DYKEMA GOSSETT•A PROFESSIONAL LIMITED LIABILITY COMPANY•400 RENAISSANCE CENTER•DETROIT, MICHIGAN 48243

UNITED STATES DISTRICT COURT

IN THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

STAMATIA KOSTOPOULOS,

Plaintiff,

vs.

ONEWEST BANK, FSB, and

FINANCIAL FREEDOM

ACQUISITION, LLC, f/k/a Financial

Freedom Senior Funding Corporation,

Defendants.

Civil Action No. 2:14-cv-12923-ACMJH

Honorable Avern Cohn

Magistrate Michael J. Hluchaniuk

Ziyad Kased (P72237)

KASED LAW PLLC

Attorneys for Plaintiff

625 E. Big Beaver Rd., Ste 205

Troy, MI 48083

(248) 680-7300

ziyadkased@gmail.com

Robert Hugh Ellis (P72320)

DYKEMA GOSSETT PLLC

Attorneys for Defendants

400 Renaissance Center

Detroit, MI 48243

(313) 568-5448

rellis@dykema.com

DEFENDANTS’ ANSWER TO COMPLAINT

Defendants OneWest Bank N.A. (formerly known as OneWest Bank, FSB)

(“OneWest”) and Financial Freedom Acquisition LLC (collectively,

“Defendants”), for their answer to Plaintiff’s complaint, state as follows:

GENERAL DENIAL

Defendants deny that Financial Freedom Acquisition LLC was formerly

known as Financial Freedom Senior Funding Corporation and further deny each

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DYKEMA GOSSETT•A PROFESSIONAL LIMITED LIABILITY COMPANY•400 RENAISSANCE CENTER•DETROIT, MICHIGAN 48243

and every allegation of Plaintiff’s Complaint, except as specifically admitted,

answered, or otherwise qualified herein.

1. Plaintiff is a resident of the City of Warren, Macomb County,

Michigan.

ANSWER: Defendants lack knowledge or information sufficient to form a

belief as to the truth of the allegations contained in this paragraph.

2. Defendant OneWest Bank, FSB (hereinafter “OneWest Bank”) is a

Federal Savings Bank with its principle place of business in Pasadena, California.

In 2009 OneWest Bank acquired certain assets and liabilities of IndyMac Federal

Bank, FSB and of Financial Freedom Senior Funding Corporation, including the

reverse mortgage which is the subject matter of this case.

ANSWER: Defendants deny that OneWest Bank is a federal savings bank.

OneWest was previously a federal savings association, but now is a national

banking association known as “OneWest Bank, N.A.” with its main office in

Pasadena, California. OneWest Bank admits that it acquired certain assets of

IndyMac Federal Bank, FSB. OneWest denies that it acquired assets and liabilities

of Financial Freedom Senior Funding Corporation. Instead, certain assets of

Financial Freedom Senior Funding Corporation were acquired by Financial

Freedom Acquisition LLC, a wholly owned subsidiary of OneWest Bank. In July

2011, the assets of Financial Freedom Acquisition LLC were transferred and

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assigned to OneWest Bank. Defendants lack knowledge or information sufficient

to form a belief as to the truth of the remaining allegations contained in this

paragraph.

3. Defendant Financial Freedom Acquisition, LLC (hereinafter

“Financial Freedom”) is the successor in interest to Financial Freedom Senior

Funding Corporation, the originator and servicer of the reverse mortgage which is

the subject matter of this case. Defendant Financial Freedom currently operates as

a subsidiary of defendant One West Bank in Pasadena, California and continues to

act as the servicer of the reverse mortgage which is the subject matter of this case.

ANSWER: Defendants admit that Financial Freedom Acquisition LLC is a

wholly owned subsidiary of OneWest Bank. Defendants admit that their records

illustrate that Financial Freedom Senior Funding Corporation was the originating

lender. Defendants deny that Financial Freedom Acquisition LLC is the

“successor in interest” to Financial Freedom Senior Funding Corporation; instead

Financial Freedom Acquisition LLC acquired certain assets from Financial

Freedom Senior Funding Corporation. Defendants deny that Financial Freedom

Acquisition LLC, as defined in the context of the Complaint, is the current servicer

of the reverse mortgage that is the subject of this case. Instead, the current servicer

of the reverse mortgage that is the subject of this case is OneWest Bank N.A.

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Defendants lack knowledge or information sufficient to form a belief as to the truth

of the remaining allegations contained in this paragraph.

4. The cause of action, hereinafter stated, arose in Macomb County,

Michigan and involves real property located in Macomb County, Michigan.

ANSWER: Admitted.

5. The amount in controversy herein exceeds the sum of Twenty-Five

Thousand Dollars ($25,000.00), exclusive of interest and costs.

ANSWER: Defendants deny all liability to Plaintiff, but admit that the

amount in controversy is sufficient to satisfy the jurisdictional requirements of this

Court.

