UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

__________________________________________

)

FEDERAL TRADE COMMISSION, )

)

Plaintiff, )

)

v. ) Civil No. 4:08-cv-338

)

EMC MORTGAGE CORPORATION, )

a Delaware corporation, and )

THE BEAR STEARNS COMPANIES LLC, )

a Delaware limited liability company, )

)

Defendants. )

__________________________________________)

STIPULATED FINAL JUDGMENT AND ORDER

Plaintiff, the Federal Trade Commission (“FTC” or “Commission”), filed a Complaint for

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). 

The Complaint alleges that defendants EMC Mortgage Corporation and The Bear Stearns

Companies LLC (“defendants”) have violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a);

Sections 806, 807, 808 and 809 of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C.

§§ 1692d, 1692e, 1692f and 1692g; Section 623(a)(3) of the Fair Credit Reporting Act

(“FCRA”), 15 U.S.C. § 1681s-2(a)(3); and Sections 226.18 and 226.20 of the Truth in Lending

Act’s (“TILA”) implementing Regulation Z, 12 C.F.R. §§ 226.18 and 226.20.

The parties, by and through their respective counsel, have agreed to entry of this

Stipulated Final Judgment and Order (“Order”) by this Court, without trial or adjudication of any

issue of fact or law. Notwithstanding anything to the contrary herein, the parties agree that this

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Order shall not apply to JPMorgan Chase Bank, NA or any other "Bank" as defined herein. The

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 defendants and the subject matter ofthis action.

Venue in the Eastern District ofTexas is proper.

2. The Complaint states a claim upon which relief may be granted against defendants

under Sections 5(a) and 13(b) ofthe FTC Act, 15 U.S.c. §§ 45(a) and 53(b); the FDCPA, 15

U.S.C. § 1692 et seq., as amended; the FCRA, 15 U.S.C. § 1681 et seq., as amended; and the

TILA's implementing Regulation Z, 12 C.F.R. § 226, as amended.

3. The activities ofdefendants are in or affecting commerce, as "commerce" is

defined in Section 4 ofthe FTC Act, 15 U.S.C. § 44.

4. Defendants have not admitted any ofthe allegations ofwrongdoing set forth in the

Complaint, and entry ofthis Order is not an admission of any such allegations of wrongdoing or

violation oflaw. Nonetheless, defendants stipulate and agree to entry ofthis Order in order to

settle and resolve these disputes.

5. Plaintiff and defendants waive all rights to seek judicial review or otherwise

challenge or contest the validity ofthis Order, and defendants waive any right that may arise

under the Equal Access to Justice Act, 28 U.S.C. § 2412.

6. Entry ofthis Order is in the public interest.

7. The Plaintiff and Defendants, by and through their counsel, have agreed that entry

ofthis Order resolves all matters in dispute between them arising from the facts and

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circumstances alleged in the Complaint in this action, up to the date of entry ofthis Order.

ORDER

DEFINITIONS

For purposes ofthis Order, the following definitions shall apply:

a. "Bank" shall mean a bank that is exempt from the FTC'sjurisdiction

pursuant to Section 5(a)(2) ofthe FTC Act, 15 U.S.c. § 45(a)(2). "Bank"

shall not include any person or entity controlled directly or indirectly by a

bank and that is not itself a bank, such as an operating subsidiary or

affiliate of a bank that is not itself a bank;

b. "Bear Stearns" shall mean The Bear Stearns Companies LLC, fld/b/a The

Bear Stearns Companies, Inc., a Delaware corporation, and its successors

and assigns, by whatever names they might be known, but not including

any bank;

c. "Clear and prominent" or "clearly and prominently" shall mean that

information is displayed in a manner that is readily noticeable, readable,

and understandable;

d. "Competent and reliable evidence" shall mean tests, analyses, research,

studies, or other evidence, including a data integrity program that complies

with Section Vll ofthis Order, based on the expertise ofprofessionals in

the relevant area, that has been conducted and evaluated in an objective

manner by persons qualified to do so, using procedures generally accepted

in the profession to yield accurate and reliable results;

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e. "Defendants" shall mean, collectively, EMC and Bear Steams;

f. "EMC" shall mean EMC Mortgage Corporation, a Delaware corporation,

and its successors and assigns, by whatever names they might be known,

but not including any bank;

g. "FCRA" shall mean the Fair Credit Reporting Act, 15 U.S.c. §§ 1681-

1681x, as amended;

h. "FDCPA" shall mean the Fair Debt Collection Practices Act, 15 U.S.C.

