Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-02905/USCOURTS-cand-5_05-cv-02905-14/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331(a) Fed. Question: Real Property

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

(SAN JOSE DIVISION) 

BRAULIO RODRIGUEZ, et al., 

Plaintiffs, 

vs. 

SUMMIT MORTGAGE REALTY, INC., 

et al., 

Defendants. 

JUAN MEDINA, et al., 

Plaintiffs, 

vs. 

ARGENT MORTGAGE COMPANY, et 

al., 

Defendants. 

Case No. C05-02904 HRL 

CONSENT DECREE BETWEEN 

PLAINTIFFS AND DEFENDANT 

R+FINANCIAL 

Case No. C05-02905 HRL 

 This action was brought by Plaintiffs JUAN MEDINA, MARIA ANTOINETTE 

GARCIA, OSCAR ALANIZ, FRANCISCO LOPEZ AND MARIA CARRILLO, 

ADALBERTO AND MARIA REYES, JOSEPH AND YOLANDA HIDALGO, CARLOS 

AND VERONICA APARICIO, LUCIO RODRIGUEZ and MARTHA FLORES, 

individually and on behalf of the general public, alleging that Defendants violated various state 

and federal laws by engaging in series of predatory and abusive lending practices. Named as 

Defendants were ARGENT MORTGAGE COMPANY, BNC MORTGAGE, INC., 

*E-FILED: 6/27/2007*

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 1 of 7
 

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HERMAN MICHAEL COVARRUBIAS, CESAR PONTE, CESAR VALVERDE, 

ESPERANZA VALVERDE, ADRIANA DUENA, SUMMIT MORTGAGE REALTY, 

INC., and R+ FINANCIAL, INC. dba AMERIMAC FIRST MORTGAGE. This Court 

consolidated this action with the above-captioned Rodriguez, et al. v. Summit, et al. action on 

May 17, 2006. 

 Plaintiffs and defendant R+ Financial (“Defendant”) have agreed that, in order to 

avoid protracted and costly litigation, this controversy should be resolved without a trial and 

therefore have consented to the entry of this Consent Decree. By entering into this Consent 

Decree, the parties make no admission of liability or wrongdoing in connection with the 

allegations and claims made in this action. Defendant agrees that upon receipt of written 

notification of the failure of any of its employees to abide by the terms of this Decree, 

Defendant will enact appropriate disciplinary action, which may include termination of the 

offending employee. 

 It is hereby ordered, adjudged and decreed that: 

A. GENERAL PROVISIONS 

 1. Defendant is permanently enjoined from pressuring or coercing potential mortgage 

consumers into loans that those consumers cannot afford. Defendant is further enjoined from 

knowingly arranging a loan that is beyond the ability of the consumer to repay per the terms of 

the applicable promissory note. Nothing contained herein shall impose upon Defendant an 

obligation to make any special inquiry into the financial status of said consumers who have 

completed a loan application with Defendant (“Applicants”). Further, Defendant is entitled to 

rely upon any representations made to it by Applicants as to said Applicant’(s) income, assets, 

debts, and related financial information required for the application process. 

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 2 of 7
 

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2. If any loan is primarily negotiated in a language other than in English, Defendant is 

to provide translations of key loan documents. Compliance with the translation requirement of 

California Civil Code Section 1632 shall satisfy the translation requirement of this paragraph. 

 3. Within 30 days of entry of this Consent Decree, Defendant, in accordance with 

federal and state fair housing laws, shall state in writing in their brokering and real estate listing 

policies that they do not discriminate based on race, color, national origin or on the basis of any 

other protected category under the fair housing laws (e.g., race, color, national origin, religion, 

physical or mental health disability, familial status, marital status, licensed daycare, sexual 

orientation, age, source of income or other arbitrary characteristic). Defendant shall distribute 

this policy in writing to every Applicant. 

 4. Within 30 days of entry of this Consent Decree, Defendant shall begin issuing 

notices to all Applicants no fewer than 3 days before the individual signs any loan document 

informing the borrower that she or he is entitled to bring his or her proposed loans documents 

to, and seek mortgage counseling from, a HUD-certified or other non-profit mortgage 

counseling agency about the proposed loan terms prior to signing any final loan documents. 

Defendant shall also 1) provide on request, information to applicants about how to make a 

complaint about a real estate brokers to the California Department of Real Estate’s 

Enforcement Section and 2) establish a link on the resources page of its website to the 

California Department of Real Estate’s Enforcement Section. 

 5. Within 30 days of entry of this Consent Decree, Defendant agrees to adopt and 

enforce a policy that incorporates the terms of the California Association of Mortgage Brokers’ 

Standards of Professional Practice. Defendant shall provide a copy of this policy to every 

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 3 of 7
 

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employee or independent contractor upon commencement of employment or contract work. 

Defendant shall provide all Applicants with a copy of this policy. 

B. TRAINING 

 1. Defendant shall ensure attendance of its principals; employees or contractors who 

have DRE licenses; loan assistants who have been employed as such for at least 30 consecutive 

days; and permanent employees involved in communicating with applicants at training 

session(s) regarding: 

a. How to ensure that mortgage consumers can afford the mortgage being sold to 

them; 

b. Consumer rights, such as disclosures and right to rescission; and 

c. Mortgage brokers’ ethical obligations, including honesty. 