6. On September 28, 2006 plaintiff and her now deceased husband,

Konstantinos Kostopoulos, were granted an Adjustable Rate Home Equity

Conversion Mortgage, commonly known as a reverse mortgage, by Financial

Freedom Senior Funding Corporation, under which their residential home, located

in the City of Warren, Macomb County, Michigan was given as security. A copy

of said Adjustable Rate Home Equity Conversion Mortgage (hereinafter “the

Reverse Mortgage”) is attached hereto as Exhibit A and incorporated by reference

herein.

ANSWER: Defendants deny that Plaintiff is or was a borrower under the

referenced loan. Defendants deny that Plaintiff executed any agreement under

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which she is identified as a “Borrower,” as that term is defined. Defendants deny

that the document attached as Exhibit A contains an accurate copy of the subject

mortgage, at the time of its execution by the parties. Defendants admit that the

borrower, Mr. Kostopoulos, obtained the loan from Financial Freedom Senior

Funding Corporation on September 26, 2006. Defendants admit that Plaintiff

pledged her interest in the subject real property as security for Mr. Kostopoulos’s

loan. Defendants admit that the mortgage was recorded, in a modified form, with

the Macomb County register of deeds, and that it is a first priority encumbrance on

the Property. Defendants deny all remaining allegations contained in this

paragraph as untrue.

7. Under the terms the Reverse Mortgage and related loan documents

referenced therein, Financial Freedom Senior Funding Corporation, as Lender,

agreed to make advances to plaintiff and her husband from time to time, up to a

maximum principal amount of $277,500.00.

ANSWER: The referenced documents speak for themselves, and

Defendants deny the allegations contained in this paragraph to the extent they are

inconsistent with the referenced documents. Defendants deny that the referenced

documents contemplate any advances or disbursements to Plaintiff. Defendants

deny that Plaintiff is a “Borrower” under any agreement. Defendants admit only

that the controlling documents contemplate that Mr. Kostopoulos only may

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borrower funds up to $277,500.00. Defendants deny any remaining allegations

contained in this paragraph as untrue.

8. That under the terms of the Reverse Mortgage the sums so advanced

were not due and payable until January 26, 2076, unless paid earlier by virtue of an

acceleration of the debt under paragraph 9 of the Reverse Mortgage, which

paragraph is entitled: “Grounds for Acceleration of Debt.”

ANSWER: The referenced documents speak for themselves, and

Defendants deny the allegations contained in this paragraph to the extent they are

inconsistent with the referenced documents. Defendants deny that Plaintiff is a

“Borrower” under any agreement. Defendants deny the referenced mortgage

solely controls the acceleration of any indebtedness. Defendants admit only that

Mr. Kostopoulos’s debt would not be due and payable until there was an

acceleration event under paragraph 9 of the mortgage document signed by Plaintiff

and Mr. Kostopoulos, or under paragraph 7 of the related promissory note signed

by Mr. Kostopoulos only. Defendants deny any remaining allegations contained in

this paragraph as untrue.

9. Consistent with wide-spread media marketing advertisements for

reverse mortgages and the common understanding of reverse mortgages generally,

paragraph 9 of the Reverse Mortgage involved in this case generally allows

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acceleration of the debt only when the last borrower leaves the home (that is to say,

dies or moves out).

ANSWER: Defendants admit only that the controlling loan documents

contemplate acceleration when there is no remaining “Borrower” in the property.

Defendants deny that Plaintiff is or was a “Borrower.” Defendants lack knowledge

or information sufficient to form a belief as to the truth of the remaining

allegations contained in this paragraph.

10. As more fully appears from the affidavit of plaintiff filed herewith,

none of the grounds for acceleration of the debt set forth in paragraph 9 of the

Reverse Mortgage have occurred or exist — plaintiff, the surviving borrower, as

that term is used in paragraph 9 of the Reverse Mortgage, continues to own and

reside at the home to this day and all other obligations of the borrower have, at all

times, been performed (the property has continually been well maintained, taxes

have always been paid and adequate insurance kept in place). A copy of said

affidavit is attached hereto as Exhibit B and incorporated by reference herein.

ANSWER: Defendants lack knowledge or information sufficient to form a

belief as to the truth of the allegations concerning Plaintiff’s current ownership or

residency in the subject real property, or concerning the allegations in the affidavit

referenced as Exhibit B. Defendants deny all remaining allegations contained in

this paragraph as untrue.

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11. As also reflected in the affidavit of plaintiff no notice that the loan

was due and payable pursuant to acceleration of the debt under paragraph 9 of the

Reverse Mortgage was ever given by defendants to plaintiff despite the fact that

such notice is specifically required by paragraph 9 (d) of the Reverse Mortgage, if

and when the debt is properly accelerated by the lender.