§§ 1601-1692, as amended;

1. "FTC Act" shall mean the Federal Trade Commission Act, 15 U.S.C.

§§ 41-58, as amended;

j. "Fees" shall mean all fees, charges, and penalties, including but not

limited to fees for late payments, property inspections, broker's price

opinions, appraisals, legal services, reinstatement, modification, and any

other fees or charges that a consumer is or was assessed by defendants or

any other person in connection with the servicing of any loan;

k. "Loan" shall mean a residential mortgage loan, i.e., a loan secured by a

lien on real property taken as security for the repayment ofthe loan;

1. "Loan instruments" shall mean the mortgage deed and/or promissory note

signed by the consumer to consummate his or her loan;

m. "Person" shall mean any individual, group, unincorporated association,

limited or general partnership, corporation, trust, or other business entity;

n. "Property inspection" shall mean an inspection ofthe property securing a

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loan to determine the property's physical condition and occupancy status;

o. "Servicing" shall mean receiving any payments from (or for) a consumer

pursuant to the terms of any loan, including amounts for escrow accounts,

and making the payments ofprincipal and interest and such other

payments with respect to the amounts received from (orfor) the consumer

as may be required pursuant to the terms ofthe loan. "Servicing" shall

also include any related loan servicing activity such as the administration

ofloan accounts, sending periodic billing statements to a consumer,

maintaining records ofthe status ofthe consumer's loan accounts,

providing information to and resolving disputes with the consumer

regarding loan accounts, the collection·ofloan payments, the foreclosure

ofreal property, the use of consumer reports and the furnishing of

information to consumer reporting agencies, and the collection or

imposition offees in relation to any ofthe foregoing; and

p. "TILA" shall mean the Truth in Lending Act, 15 U.S.C. §§ 1601-1666j, as

amended, and its implementing Regulation Z, 12 C.F.R. § 226, as

amended.

INJUNCTIVE RELIEF

Prohibited Business Practices

I.

IT IS THEREFORE ORDERED that defendants, and each ofthem, their officers,

employees, agents, representatives, and all other persons or entities in active concert or

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participation with them who receive actual notice ofthis Order by personal service or otherwise,

directly or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined, in connection with the servicing of any loan, from:

A. Misrepresenting, expressly or by implication, the amount of any payment or fee

due on a loan;

B. Misrepresenting, expressly or by implication, that any payment or fee due on a

loan is allowed under the loan instruments or permitted by law;

C. Misrepresenting, expressly or by implication, the amount, nature, or terms of any

fee or other condition or requirement ofany loan; and

D. Making any representation, expressly or by implication, about the amount of any

payment or fee, the date that any payment or fee is due, or any other information

regarding the terms, conditions, or status of a loan, unless, at the time ofmaking

such representation, such persons possess and rely on competent and reliable

evidence that substantiates the representation.

II.

IT IS FURTHER ORDERED that defendants, and each ofthem, their officers,

employees, agents, representatives, and all other persons or entities in active concert or

participation with them who receive actual notice ofthis Order by personal service or otherwise,

directly or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined, in connection with the servicing of any loan, from assessing and/or

collecting any fee unless it is for services actually rendered and is a) expressly authorized, and

clearly and prominently disclosed, by the loan instruments and not prohibited by law;

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b) expressly permitted by law and not prohibited by the loan instruments; or c) a reasonable fee

for a specific service requested by a consumer that is assessed and/or collected only after clear

and prominent disclosure ofthe fee is provided to the consumer and explicit consent is obtained

from the consumer to pay the fee in exchange for the service, and such fee is not otherwise

prohibited by law or the loan instruments.

III.