The training session(s) must be conducted by a person or organization, such as the California 

Association of Mortgage Brokers, or California Mortgage Association, that is mutually 

agreeable to plaintiffs and Defendant. The training may be in the form of a presentation in 

electronic or digital or magnetic format, and may be conducted at Defendant’s office. It is 

defendants’ responsibility to ensure that the training session is conducted within 120 days of 

the entry of this Consent Decree and that new employees and/or independent contractors are 

trained within 45 days of hiring or contracting. It is further Defendant’s responsibility to 

ensure that its employees and/or independent contractors are provided with regular and timely 

updates in such training as the law changes. 

 2. Proof of attendance at the trainings required by the above paragraph may be in a 

form acceptable to the DRE, such as a continuing education certificate, and shall be submitted 

to plaintiffs’ counsel within 10 days of any training attended by Defendant’s principals, 

employees or independent contractors. Such reporting obligation will terminate two years from 

the date of entry of this Decree, after which time such information will be provided upon 

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 4 of 7
 

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written request by Plaintiff’s counsel, not more frequently than once every 180 days, within 30 

days of such request. 

C. MONETARY PAYMENT 

 1. Defendant shall make the payment to the “Attorney-Client Trust Account of the Law 

Foundation of Silicon Valley” within 30 days of the Court Order finding that the settlement 

between Plaintiff and Amerimac bars any right of contribution and/or indemnity by any nonsettling defendant or cross-defendant, including persons or entities not yet a party to this action 

(“Good Faith Settlement”). This payment is the total sum of all monetary payments to be made 

by Defendant to Plaintiffs, including restitution for Plaintiffs and attorneys’ fees and costs. 

D. MUTUAL RELEASES AND DISMISSAL 

 1. The parties shall execute mutual releases and waivers indicating that this Consent 

Decree constitutes a full and final settlement of any and all claims related to the subject matter 

of this action. The release shall be effective upon the Court’s approval of this Consent Decree 

and an Order approving the Good Faith Settlement. Such release shall not modify, limit, bar, 

dismiss, release or discharge in any respect, any rights, claims, causes of action or actions of 

any of the Plaintiffs against the non-settling Defendants, or any of their insurers. 

 2. The parties shall stipulate to a dismissal with prejudice of all claims against 

Defendant. The parties agree that the Court will retain jurisdiction to enforce the terms of the 

Consent Decree. 

E. DISPUTE RESOLUTION PROCEDURES 

 Plaintiffs and Defendant recognize that questions may arise as to whether defendants 

are fulfilling their obligations as set forth herein. In the spirit of common purpose and 

cooperation which occasioned this Consent Decree, the parties agree as follows: 

 1. If, during the term of this Consent Decree, plaintiffs believe that Defendant has 

breached its terms, plaintiffs—through their counsel—may notify Defendant of the alleged 

violation. Any such notification shall be in writing. 

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 5 of 7
 

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 2. In the event of a continuing disagreement among the parties as to the appropriate 

resolution of the complaint, the parties shall—within ninety (90) days of the complaint—attend 

a mediation with a mediator mutually agreeable to both plaintiffs and Defendant. The parties 

agree to attend the mediation and participate in good faith. The parties may be represented by 

counsel at the mediation. The parties agree that each side will bear its own costs, if any, for the 

mediation. 

 3. If the parties are unable to resolve their differences at the mediation or if Defendant 

refuses to schedule a mediation, Plaintiffs may initiate appropriate action with this Court. If a 

hearing is required, the prevailing party may apply to the Court for reasonable attorneys’ fees, 

which application shall be governed by the provisions set forth in 42 U.S.C. § 1988, 42 U.S.C. 

§ 3612, and the case law interpreting those provisions. 

F. TERM OF CONSENT DECREE 

 1. This order shall be in effect so long as Defendant, or any successor operating under 

DRE license #01135665, provides loan brokering services to retail consumers. 

 It is so ordered. 

Dated: ___________________, 2007 ____________________________________ 

 Hon. Howard Lloyd 

 United States Magistrate Judge 

AGREED: KYRA KAZANTZIS 

JAMES F. ZAHRADKA II 

PUBLIC INTEREST LAW FIRM 

KERSTIN ARUSHA 

FAIR HOUSING LAW PROJECT 

Law Foundation of Silicon Valley 

111 West St. John Street, Suite 315 

San Jose, California 95113 

__________________________________ 

Kyra Kazantzis 

Attorney for plaintiffs 

RICE & BRONITSKY 

June 27

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__________________________________ 

Paul E. Rice 

Attorneys for Defendant 

R+ Financial, Inc. dba Amerimac First Mortgage 

PETER BREWER 

JULIA WEI 

LAW OFFICES OF PETER BREWER 

__________________________________ 

Julia M. Wei 

350 Cambridge Avenue, Suite 200 

Palo Alto, California 94306 

Attorneys for Defendant 

R+ Financial, Inc. dba Amerimac First Mortgage 

Case 5:05-cv-02905-HRL Document 143 Filed 06/27/07 Page 7 of 7