particular time its corporation trust business shall be administered,which office at the date of execution of this Agreement is located at (i) solely for purposes of the transfer,exchange or surrender of Certificates, c/o DB Services Tennessee, 648 Grassmere Park Road, Nashville,TN 37211-3658, Attention: Transfer Unit and (ii) for all other purposes, Deutsche Bank National TrustCompany, 1761 East St. Andrew Place, Santa Ana, CA 92705, Attention: Trust Administration —NS0605.

"Corresponding Class of Master REMIC Certificates": As defined in Exhibit J hereof.

"Corresponding Class of REMIC II Regular Interest": As defined in Exhibit J hereof.

"Corresponding Class of REMIC V Regular Interests": As defined in Exhibit J hereof.

"Corresponding Interest Rate": As set forth in the Cap Interest Rate Schedule.

"Corresponding Interest Rate Strip ": As set forth in the Class CB Certificate Schedule.

"Corresponding Maturity Date ": As set forth in the Cap Interest Rate Schedule.

"Credit Enhancement Percentage ": For any Distribution Date, is equal to (i) the sum of the aggregateCertificate Principal Balance of the Mezzanine Certificates and the

Appendix A-17

Overcollateralization Amount, divided by (ii) the Pool Balance, in each case calculated prior to taking intoaccount the distribution of the Principal Distribution Amount to the Holders of the Certificates then entitledto distributions of principal on such Distribution Date and prior to taking into account distributions ofprincipal on the Mortgage Loans on such Distribution Date.

"Crossover Date": The earlier to occur of (i) the Distribution Date after which the aggregateCertificate Principal Balance of the Class A Certificates is reduced to zero; and (ii) the later to occur of(x) the Distribution Date occurring in October 2009 and (y) the first Distribution Date on which the CreditEnhancement Percentage (calculated for this purpose only after taking into account distributions ofprincipal on the Mortgage Loans but prior to the principal distributions to the Certificates) is greater than orequal to 37.80%.

"Cumulative Loss Percentage": As to any Distribution Date, the percentage equivalent of the fractionobtained by dividing (i) the aggregate amount of Realized Losses on the Mortgage Loans from the Cut-offDate through such Distribution Date by (ii) the sum of the aggregate Principal Balance of the InitialMortgage Loans as of the Cut-off Date plus the Original Pre-Funded Amount.

"Current Interest": For any Distribution Date and each Class of Class A Certificates and MezzanineCertificates the amount of interest accrued during the related Accrual Period at the related Pass-ThroughRate on the Certificate Principal Balance of such Class immediately prior to such Distribution Date, in eachcase, reduced by any Net Prepayment Interest Shortfalls and any Relief Act Shortfalls allocated to thatClass (allocated to each Certificate based on its respective entitlements to interest irrespective of any NetPrepayment Interest Shortfalls or Relief Act Shortfalls for that Distribution Date).

"Custodian": U.S. Bank National Association, a national banking association, and any successorthereto.

"Custodian Fee": With respect to each Distribution Date, the product of (i) $0.20 and (ii) the numberof Mortgage Loans.

"Custodian Fee Rate": The percentage equivalent of a fraction, the numerator of which is (i) theproduct of (a) the Custodian Fee and (b) 12 and the denominator of which is (ii) the aggregate PrincipalBalance of the Mortgage Loans as of the beginning of the Due Period.

"Cut-off Date": With respect to each Initial Mortgage Loan the later of (i) September 1, 2006 and(ii) the date of origination of such Initial Mortgage Loan. With respect to each Subsequent Mortgage Loan,the later of (i) the first day of the month in which such Subsequent Mortgage Loan is acquired by theIssuing Entity and (ii) the date of origination of such Subsequent Mortgage Loan.

"Cut-off Date Aggregate Principal Balance": With respect to the Mortgage Pool, the aggregate of theCut-off Date Principal Balances of the Initial Mortgage Loans of $740,283,081 consisting of $451,136,136related to Group I and $289,146,944 related to Group II.

"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the unpaid Principal Balancethereof as of the Cut-off Date or Subsequent Cut-Off Date, as the case may be (or as of the applicable dateof substitution with respect to an Eligible Substitute Mortgage Loan).

Appendix A-18

"Debt Service Reduction": With respect to any Mortgage Loan, a reduction in the scheduled MonthlyPayment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under theBankruptcy Code, except such a reduction resulting from a Deficient Valuation.

"Defaulted Hedge Termination Payment": Any Hedge Termination Payment required to be made bythe Supplemental Interest Trust to a Hedge Counterparty pursuant to a Hedge Agreement as a result of an

All Net Prepayment Interest Shortfalls and Relief Act Shortfalls shall be allocated on eachDistribution Date among the Classes of each of REMIC I, REMIC II, REMIC III, REMIC IV and REMICV in the proportion that Net Prepayment Interest Shortfalls and Relief Act Shortfalls are allocated to therelated Master REMIC Regular Interests.

Section 1.04 Calculation of Interest on Certificates .

Unless otherwise specified, all calculations in respect of interest on the Class A Certificates andthe Mezzanine Certificates shall be made on the basis of the actual number of days elapsed in the relatedAccrual Period on the basis of a 360-day year and all other calculations of interest described herein shall bemade on the basis of a 360-day year consisting of twelve 30-day months.

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01 Establishment of the Issuing Entity; Conveyance of Mortgage Loans and OtherTrust Assets .

The parties do hereby create and establish a common law trust, pursuant to the laws of the Stateof New York and this Agreement, the Issuing Entity, which, for convenience, shall be known as "NovaStarMortgage Funding Trust, Series 2006-5."