ANSWER: Denied as untrue.

12. Notwithstanding the fact that none of the grounds for acceleration of

the debt set forth in paragraph 9 of the Reverse Mortgage have occurred or exist,

that there has been absolutely no default by plaintiff whatsoever and that plaintiff’

has in fact fully complied with all of the borrower’s obligations under the Reverse

Mortgage, on May 19, 2014 defendants, in blatant breach of said mortgage,

commenced foreclosure by advertisement.

ANSWER: Defendants admit only that foreclosure by advertisement was

properly commenced. Defendants deny all remaining allegations as untrue.

13. By virtue of such foreclosure by advertisement the foreclosure sale of

plaintiff’s home was scheduled to take place at 10:00 a.m. on June 20, 2014, then

adjourned until July 11, 2014. Plaintiff is informed and believes that the

foreclosure sale has now been adjourned once again, yet the foreclosure itself has

not been rescinded but remains pending as of the date hereof.

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ANSWER: Defendants admit that the referenced foreclosure sale has been

adjourned. Defendants admit that the sale and the foreclosure remain pending.

Defendants deny that foreclose is improper, and deny all remaining allegations as

untrue.

14. Under the terms of the Reverse Mortgage, attached as Exhibit A, the

foreclosure by advertisement commenced by the plaintiffs and the impending

foreclosure sale of plaintiff’s home is patently wrongful and entirely at odds with

the express terms of the Reverse Mortgage.

ANSWER: Denied as untrue.

15. That that as a result of defendants having wrongfully commenced

foreclosure by advertisement of the Reverse Mortgage, plaintiff is justly fearful

that unless restrained by order of this Court, defendants will wrongly proceed to go

forward with such foreclosure and as a consequence thereof; plaintiff will suffer

immediate and irreparable injury, harm and damage through the loss of her home

at the foreclosure sale due to her inability to immediately pay off the improperly

accelerated debt, or to thereafter redeem the property.

ANSWER: Denied as untrue.

16. That that as a further consequence of defendants having wrongfully

commenced foreclosure by advertisement, plaintiff has suffered, and will continue

to suffer, additional injury, harm and damage, including, but not limited to:

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a) Incurring significant and burdensome expenses for legal fees

and costs expended to preserve her ownership of and her right

to continue to occupy the only home she has known for the last

40 years, including among other such expenses, the cost of

having to bring and maintain this action;

b) Suffering extreme mental anguish and distress engendered by

the fear and horror of potentially becoming homeless due to the

outlandish conduct on the part of the defendants in wrongfully

commencing foreclose of the Reverse Mortgage and persisting

in the continuation of such foreclosure even after plaintiff

objected and made known to defendants the gross impropriety

and wrongfulness of their conduct in doing so.

ANSWER: Denied as untrue.

AFFIRMATIVE DEFENSES

Defendants have not yet had the opportunity to complete their investigation

and discovery in this matter and thereby rely on such of the following defenses as

may prove applicable after discovery and at trial:

1. Plaintiff’s Complaint fails to state a claim against Defendants upon

which relief may be granted. Plaintiff is not a “Borrower” under any

applicable document, and therefore there is no surviving borrower in

the subject real property, and foreclosure is proper.

2. Plaintiff’s claims are precluded by unclean hands and estoppel.

Plaintiff is seeking a windfall and to utilize the judicial process to

rescind her prior agreements.

3. Plaintiff’s claims may be precluded by the applicable statutes of

limitation and repose.

4. Plaintiff’s claims are barred in whole or in part by waiver, laches,

collateral estoppel, claim preclusion, and res judicata.

5. Plaintiff’s claims are barred in whole or in part by the existence of

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relevant contracts.

6. Plaintiff’s claims are barred in whole or in part by release.

RESERVATION OF RIGHT

Defendants reserve their right to file such amended answers and such

additional defenses as may be appropriate upon completion of its investigation and

discovery.

Date: November 14, 2014

Respectfully submitted,

DYKEMA GOSSETT PLLC

By: /s/Robert Hugh Ellis

Robert Hugh Ellis (P72320)

DYKEMA GOSSETT PLLC

Attorneys for Defendants

400 Renaissance Center

Detroit, MI 48243

(313) 568-5448

rellis@dykema.com

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DYKEMA GOSSETT•A PROFESSIONAL LIMITED LIABILITY COMPANY•400 RENAISSANCE CENTER•DETROIT, MICHIGAN 48243

CERTIFICATE OF SERVICE

I certify that on November 14, 2014, I electronically filed the foregoing

paper with the Clerk of the Court using the CM/ECF system which will send

notification of such filing to all parties by operation of the Court’s electronic filing

system.

DYKEMA GOSSETT PLLC

By: /s/Robert Hugh Ellis

Robert Hugh Ellis (P72320)

Attorneys for the Defendants

rellis@dykema.com

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