DEBRA A. VALENTINE
General Counsel

LINDA M. STOCK (Bar No. 143774)
Federal Trade Commission
10877 Wilshire Blvd., Ste. 700
Los Angeles, California 90024
Telephone: (310) 824-4343 or 824-4316
Fax: (310) 824-4380
Attorneys for Plaintiff

FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
BARRY COOPER, an individual,
doing business as Barry Cooper Properties,
Defendant.

Civil No.
CONSENT JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND MONETARY RELIEF

Plaintiff, Federal Trade Commission ("Commission"), has filed a Complaint for a permanent injunction and other equitable relief pursuant to Sections 5(a) and 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  45(a) and 53(b), and Section 108(c) of the Truth in Lending Act ("TILA"), 15 U.S.C.  1607(c), alleging that defendant Barry Cooper, an individual doing business as Barry Cooper Properties, has violated TILA, 15

U.S.C.  1601-1666j, as amended, including, but not limited to, the Home Ownership and Equity Protection Act of 1994 ("HOEPA"), as amended, TILA's implementing Regulation Z, 12 C.F.R. 226, as amended, and Section 5(a) of the FTC Act, 15 U.S.C.  45(a), as amended.

Plaintiff and the defendant, by and through their respective counsel, have agreed to entry of this Consent Judgment and Order by this Court, without trial or adjudication of any issue of fact or law. The said parties having requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED, AND DECREED as follows:

FINDINGS

1. This Court has jurisdiction over the defendant and the subject matter of this action. Venue in the Central District of California is proper.

2. The Complaint states a claim upon which relief may be granted under Sections 101 to 171 of TILA, 15 U.S.C.  1601-1666j, and Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C.  45(a) and 53(b).

3. The Commission has the authority under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C.  45(a) and 53(b), and Section 108(c) of TILA, 15 U.S.C.  1607(c), to seek the relief it has requested.

4. The activities of the defendant are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

5. The defendant, while neither admitting nor denying any of the allegations of wrongdoing set forth in the Complaint, stipulates and agrees to entry of this Order.

6. Plaintiff and the defendant waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order, and the defendant waives any right that may arise under the Equal Access to Justice Act, 28 U.S.C.  2412.

7. Entry of this Order is in the public interest.

DEFINITIONS

As used in this Order:

A. The terms "annual percentage rate," "consumer," "consumer credit," "consummation," "credit," "creditor," "dwelling," "finance charge," "mortgage," "open-end credit," "person," "points and fees," "residential mortgage transaction," and "reverse mortgage transaction" are defined as set forth in Sections 103 and 128 of TILA, 15 U.S.C.  1602 and 1638, and Sections 226.2, 226.4, 226.18, 226.22, 226.32, and 226.33 of Regulation Z, 12 C.F.R.  226.2, 226.4, 226.18, 226.22, 226.32, and 226.33.

B. The term "HOEPA" means the Home Ownership and Equity Protection Act of 1994 which, inter alia, amended TILA by adding Section 129 of TILA, 15 U.S.C.  1639, and is implemented by, inter alia, Sections 226.31 and 226.32 of Regulation Z, 12 C.F.R.  226.31 and 226.32.

C. The term "HOEPA mortgage loan" means a consumer credit transaction consummated on or after October 1, 1995, that is secured by the consumer's principal dwelling, other than a residential mortgage transaction, a reverse mortgage transaction or an open-end credit plan, in which: (1) the annual percentage rate at consummation of the transaction will exceed by more than 10 percentage points the yield on Treasury securities having comparable periods of maturity to the loan maturity as of the fifteenth day of the month immediately preceding the month in which the application for the extension of credit is received by the creditor; or (2) the total points and fees payable by the consumer at or before loan closing will exceed the greater of 8% of the total loan amount or $400 (adjusted annually by the Board of Governors of the Federal Reserve System ("FRB") on January 1 by the annual percentage change in the Consumer Price Index that was reported on June 1 of the preceding year), which is covered by HOEPA, pursuant to Section 129 of TILA, 15 U.S.C.  1639, and Section 226.32 of Regulation Z, 12 C.F.R.  226.32. As used herein, the "total loan amount" is calculated as described in Section 226.32(a)(1)(ii)-1 of the FRB Official Staff Commentary on Regulation Z, 12 C.F.R.  226.32(a)(1)(ii)-1, Supp. 1.