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer,assign, set over and otherwise convey in trust to the Trustee without recourse for the benefit of theCertificateholders all the right, title and interest of the Depositor, including any security interest therein forthe benefit of the Depositor, in and to (i) each Mortgage Loan identified on the Mortgage Loan Schedule,including the related Cut-off Date. Principal Balance, all interest accruing thereon on and after the Cut-offDate and all collections in respect of interest and principal due after the Cut-off Date; (ii) property whichsecured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu offoreclosure; (iii) its interest in any insurance policies in respect of the Mortgage Loans; (iv) its interest inthe MI Policies; (v) the rights of the Depositor under the Purchase Agreement; (vi) its interest in the HedgeAgreements;

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(vii) all other assets included or to be included in the Trust Fund; and (viii) all proceeds of any of theforegoing. Such assignment includes all interest and principal due to the Depositor or the Servicer after therelated Cut-off Date with respect to the Mortgage Loans.

In connection with such transfer and assignment, the Sponsor, on behalf of the Depositor, doeshereby deliver to, and deposit with the Custodian, as the designated agent holding on behalf of the Trustee,the following documents or instruments with respect to each Initial Mortgage Loan so transferred andassigned and the Sponsor, on behalf of the Depositor, shall, in accordance with Section 2.08, deliver orcause to be delivered to the Custodian, as the Trustee's designated agent, with respect to each SubsequentMortgage Loan, the following documents or instruments (with respect to each Mortgage Loan, a "MortgageFile"):

(i) the original Mortgage Note endorsed to "Deutsche Bank National Trust Company, asTrustee for the NovaStar Home Equity Loan Asset-Backed Certificates, Series 2006-5" or inblank;

(ii) the original Mortgage with evidence of recording thereon, or, if the original Mortgagehas not yet been returned from the public recording office, a copy of the original Mortgagecertified by the Sponsor or the public recording office in which such original Mortgage hasbeen recorded, and if the Mortgage Loan is registered on the MERS System, such Mortgage

shall include thereon a statement that it is a MOM Loan and shall include the MIN for suchMortgage Loan;

(iii) unless the Mortgage Loan is registered on the MERS System, an original assignment(which may be included in one or more blanket assignments if permitted by applicable law) ofthe Mortgage endorsed to "Deutsche Bank National Trust Company, as Trustee for theNovaStar Home Equity Loan Asset-Backed Certificates, Series 2006-5", and otherwise inrecordable form;

(iv) originals of any intervening assignments of the Mortgage showing an unbrokenchain of title from the originator thereof to the Person assigning it to the Trustee (or to MERS,if the Mortgage Loan is registered on the MERS System), and noting the presence of a MIN (ifthe Mortgage Loan is registered on the MERS System), with evidence of recording thereon, or,if the original of any such intervening assignment has not yet been returned from the publicrecording office, a copy of such original intervening assignment certified by the Sponsor or thepublic recording office in which such original intervening assignment has been recorded;

(v) the original policy of title insurance (or a commitment for title insurance, if the policyis being held by the title insurance company pending recordation of the Mortgage); and

(vi) a true and correct copy of each assumption, modification, consolidation orsubstitution agreement, if any, relating to the Mortgage Loan.

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If a material defect in any Mortgage File is discovered which may materially and adverselyaffect the value of the related Mortgage Loan, or the interests of the Trustee or the Certificateholders insuch Mortgage Loan, including if any document required to be delivered to the Custodian has not beendelivered (provided that a Mortgage File will not be deemed to contain a defect for an unrecordedassignment under clause (iii) above for 180 days following submission of the assignment if the Sponsor hassubmitted such assignment for recording pursuant to the terms of the following paragraph), the Sponsorshall cure such defect or repurchase the related Mortgage Loan at the Repurchase Price or substitute anEligible Substitute Mortgage Loan for the related Mortgage Loan upon the same terms and conditions setforth in Section 3.01 of the Purchase Agreement as to the Initial Mortgage Loans and the SubsequentMortgage Loans and Section 2.02(c) of the Purchase Agreement as to the Subsequent Mortgage Loans forbreaches of representations and warranties.

Promptly after the Closing Date in the case of an Initial Mortgage Loan or, in the case of aSubsequent Mortgage Loan, promptly after the Subsequent Transfer Date (or after the date of transfer ofany Eligible Substitute Mortgage Loan), the Sponsor at its own expense shall complete and submit forrecording in the appropriate public office for real property records each of the assignments referred to inclause (iii) above, with such assignment completed in favor of the Trustee, excluding any Mortgage Loanthat is registered on the MERS System, if MERS is identified on the Mortgage, or on a properly recordedassignment of Mortgage as the mortgagee of record. While such assignment to be recorded is beingrecorded, the Custodian shall retain a photocopy of such assignment. If any assignment is lost or returnedunrecorded to the Custodian because of any defect therein, the Sponsor is required to prepare a substituteassignment or cure such defect, as the case may be, and the Sponsor shall cause such substitute assignmentto be recorded in accordance with this paragraph.

In instances where an original Mortgage or any original intervening assignment of Mortgage isnot, in accordance with clause (ii) or (iv) above, delivered by the Sponsor to the Custodian, on behalf of theTrustee, prior to or on the Closing Date in the case of an Initial Mortgage Loan or, in the case of aSubsequent Mortgage Loan, promptly after the Subsequent Transfer Date, the Sponsor will deliver or causeto be delivered the originals of such documents to the Custodian, on behalf of the Trustee, promptly uponreceipt thereof.

In connection with the assignment of any Mortgage Loan registered on the MERS System,promptly after the Closing Date in the case of an Initial Mortgage Loan or, in the case of a SubsequentMortgage Loan (or after the date of transfer of any Eligible Substitute Mortgage Loan), the Sponsor further