IT IS FURTHER ORDERED that, for five (5) years after the date of entry ofthis Order,

defendants, and each ofthem, their officers, employees, agents, representatives, and all other

persons or entities in active concert or participation with them who receive actual notice ofthis

Order by personal service or otherwise, directly or through any corporation, subsidiary, division,

or other device, are hereby permanently restrained and enjoined, in connection with the servicing

of any loan, from assessing and/or collecting fees for property inspections, provided that

defendants may impose reasonable fees for property inspections actually performed if: (I) the

consumer's loan payment has not been received within forty-five (45) calendar days ofthe due

date; and (2) the inspections are limited to the initial inspection and to additional inspections

during the period of continued delinquency not more frequent than every thirty (30) calendar

days. Provided, however, that defendants may charge fees for property inspections actually

performed ifthose inspections are otherwise required by law or regulation, or required by written

handbook requirements issued by the Department ofHousing and Urban Development ("HUD").

IV.

IT IS FURTHER ORDERED that defendants, and each ofthem, their officers,

employees, agents, representatives, and all other persons or entities in active concert or

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participation with them who receive actual notice ofthis Order by personal service or otherwise,

directly or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined, in connection with the servicing of any loan that was in default at the

time it was obtained by defendants, from:

A. Using conduct the natural consequence ofwhich is to harass, oppress, or abuse

any person, in violation of Section 806 ofthe FDCPA, 15 U.S.C. § 1692d,

including but not limited to: (1) causing a telephone to ring or engaging any

person in telephone conversation repeatedly or continuously with intent to annoy,

abuse, or harass any person at the called number, in violation of Section 806(5) of

the FDCPA, 15 U.S.C. § 1692d(5); and (2) the placement oftelephone calls

without meaningful disclosure ofthe caller's identity in violation of Section

806(6) ofthe FDCPA, 15 U.S.C. § 1692d(6);

B. Using any false, deceptive, or misleading representation or means in connection

with the collection of any debt, in violation of Section 807 ofthe FDCPA, 15

U.S.c. § I692e, including but not limited to: (1) falsely representing the character,

amount, or legal status of a debt, or any services rendered or compensation which

may be lawfully received by a debt collector for collection of a debt, in violation

of Sections 807(2)(A) and (B) ofthe FDCPA, 15 U.S.C. §§ 1692e(2)(A) and (B);

(2) communicating or threatening to communicate to any person credit

information which is known or which should be known to be false, including the

failure to communicate that a disputed debt is disputed, in violation of Section

807(8) ofthe FDCPA, 15 U.S.C. § 1692e(8); (3) using false representations or

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deceptive means to collect or attempt to collect a debt or to obtain information

concerning a consumer, in violation ofSection 807(10) ofthe FDCPA, 15 U.S.C.

§ 1692e(1 0); and (4) failing to disclose in the initial written communication with

the consumer and, in addition, ifthe initial communication with the consumer is

oral, in that initial oral communication, that the debt collector is attempting to

collect a debt and that any information obtained will be used for that purpose, in

violation ofSection 807(11) ofthe FDCPA, 15 U.S.C.

§ 1692e(11);

C. Using any unfair means to collect or attempt to collect a debt, including but not

limited to collecting amounts (including any interest, fee, charge, or expense

incidental to the principal obligation) not authorized by the agreement creating the

debt or permitted by law, in violation of Section 808(1) ofthe FDCPA, 15 U.S.C.

§ 1692f(1);

D. Failing to notify consumers oftheir right to dispute and obtain verification of their

debts and to obtain the name ofthe original creditor, either in the initial

communication with consumers by defendants, or within five days thereafter, in

violation of Section 809(a) ofthe FDCPA, 15 U.S.C. § 1692g(a); and

E. Failing to comply in any other respect with the FDCPA, as amended, or as it may

be amended in the future.

V.

IT IS FURTHER ORDERED that defendants, and each ofthem, their officers,

employees, agents, representatives, and all other persons or entities in active concert or

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participation with them who receive actual notice ofthis Order by personal service or otherwise,

directly or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined, in connection with the servicing of any loan, from:

A. Failing to -report accounts as "disputed" to consumer reporting agencies, as

required by Section 623(a)(3) ofthe FCRA, 15 U.S.C. § 1681s-2(a)(3), when

consumers dispute the completeness or accuracy of any information furnished to a

consumer reporting agency either in writing, orally, or by electronic means; and

B. Failing to comply in any other respect with the FeRA, as amended, or as it may

be amended in the future.

VI.