D. The term "open HOEPA mortgage loan" means a HOEPA mortgage loan that, on the date of entry of this Order, has not been paid off in full or foreclosed upon.

E. The term "Regulation Z" means the regulation the FRB promulgated to implement TILA and HOEPA, 12 C.F.R. 226, as amended. The term also includes the FRB Official Staff Commentary on Regulation Z, 12 C.F.R. 226, Supp. 1, as amended.

F. The term "TILA" means the Truth in Lending Act, 15 U.S.C.  1601-1666j, as amended.

ORDER

 I.
Injunction Against HOEPA, TILA and Related FTC Act Violations

IT IS THEREFORE ORDERED that the defendant, his successors, assigns, officers, agents, servants, employees, and all other persons or entities in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any business, entity, corporation, subsidiary, division or other device, in connection with offering or making any HOEPA mortgage loan, are permanently restrained and enjoined from:

A. Including a prohibited "prepayment penalty" provision, in violation of Section 129(c) of TILA, 15 U.S.C.  1639(c), Section 226.32(d)(6) of Regulation Z, 12 C.F.R.  226.32(d)(6), and Section 5(a) of the FTC Act, 15 U.S.C.  45(a);
 
B. Engaging in a pattern or practice of extending credit to a consumer based on the consumer's collateral if, considering the consumer's current and expected income, current obligations, and employment status, the consumer will be unable to make the scheduled payments to repay the obligation, in violation of Section 129(h) of TILA, 15 U.S.C.  1639(h), Section 226.32(e)(1) of Regulation Z, 12 C.F.R.  226.32(e)(1), and Section 5(a) of the FTC Act, 15 U.S.C.  45(a); and
 
C. Failing to comply with any other provision of HOEPA, TILA, Regulation Z, and the FTC Act.

II.
Payment of Consumer Redress

IT IS FURTHER ORDERED that the defendant, his successors and assigns, jointly and severally, shall pay redress to consumers in the amount of $25,000 (twenty-five thousand dollars). The defendant shall transfer the sum of $25,000 into an escrow account designated by the plaintiff, on or before five (5) days after the date of entry of this Order. This sum shall be used to provide redress to consumers who obtained HOEPA mortgage loans between October 1, 1995, and the date of entry of this Order, and to pay any attendant expenses of administration. The FTC shall determine, in its sole discretion, which consumers are eligible for redress as well as the amounts to be paid.

A. If the Commission determines, in its sole discretion, that redress to consumers is wholly or partially impracticable, any funds not so used shall be deposited into the United States Treasury. The defendant shall be notified as to how funds are disbursed, but shall have no right to contest the manner of distribution chosen by the Commission.
 
B. Notwithstanding any other provision of this Order, the defendant agrees that if he fails to meet the payment obligations set forth in Section II of this Order, the defendant shall pay the costs and attorneys fees incurred by the Commission and its agents in any attempts to collect amounts due pursuant to this Order. The defendant further agrees that the facts as alleged in the Complaint filed in this action shall be taken as true in any subsequent litigation filed by the Commission to enforce its rights pursuant to this Order, including but not limited to, a nondischargeability complaint in any subsequent bankruptcy proceeding.

III.
Performance Bond Requirement

IT IS FURTHER ORDERED that the defendant, whether directly or indirectly, in concert with others, or through any intermediary, business entity or device, is restrained and enjoined, for a period of five (5) years from date of entry of this Order, from offering or extending any HOEPA mortgage loan, unless he first obtains a performance bond in the principal amount of $150,000 (one hundred-fifty thousand dollars).

