North Carolina's Corrupt SBI Lab & Death Row Moratoriums (Imprisoning BLACK Men)

SBI review renews call for death penalty moratorium


Two groups called for more investigation Monday following last week's scathing report on the investigative work done by the SBI's state crime labs.

The audit revealed flawed laboratory work performed by SBI analysts in criminal cases. According to the findings, the SBI withheld evidence, which may have tainted as many as 190 cases over a 16-year time span.

Eighty of the people convicted in those cases are still in prison, four are on death row, three were executed and five died in prison.

The NAACP and the People of Faith Against the Death Penalty are just two of the organizations that participated in a joint news conference Monday in Raleigh.

The groups say the SBI review should lead to more actions by state leaders.

Backed by several death penalty opponents, NC NAACP President Reverend William Barber spoke bluntly.

He says state authorities should go beyond the SBI lab report that shows sloppy SBI lab work may have led to wrong capital crime convictions.

"We have watched several African-American men, at the last minute, be released from death row and sent out of prison doors without a dime for their time, without so much as an official apology, a collective apology, from our elected officials," Barber said Monday.

Also in attendance at Monday's news conference was Pat McCoy, the brother of murder victim Kathy McCoy. He is upset because NC Attorney General Roy Cooper announced a re-investigation of several convictions based on the lab investigation results.

"My heart goes out to victims and their families who will now have to hear that justice wasn't done, and that the case they thought was closed must be reopened," McCoy said.

He's especially worried about findings that show omission of key crime lab work during murder investigations.

McCoy says families and victims suffer as a result. "Please don't dishonor their memory by building cases based on pseudo-science, sloppy work and misconduct," he added.

FBI agents, who examined more than 15,000 cases between 1987 and 2003, found that the SBI withheld blood evidence that may have kept convicted defendants out of prison.

"The full case files of each of these cases should be reviewed by both prosecutors and appropriate defense counsel," AG Cooper said.

Barber says the findings in the report are only the beginning.

"We believe that in some ways because it's preliminary, this is only the tip of the iceberg -- he and his co-investigator audited only one of five of the SBI labs, and so there's still much more work to be done," Barber said.

Baber says he wants NC to end its death penalty policy.

"We're calling the state to reflect, to repent and then to begin a movement toward repeal and a movement toward reform," he added.

Barber and supporters of a moratorium want all six of the SBI's crime labs investigated, not only the ones that were investigated in the report.

They also want Governor Bev. Perdue to commute all death penalty sentences to life sentences while lab work for those convictions is reviewed.

Finally, the group wants does not want any additional death penalty sentences during the expanded investigation.




Questions about SBI lab free Durham man

A judge ordered the release Friday of a Durham man convicted in 1998 in the sexual assault and murder of a 2-year-old girl.

According to ABC11 archived stories, Derrick M. Allen, 31, was 19 when Durham police charged him in the death of Adesha Sikia Artis. According to the transcript of a 911 call made by Allen, he claimed the child passed out while he was getting her dressed in a home they shared off Garrett Road.

An autopsy later revealed she'd been sexually assaulted.

Allen has always maintained he was innocent, and family members said in interviews with ABC11 in 1998 that they believed someone else in the home hurt the child.

Now, an audit of SBI crime lab cases has revealed that a key piece of evidence in the case against Allen - bloody undergarments - actually tested negative for blood.

Superior Court Judge Orlando Hudson ordered Allen released without bond on Friday. A date for his new trial has not been set.





Under Fire, NC SBI Blood Analyst Suspended


Duane Deaver, a veteran SBI analyst at the center of a growing controversy on how the agency reported blood evidence, has been suspended pending further investigation.

The move came Wednesday afternoon, hours after Attorney General Roy Cooper revealed an audit of the crime lab's serology unit calling into question convictions in 230 criminal cases, involving 269 people.

Deaver performed the work in the five cases an independent auditor deemed most troubling.

Deaver's work - and the practices of the NC SBI - came under fire in February when Greg Taylor, a Wake County man, was exonerated after 17 years in prison. Deaver withheld results of more sophisticated blood tests that yielded negative results. He reported to prosecutors that Taylor's SUV gave chemical indications for the presence of blood.