IT IS FURTHER ORDERED that defendants, and each ofthem, their officers,

employees, agents, representatives, and all other persons or entities in active concert or

participation with them who receive actual notice ofthis Order by personal service or otherwise,

directly or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined from:

A. Failing to make required TILA disclosures before consummating a consumer

credit transaction, including but not limited to in connection with a loan

modification or other loan workout that constitutes a refinancing under Sections

226.18 and 226.20 ofthe TILA's implementing Regulation Z, 12 C.F.R.

§§ 226.18 and 226.20; and

B. Failing to comply in any other respect with the TlLA and Regulation Z, as

amended, or as they may be amended in the future.

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Data Integrity Requirements

VII.

IT IS FURTHER ORDERED that defendants, in connection with the acquisition, transfer,

or servicing of any loan, shall, no later than ninety (90) days after the date of entry ofthis Order,

establish and implement, and thereafter maintain at EMC, a comprehensive data integrity

program that is reasonably designed to ensure the accuracy and completeness ofdata and other

information that EMC obtains about consumers' loan accounts, prior to servicing such accounts

("data integrity program"). Such data integrity program, the content and implementation of

which must be fully documented in writing, shall be appropriate to the nature, size, complexity,

and scope of defendants' activities, and shall include:

A. the designation of an employee or employees to coordinate and be accountable for

the data integrity program;

B. the regular testing or monitoring ofthe effectiveness ofthe data integrity program;

and

C. the evaluation and adjustment ofthe data integrity program in light ofthe results

ofthe testing and monitoring required by subparagraph VII.B, any material

changes to defendants' operations or business arrangements, or any other

circumstances that defendants know or have reason to know may have a material

impact on the effectiveness ofthe data integrity program.

VIII.

IT IS FURTHER ORDERED that defendants obtain an assessment and report (an

"Assessment") from a qualified, objective, independent third-party professional, using

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procedures and standards generally accepted in the profession, within one hundred and eighty

(180) days after the date of entry of the Order, and biennially thereafter for eight (8) years after

entry ofthe Order, that:

A. sets forth the specific data integrity program that defendants have implemented

and maintained during the reporting period;

B. explains how such data integrity program is appropriate to defendants' size and

complexity, and the nature and scope of defendants' activities; and

C. explains how the data integrity program meets or exceeds the protections required

by Section VII ofthis Order.

Defendants shall provide the first Assessment, as well as all: plans, reports, studies, reviews,

audits, audit trails, policies, training materials, and assessments, whether prepared by or on

behalfof defendants, relied upon to prepare such Assessment, to the Commission, within ten (10)

days after the Assessment is delivered to defendants. All subsequent biennial Assessments shall

be retained by defendants and provided to the Commission within ten (10) days ofrequest.

IX.

IT IS FURTHER ORDERED that, for eight (8) years after the date of entry ofthis Order,

defendants, and each ofthem, their officers, employees, agents, representatives, and all other

persons or entities in active concert or participation with them who receive actual notice ofthis

Order by personal service or otherwise, directly or through any corporation, subsidiary, division,

or other device, are hereby permanently restrained and enjoined, in connection with the servicing

of any loan, from initiating a foreclosure action, or assessing fees in connection with an actual or

threatened foreclosure action, until the defendants have: a) reviewed all available records

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pertaining to the consumer's loan to verify that the consumer is in material default under the

terms ofthe loan instruments; b) confirmed that defendants have not subjected the consumer to

any ofthe acts or practices prohibited by this Order, the loan instruments, or law, or ifsuch acts

or practices have occurred, that defendants have remedied them; and c) investigated any disputes

by the consumer and informed the consumer ofthe results ofthe investigation. Defendants shall

maintain records sufficient to document the steps they take to investigate and conclude each

dispute.

MONETARY RELIEF

X.

IT IS FURTHER ORDERED that:

A. Defendants, jointly and severally, shall pay the amount oftwenty-eight million

dollars ($28,000,000.00) to remedy the violations oflaw alleged by the FTC. This

amount constitutes redress paid for the benefit of consumers, and does not

constitute a civil penalty. On or before five (5) business days after the date of

entry ofthis Order, defendants shall wire transfer the sum oftwenty-eight million

dollars ($28,000,000.00) to the Commission or such agent as the Commission

may direct, pursuant to instructions provided by the Commission. All funds paid

pursuant to this Order shall be deposited into a fund administered by the

Commission or its agent to be used for equitable relief, inch:tding but not limited

to consumer redress and any attendant expenses for the administration ofthe

redress program. In the event that direct redress to consumers is wholly or

partially impracticable or funds remain after redress is completed, the

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Commission may apply any remaining funds for such other equitable relief

(including consumer information remedies) as it determines to be reasonably

related to the defendants' practices alleged in the Complaint. Any funds not used

for such equitable reliefshall be deposited as equitable disgorgement into the

United States Treasury. Defendants shaH have no right to challenge the FTC's

choice ofremedies under this Section.