A. Such bond shall be conditioned upon the defendant's compliance with TILA, HOEPA, Regulation Z, Section 5(a) of the FTC Act, 15 U.S.C.  45(a), and the provisions of the Order. Such bond shall be deemed continuous and remain in full force and effect as long as the defendant continues in the business of offering or extending HOEPA mortgage loans or until five (5) years from the date of entry of this Order, whichever comes first. Such bond shall cite this Order as the subject matter of the bond, and shall provide surety thereunder against financial loss due, in whole or in part, to any violation of TILA, HOEPA, Regulation Z, Section 5(a) of the FTC Act, or any provision of this Order;
 
B. Such bond shall be an insurance agreement providing surety for financial loss issued by a surety company that is admitted to conduct surety business in each of the states in which the defendant does business and that holds a Federal Certificate of Authority as Acceptable Surety on Federal Bond and Reinsuring. The defendant shall be deemed to be doing business in each state in which the defendant, or any entity through which the defendant is offering or extending consumer credit, maintains an office or contacts any consumer. Such bond shall be in favor of both (1) the Commission for the benefit of consumers injured due, in whole or in part, to any violation of TILA, HOEPA, Regulation Z, Section 5(a) of the FTC Act, or any provision of this Order, and (2) any consumer so injured. Such bond shall be executed in favor of the Commission or in favor of any injured consumer if the Commission or the consumer demonstrates to this Court, or a magistrate thereof, by a preponderance of the evidence, that a defendant has violated any condition of the bond;
 
C. The defendant shall not disclose the existence of any performance bond required by Section III of this Order to any consumer without also disclosing clearly and prominently, at the same time, in writing: "AS REQUIRED BY ORDER OF THE U.S. DISTRICT COURT IN SETTLEMENT OF CHARGES REGARDING PRACTICES RELATING TO THE OFFERING AND EXTENDING OF CONSUMER CREDIT";
 
D. The defendant shall provide a copy of the bond required by Section III of this Order to Regional Director, Federal Trade Commission, 10877 Wilshire Boulevard, Suite 700, Los Angeles, California 90024, at least (10) days prior to the commencement of any activity or business for which the bond is required; and
 
E. The bond required by Section III of this Order shall be in addition to, and not in lieu of, any other bond required by law.

IV.
Reformation of Contracts

IT IS FURTHER ORDERED that, on or before fourteen (14) days after the date of entry of this Order, for each open HOEPA mortgage loan that is wholly or partially owned by the defendant on the date of entry of this Order, the defendant, his successors and assigns, shall:

A. Reform any note or contract that contains a "prepayment penalty" provision in violation of Section 129(c) of TILA, 15 U.S.C.  1639(c), and Section 226.32(d)(6) of Regulation Z, 12 C.F.R.  226.32(d)(6), by nullifying that provision; and
 
B. Mail or deliver to each consumer obligated in a note or contract reformed pursuant to Section IV of this Order a clear and conspicuous written notice describing each change made in the note or contract and stating that the nullified provision will not be enforced by any party, and containing no other information.

V.
Commission's Authority to Monitor Compliance

IT IS FURTHER ORDERED that the Commission is authorized to monitor the defendant's compliance with this Order by all lawful means, including but not limited to the following means:

A. The Commission is authorized, without further leave of court, to obtain discovery from any person in the manner provided by Chapter V of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 26 - 37, including the use of compulsory process pursuant to Fed. R. Civ. P. 45, for the purpose of monitoring and investigating the defendant's compliance with any provision of this Order;
 
B. The Commission is authorized to use representatives posing as consumers and suppliers to the defendant, the defendant's employees, or any other entity managed or controlled in whole or in part by the defendant, without the necessity of identification or prior notice; and
 
C. Nothing in this Order shall limit the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. 49 and 57b-1, to investigate whether the defendant has violated any provision of this Order or Section 5 of the FTC Act, 15 U.S.C. 45.

