INTHECIRCUITCOURTOFTHEFOURTHJUDICIALCIRCUIT,INANDFORDUVALCOUNTY,FLORIDACASENUMBER:16-2006-CA-001265-XXXX-MADiv.CV-DHSBCBANKUSA,NATIONALASSOCIATION,ASTRUSTEEFORHOMEEQUITYLOANTRUSTSERIESAE2005-HE5,Plaintiff,vs.MARILYNG.HARLEY,ETAL.,Defendants.

DEFENDANT'SSUPPLEMENTALMEMORANDUMINOPPOSITIONTOSUMMARYJUDGMENT

Comesnowthedefendantandsubmitsthissupplementalmemoranduminoppositiontoplaintiffsmotionforsummaryjudgmentandforattorney'fees.ThissupplementalmemorandumaddressestherecentcasesoftheFloridaappellatecourtsandacontrollingfederalbankruptcycourtdecisiondecidedsincethismatterwasadjournedontheplaintiffsmotionforsummaryjudgment.Also,astheplaintiffhasrecentlyfiledthenoteandmortgageandanallongethatisnotaffixedtothenote,thedefendantaddressesalsoaddressestheseissues.

CERTIFICATEOFSERVICETheundersignedcertifiesthatatruecopyofthisdocumenthasbeenhanddeliveredonthisday24thdayofMarch,2010to:Michael

Winston,CarltonFields,P.A.,CityPlaceTowers,525OkeechobeeBlvd.Suite1200,WestPalmBeach,Fl.33401Fax:561659-7368Andbymailto:DonnaS.GlickLawOfficesofDavd

Stern,P.A.AttorneyforPlaintiff900SouthPineIslandRoad,Suite400Plantation,FI.33324-3920Fax:954233-8577

Apr

-Carrie

Charney,Fla.Bar.No.:

3104f5

126W.AdamsSt~etJacksonville,Flori~202Telephone:(904)356-8371,ext.373Facsimile:(904)224-1587april.charney@jaxlegalaid.org

AttorneysforSeparateDefendant

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MEMORANDUMOFLAWINSUPPORTOFMOTIONTODISMISSAMENDEDCOMPLAINTINTRODUCTIONTheassignmentofthesubjectMortgageandNotefromMortgageElectronicRegistrationSystems,Inc.(MERS)toHSBCBank,NationalAssociation,asTrusteeforACESecuritiesCorp.HomeEquityLoanTrust,Series2005-HE5(HSBC),datedJanuary30,2006isvoid.HSBChasnostandingtopursuethisactionandhasfailedtoinvokethesubjectmatterjurisdictionofthiscourt.Thisactionmustbedismissed.

I.HSBCBank,NA,asTrusteeforACESecuritiesCorp.HomeEquityLoanTrust,Series2005-HE5lackedthelegalcapacitytotakeanassignmentofanon-performing/non-conformingloanindefault.

HSBCappearsinthiscasepursuanttoaPoolingandServicingAgreement(PSA),thetrustinstrumentthatsetsforththepowersandlimitationsofHSBCasTrusteeforACESecuritiesCorp.HomeEquityLoanTrust,Series2005-HE5.ThePSAsetsforthalltherights,powers,obligations,anddutiesoftheTrust.ThefourcornersofthepoolingandservicingagreementbindtheTrusttotheonlyactionswhichcanlawfullybetakenwithrespecttotheadministrationofitsassets.Further,thefourcornersofthePSAestablishtheonlymechanismbywhichthisNewYorkCorporateTrustmayacquire,transfer,disposeof,orsellanyasset.ThepoolingandservicingagreementisfiledofrecordwiththeSecuritiesandExchangeCommissionandisamatterofpublicrecord.ThePSAatissueinthisactioncanbefoundat:http://www.secinfo.com/dgTm6.z2fp.d.htm.ThetermsofthepoolingandservicingagreementarefiledunderoathwiththeSECandthepartiestothepoolingandservicingagreementhaverepresentedunderoathtotheSecuritiesandExchangeCommissionanditsinvestors,certificateholders,andcounterparties,thattheentireagreementoftheentities,parties,agents,servants,withrespecttothisTrustarecontainedwithinthepoolingandservicingagreementanditsexhibits.

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Section11.02ofthePSAtitled"ProhibitedTransactionsandActivities"prohibitstheHSBCfromacquiringthesubjectmortgageinthisactionbecauseSection11.02states:NoneoftheDepositor,theServicer,theSecuritiesAdministrator,theMasterServicerortheTrusteeshallsell,disposeoforsubstituteforanyoftheMortgageLoans(exceptinconnectionwith(i)theforeclosureofaMortgageLoan,includingbutnotlimitedto,theacquisitionorsaleofaMortgagedPropertyacquiredbydeedinlieuofforeclosure,(ii)thebankruptcyofREMICI,(iii)theterminationofREMICIpursuanttoArticleXofthisAgreement,(iv)asubstitutionpursuanttoArticleIIofthisAgreementor(v)apurchaseofMortgageLoanspursuanttoArticleIIofthisAgreement),noracquireanyassetsforanyTrustREMIC(otherthanREOPropertyacquiredinrespectofadefaultedMortgageLoan),norsellordisposeofanyinvestmentsintheCollectionAccountortheDistributionAccountforgain,noracceptanycontributionstoanyTrustREMICaftertheClosingDate(otherthanaQualifiedSubstituteMortgageLoandeliveredinaccordancewithSection2.03),unlessithasreceivedanOpinionofCounsel,addressedtotheTrusteeandtheSecuritiesAdministrator(attheexpenseofthepartyseekingtocausesuchsale,disposition,substitution,acquisitionorcontributionbutinnoeventattheexpenseoftheTrustee)thatsuchsale,disposition,substitution,acquisitionorcontributionwillnot(a)affectadverselythestatusofanyTrustREMICasaREMICor(b)causeanyTrustREMICtobesubjecttoataxon"prohibitedtransactions"or"contributions"pursuanttotheREMICProvisions.A.ThesubjectmortgagewasnotoriginalorqualifiedfortransfertoHSBCaTrustee.TheAceSecuritiesCorp.HomeEquityLoanTrust,Series200S-HESiswhatisknownasaRealEstateMortgageInvestmentConduit(REMIC).See26USC§860D.Essentially,aREMICisaninvestmentvehicleinwhichtransferablesharesinatrustaresoldtoinvestors,theresofthetrustconsistingofmortgagesandpromissorynotes.ThesesecuritizedtrustsaresubjecttostrictregulationtoqualifyforfavorabletaxtreatmentasaREMICundertheIRSCode.28USC§§860A-860G.TheREMICprovisionsoftheIRStaxcodeprovideexplicitinstructionwithrespecttothetransferofmortgageassetsintoatrusttoreceivethisspecialtaxstatuspursuanttotheIRStaxcode.Further,theREMICportionoftheIRStaxcodedefinestheactivitiesthatdisqualifyatrustforREMICtaxtreatment.PursuanttothetermsofthepoolingandservicingagreementthisTrustcannotbetheownerofDefendant'sloan.

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