B. In the event that defendants default on any obligation to make any payment set

forth in this Order, which default continues for ten (10) days beyond the due date

ofthe payment, the entire unpaid amount together with interest, computed

pursuant to 28 U.S.c. § 1961(a) from the date of default to the date ofpayment,

shall immediately become due and payable. Notwithstanding any other provision

ofthis Order, defendants agree that ifthey fail to meet any payment obligations

set forth in this Order, defendants shall pay the costs and attorneys' fees incurred

by the Commission or its agents in any attempts to collect amounts due pursuant

to this Order. For the purpose of any subsequent proceedings to enforce payments

required by this Section ofthis Order, including but not limited to, a

nondischargeability action filed in a bankruptcy proceeding, the defendants waive

any right to contest the allegations in the Commission's Complaint.

DATA

XI.

IT IS FURTHER ORDERED that to facilitate redress under Section X above, the

defendants shall provide the Commission and/or its designated agent, within thirty (30) calendar

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days after receiving a written request by the Commission or its designated agent, with all

information reasonably required to administer redress. Defendants shall provide a complete

electronically stored data set in a compatible format (as reasonably determined by the FTC and/or

its agent).

COMPLIANCE MONITORING

XII.

IT IS FURTHER ORDERED that, for the purpose ofmonitoring and investigating

compliance with any provision ofthis Order,

A. Within twenty (20) days ofreceipt ofwritten notice from a representative ofthe

Commission, defendants each shall submit additional written reports, sworn to

under penalty of perjury; produce documents for inspection and copying; appear

for deposition; and/or provide entry during normal business hours to any business

location in such defendant's possession or direct or indirect control to inspect the

business operation, provided that defendants, after attempting to resolve a dispute

without court action and for good cause shown, may file a motion with this Court

seeking an order including one or more ofthe protections set forth in Fed. R. Civ.

P.26(c);

B. In addition, the Commission is authorized to monitor compliance with this Order

by all other lawful means, including but not limited to obtaining discovery from

any person, without further leave of court, using the procedures prescribed by Fed.

R. Civ. P. 30,31,33,34,36, and 45; and

C. Defendants shall permit representatives ofthe Commission to interview any

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employer, consultant, independent contractor, representative, agent, or employee

who has agreed to such an interview, relating in any way to any conduct subject to

this Order. The person interviewed may have counsel present.

Provided, however, that nothing in this Order shall limit the Commission's lawful use of

compulsory process, pursuant to Sections 9 and 20 ofthe FTC Act, 15 U.S.c. §§ 49, 57b-l, to

obtain any documentary material, tangible things, testimony, or information relevant to unfair or

deceptive acts or practices in or affecting commerce (within the meaning of 15 U.S.C.

§ 45(a)(l)).

COMPLIANCE REPORTING

XIII.

IT IS FURTHER ORDERED that, in order that compliance with the provisions ofthis

Order may be monitored:

A. For a period offive (5) years from the date of entry ofthis Order, defendants shall

notify the Commission of any changes in defendants' corporate structure that may

affect compliance obligations arising under this Order, including but not limited to

a dissolution, assignment, sale, merger, or other action that would result in the

emergence of a successor corporation; the creation or dissolution of a subsidiary,

parent, or affiliate that engages in any acts or practices subject to this Order; the

filing of a bankruptcy petition; or a change in the corporate name or address, at

least thirty (30) days prior to such change, provided that, with respect to any

proposed change in the corporation about which the defendant learns less than

thirty (30) days prior to the date such action is to take place, defendant shall notify

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the Commission as soon as is practicable after obtaining such knowledge.