VI.
Record Keeping Requirements

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, the defendant, his successors and assigns, in connection with any business where:

(1) the defendant is the majority owner of the business or directly or indirectly manages or controls the business, and where

(2) the business is engaged in offering or extending consumer credit are hereby permanently restrained and enjoined from failing to retain for a period of five (5) years following the date of their creation, unless otherwise specified:

A. Each disclosure statement, notice or other document provided by or on behalf of the defendant to any consumer pursuant to any provision of TILA, HOEPA or Regulation Z, including but not limited to Sections 226.18, 226.23, and 226.32 of Regulation Z, 12 C.F.R.  226.18, 226.23, and 226.32; each waiver received pursuant to Sections 226.23(e) or 226.31(c)(1)(iii) of Regulation Z, 12 C.F.R.  226.23(e) or 226.31(c)(1)(iii); each worksheet or other calculation tool used to produce TILA or HOEPA disclosures, including but not limited to computer programs and software; and all other records necessary to demonstrate the defendant's compliance with TILA, HOEPA, and Regulation Z; provided, however, that nothing in Section VI.A of this Order shall be construed to supersede or limit the defendant's ongoing obligation to retain evidence of compliance with Regulation Z pursuant to Section 226.25(a) of Regulation Z, 12 C.F.R.  226.25 (a), and Section I.C of this Order.
 
B. Each disclosure statement, notice or other document provided by or on behalf of the defendant to any person pursuant to any provision of the Real Estate Settlement Procedures Act, 12 U.S.C.  2601-2617, as amended, or its implementing Regulation X, 24 C.F.R. 3500, as amended, including but not limited to all good faith estimates and settlement statements, regardless of whether they are the final versions thereof;
 
C. Each credit application, report from a consumer reporting agency, property appraisal, and other document obtained concerning any applicant or application;
 
D. Each note, contract, security agreement, mortgage, deed of trust, other document signed by the borrower or prepared in connection with the transaction (whether signed or not), and other document relating to the servicing of an account, the collection of a delinquent or slow account or foreclosure, as well as each rider, amendment or other document that modifies any of the foregoing;
 
E. Each loan register, ledger or other document that lists (chronologically, alphabetically or otherwise) loans made by the defendant, including such information as borrowers' names, loan numbers, loan types, dates of consummation, and/or loan amounts;
 
F. Each written statement concerning the defendant's policies, procedures or practices in connection with extending credit, including but not limited to compliance with TILA, HOEPA or Regulation Z;
 
G. Each printed advertisement and promotional item relating to credit, including but not limited to newspaper and magazine advertisements, pamphlets, brochures, flyers, mailers, and signs;
 
H. Each audio and video tape used to advertise or promote credit, and a printed transcript for each such audio and video tape;
 
I. In printed form, each advertisement and promotional item relating to credit posted in any Internet news group, on the World Wide Web, on any electronic bulletin board system, in any online interactive conversational space or chat room, in the classified advertising section of any online service, or in any other location accessible by modem communications, including an indication of the online location where the material was posted;
 
J. Each complaint or refund request received in connection with an extension of credit and the response thereto; and
 
K. Each signed statement secured by any defendant pursuant to Section VII of this Order.

VII.
Distribution of Order

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, the defendant, his successors and assigns, shall:

A. Provide a copy of this Order to, and obtain a signed and dated acknowledgment of receipt of same from, each officer or director, each individual serving in a management capacity, all personnel involved in responding to consumer complaints or inquiries, all sales personnel, whether designated as employees, consultants, independent contractors or otherwise, immediately upon employing or retaining any such persons, for any business where:
(1) the defendant is the majority owner of the business or directly or indirectly manages or controls the business, and where
(2) the business is engaged in offering or extending consumer credit; and
B. Maintain for a period of five (5) years after creation, and upon reasonable notice, make available to representatives of the Commission, the original signed and dated acknowledgments of the receipt of copies of this Order, as required in Section VII.A of this Order.

VIII.
Compliance Reporting by Defendant

IT IS FURTHER ORDERED that, to assist the Commission in monitoring the defendant's compliance with this Order, the defendant, his successors and assigns:

A. For a period of five (5) years from the date of entry of this Order, shall notify the Commission of the following:
1. Any changes in the defendant's residence, mailing addresses, or telephone numbers, within ten (10) days of the date of such change;
2. Any changes in the defendant's employment status (including self-employment) within ten (10) days of the date of such change. Such notice shall include the name and address of each business that the defendant is affiliated with or employed by, a statement of the nature of the business, and a statement of the defendant's duties and responsibilities in connection with the business or employment; and
3. Any proposed change in the structure of any business entity owned or controlled by the defendant, such as creation, incorporation, dissolution, assignment, sale, merger, creation, dissolution of subsidiaries, proposed filing of a bankruptcy petition, or change in the corporate name or address, or any other change that may affect compliance obligations arising out of this Order, thirty (30) days prior to the effective date of any proposed change; provided, however, that, with respect to any such proposed change about which such defendant learns less than thirty (30) days prior to the date such action is to take place, the defendant shall notify the Commission as soon as is practicable after learning of such proposed change;
B. One hundred eighty (180) days after the date of entry of this Order, shall provide a written report to the Commission, sworn to under penalty of perjury, setting forth in detail the manner and form in which the defendant has complied and is complying with this Order. This report shall include but not be limited to:
1. The defendant's then-current residence address, mailing addresses, and telephone numbers;
2. The defendant's then-current employment, business addresses and telephone numbers, a description of the business activities of each employer, and the defendant's title and responsibilities for each employer;
3. A copy of each acknowledgment of receipt of this Order obtained by the defendant pursuant to Section VII of this Order; and
4. A statement describing the manner in which the defendant has complied and is complying with the provisions of Sections I through VII of this Order;
C. Upon written request by a representative of the Commission, shall submit additional written reports (under oath, if requested) and produce documents on fifteen (15) days' notice with respect to any conduct subject to this Order;
 
D. For the purposes of Section VIII of this Order, "employment" includes the performance of services as an employee, consultant, or independent contractor; and "employer" includes any individual or entity for whom any defendant performs services as an employee, consultant, broker, or independent contractor; and
 
E. For purposes of the compliance reporting required by Section VIII of this Order, the Commission is authorized to communicate directly with the defendant.

IX.
Access to Business Premises

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Order, for the purpose of further determining compliance with this Order, the defendant, his successors and assigns shall permit representatives of the Commission, within three (3) business days of receipt of written notice from the Commission:

A. Access during normal business hours to any office or facility storing documents of any business where:
(1) the defendant is the majority owner of the business or directly or indirectly manages or controls the business, and where
(2) the business is engaged in offering or extending consumer credit.

In providing such access, the defendant shall permit representatives of the Commission to inspect and copy all documents relevant to any matter contained in this Order, and shall permit Commission representatives to remove such documents for a period not to exceed five (5) business days so that the documents may be inspected, inventoried, and copied; and

B. To interview the officers, directors, and employees, including all personnel involved in responding to consumer complaints or inquiries, and all sales personnel, whether designated as employees, consultants, independent contractors or otherwise, of any business to which Section IX.A of this Order applies, concerning matters relating to compliance with this Order. The person interviewed may have counsel present. Provided that, upon application of the Commission and for good cause shown, the Court may enter an ex parte order granting immediate access to the defendant's business premises for the purposes of inspecting and copying all documents relevant to any matter contained in this Order.

X.
Mailing of Notices

IT IS FURTHER ORDERED that all notices and reports required by this Order shall be made in writing and sent by first-class United States mail to Regional Director, Federal Trade Commission, 10877 Wilshire Blvd., Ste. 700, Los Angeles, California 90024.

XI.
Continuing Jurisdiction of Court

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes, including construction, modification, and enforcement of this Order.