B. One hundred eighty (180) days after the date of entry ofthis Order, defendants

each shall provide a written report to the FTC, sworn to under penalty of perjury,

setting forth in detail the manner and form in which they have complied and are

complying with this Order. This report shall include, but not be limited to:

(1) Any changes required to be reported pursuant to subparagraph (A) above;

and

(2) A copy of each acknowledgment ofreceipt ofthis Order, obtained

pursuant to Section XVI.

C. For the purposes ofthis Order, defendants shall, unless otherwise directed by the

Commission's authorized representatives, mail all written notifications to the

Commission to:

Associate Director for Enforcement

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

Re: FTC v. EMC Mortgage Corporation, et ai.

RECORD KEEPING PROVISIONS

XIV.

IT IS FURTHER ORDERED that, for a period of eight (8) years from the date of entry of

this Order, defendants, and each ofthem, and their agents, employees, officers, corporations,

successors, and assigns, and those persons in active concert or participation with them who

receive actual notice ofthis Order by personal service or otherwise, are hereby permanently

restrained and enjoined, in connection with the servicing of any loan, from failing to create and

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retain, for a period ofthree (3) years after the date of preparation ofthe record, the following

records:

A. Accounting records that reflect the cost ofloans acquired and/or sold; revenues

generated from servicing fees and/or fees paid by and/or imposed on consumers;

and the disbursement ofsuch revenues;

B. Personnel records accurately reflecting: the name, address, and telephone number

of each person employed in any capacity by such business, including as an

independent contractor; that person's job title or position; the date upon which the

person commenced work; and the date and reason for the person's termination, if

applicable;

C. Customer files containing the names, addresses, telephone numbers (if available),

dollar amounts paid, and description offees or other charges imposed;

D. Complaints, disputes, and requests from consumers (whether received directly,

indirectly or through any third party) and any responses to those complaints,

disputes, or requests;

E. Copies of all training materials and policy manuals; and

F. All records and documents necessary to demonstrate full compliance with each

provision ofthis Order, including but not limited to, copies of acknowledgments

ofreceipt ofthis Order, required by Section XVI, and all reports submitted to the

FTC pursuant to Section XIII.

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DISTRIBUTION OF ORDER BY DEFENDANTS

xv.

IT IS FURTHER ORDERED that, for a period offive (5) years from the date of entry of

this Order, defendants shall deliver copies ofthe Order as directed below:

A. Defendants shall deliver a copy ofthis Order to all principals, officers, directors,

managers, employees, agents, and representatives having supervisory

responsibility with respect to the subject matter ofthis Order. For current

personnel, delivery shall be within thirty (30) days ofservice ofthis Order upon

defendants. For new personnel, delivery shall occur prior to them assuming their

responsibilities.

B. Defendants must secure a signed and dated statement acknowledging receipt of

the Order, within thirty (30) days of delivery, from all persons receiving a copy of

the Order pursuant to this Part.

ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS

XVI.

IT IS FURTHER ORDERED that each defendant, within five (5) business days ofreceipt

ofthis Order as entered by the Court, must submit to the Commission a truthful sworn statement

acknowledging receipt ofthis Order.

RETENTION OF JURISDICTION

XVII.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction ofthis matter for

purposes of construction, modification and enforcement of this Order.

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FINAL JUDGMENT AND ORDER

XVIII.

The Parties hereby consent to entry ofthe foregoing Order, which shall constitute a final

judgment and order, each Party to bear its own costs and attorneys' fees incurred in connection

with this action.

UNITED STATES DISTRICT JUDGE

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SO STIPULATED AND AGREED:

FOR DEFENDANT EMC MORTGAGE CORPORATION

FOR DEFENDANT THE BEAR STEARNS COMPANIES LLC

KEVIN J. ARQUIT, ESQ.

Simpson Thacher & Bartle

425 Lexington Avenue

New York, NY 10017

Phone: (212) 455-7680

Fax: (212) 455-2502

Email: karquit@stblaw.com

COUNSEL FOR DEFENDANTS

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FOR THE PLAINTIFF FEDERAL TRADE COMMISSION

WILLIAM BLUMENTHAL

General Counsel

~~A LucyRM is, Attorney

Stephen Shin, Attorney

Kristin Williams, Attorney

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

(202) 326-3224 (telephone)

(202) 326-3768 (facsimile)

lmorris@ftc.gov

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