XII.
Acknowledgment of Receipt of Order by Defendant

IT IS FURTHER ORDERED that, within five (5) business days after receipt by the defendant of this Order as entered by the Court, the defendant shall submit to the Commission a truthful sworn statement, in the form shown in Attachment A to this Order, that shall acknowledge receipt of this Order.

XIII.
Costs and Attorney Fees

IT IS FURTHER ORDERED that each party shall bear its own costs and attorney fees incurred in connection with this action.

XIV.
Entry by Clerk

There being no just reason for delay, the Clerk of the Court is hereby directed to enter this Order.

The parties hereby stipulate and agree to the terms and conditions set forth above and consent to entry of this Consent Judgment and Order, which shall constitute a final judgment in this action.

SIGNED AND STIPULATED BY: FEDERAL TRADE COMMISSION:

Date: _______________, 199_ _______________________________ Linda M. Stock
Attorney for Plaintiff
Federal Trade Commission

Date: _______________, 199_ ________________________________
Ann Stahl Guler
Investigator

DEFENDANT:
Date: _______________, 199_ _______________________________
Barry Cooper, an individual, doing business as Barry Cooper Properties

Approved as to form:
Date: ______________, 199_ ________________________________
Dennis H. Doss
Doss & Page
4695 MacArthur Ct., Ste. 590
Newport Beach, California 92660
Attorney for Defendant

IT IS SO ORDERED.
Date: _______________, 199_ ________________________________
United States District Judge


DEBRA A. VALENTINE
General Counsel

LINDA M. STOCK (Bar No. 143774)
Federal Trade Commission
10877 Wilshire Blvd., Ste. 700
Los Angeles, California 90024
Telephone: (310) 824-4343 or 824-4316
Fax: (310) 824-4380
Attorneys for Plaintiff

FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
BARRY COOPER, an individual,
doing business as Barry Cooper Properties,
Defendant.

Civil No.
DECLARATION OF BARRY COOPER RE: FINANCIAL STATEMENTS

Pursuant to 28 U.S.C.  1746, Barry Cooper declares as follows:

1. My name is Barry Cooper. My current residence address is _____________________________________. I am over the age of eighteen. I have personal knowledge of the facts set forth in this Declaration.

2. I am a defendant in FTC v. Barry Cooper, Civil No. _________________ (U.S. District Court, Central District of California).

3. The information contained in the Financial Statements of Barry Cooper, an individual, and Barry Cooper Properties, executed by me on ________________, 199_, and provided to the Federal Trade Commission, were true, accurate, and complete on the date they were executed.

I declare under penalty of perjury that the foregoing is true and correct. Executed on ________________, 199_, at ___________, California.
_________________________
Barry Cooper


DEBRA A. VALENTINE
General Counsel

LINDA M. STOCK (Bar No. 143774)
Federal Trade Commission
10877 Wilshire Blvd., Ste. 700
Los Angeles, California 90024
Telephone: (310) 824-4343 or 824-4316
Fax: (310) 824-4380
Attorneys for Plaintiff

FEDERAL TRADE COMMISSION
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

FEDERAL TRADE COMMISSION,
Plaintiff,
v.
BARRY COOPER, an individual,
doing business as Barry Cooper Properties,
Defendant.

Civil No.
DECLARATION OF BARRY COOPER RE: RECEIPT OF ORDER

Pursuant to 28 U.S.C.  1746, Barry Cooper declares as follows:

1. My name is Barry Cooper. My current residence address is _________________________________________. I am over the age of eighteen. I have personal knowledge of the facts set forth in this Declaration.

2. I am a defendant in FTC v. Barry Cooper, Civil No. _________________ (U.S. District Court, Central District of California).

3. On _______________, 199_, I received a copy of the Consent Judgment and Order for Permanent Injunction and Monetary Relief, which was signed by the Honorable _______________________ and entered by the Court on _______________, 199_. A true and correct copy of the Order I received is appended to this Declaration.

I declare under penalty of perjury that the foregoing is true and correct. Executed on ________________, 199_, at ____________, California.
_________________________
Barry Cooper