Deaver testified in February that supervisors told him to report his findings that way. According to the audit released Wednesday, the practice was widespread. Eight analysts completed their reports in a similar fashion.

"This is a damning indictment of the entire serology section," said Mary Pollard, executive director of Prisoner Legal Services. Her agency will begin reviewing the cases of 80 defendants who are currently in prison. "It is absolutely horrifying."

The criminal convictions or sentences of three people who have since been executed in North Carolina, and four more cases in which the defendants are now on death row, are may be in doubt because of flawed reports.

Chris Swecker, a former FBI agent who audited serology work from 1987 to 2003 said in the report that the questionable work is the result of "poorly crafted policy; lack of objectivity; the absence of clear report writing guidance; inattention to reporting methods that left too much discretion to the individual Analyst; lack of transparency; and ineffective management and oversight..."

According to the review, the cases involved SBI lab reports that were overstated, misleading or omitted important information about negative test results that would have been favorable to the defendants.

The SBI's lab work is often powerful evidence in criminal cases, shaping decisions at the heart of a defense that include decisions about plea bargaining or how to cross examine witnesses.

The SBI has followed more updated procedures on blood analysis since 2003, and more recent work is not under scrutiny. "The tests that are examined in the bulk of this report are no longer in use," the agents wrote.

The serology unit has been under intense scrutiny since February when, in the case of Taylor, it was shown that SBI agent Duane Deaver reported to prosecutors that the fender of Taylor's SUV gave chemical indications for the presence of blood.

But according to lab notes discovered in 2009, Deaver had performed more specific tests, which registered negative results for the presence of blood. He never mentioned those results or the additional tests; at Taylor's hearing in February, Deaver testified that his superiors taught him to write his reports like that.

The new report says that Deaver gave "inaccurate" testimony before the Innocence Commission in the hearings that resulted in Taylor's exoneration when he testified that he was following policies. There were no such policies then, the report says, though it was the SBI's practice at the time to omit negative results in some cases. It became the agency's actual policy in 1997.

One of the defendants who has been executed is Desmond Keith Carter, who had confessed to a March 1992 murder. The report says Deaver in that case "confirmed the presence of blood despite a negative confirmatory test." The questionable evidence wasn't introduced at the trial, according to the report.

Preliminary, or presumptive, blood tests can give false reads; those tests often give positive results for substances such as metals, plants and animal matter. More sensitive tests are seen as confirmatory.

Swecker and Wolf examined more than 15,000 old cases involving serology work to identify the cases similar to the Taylor case.

The former agents said they could not conclude that each case has a wrongful conviction, but said each will need to be reviewed by defendants, prosecutors and, in some cases, the courts.

"This will require an in depth review of investigative case ... files that are located in the records of law enforcement departments across the state, court records, trial transcripts, laboratory files, appellate records, records of the Administrative Office of the Courts and any other relevant material," they wrote.






Ex-SBI agent Deaver's testimony could lead to reviews


Duane Deaver's work paved the path for Michael Peterson's new trial. His testimony also could force another look at the sentences of several other convicted murderers.

Judge Orlando Hudson ruled last month that the former State Bureau of Investigation agent delivered "perjured testimony" in Peterson's 2003 murder trial, where he was qualified as an expert and testified about why he believed Kathleen Peterson died from a beating. Peterson, the former novelist convicted of killing his wife, is out of prison and headed for a new trial, pending the state's appeal.

Three cases examined by The News & Observer show conduct by Deaver similar to that presented during Peterson's hearing in December: Deaver exaggerating his experience as a bloodstain pattern analyst and using methods that experts deemed unacceptable.

In one Wake County capital murder case, Deaver testified that he discarded the measurements and notes that formed the basis for his expert opinion - conduct an expert called "totally insane."

The cases, two of them involving inmates on North Carolina's death row, do not involve questions of innocence. But Deaver's testimony was important in helping convince jurors that the defendants committed first-degree murder - which requires proof that the crime was deliberate and planned - or that their crime was brutal enough to deserve the death penalty.

Lawyers for the killers likely will file challenges.

David Rudolf, Peterson's lawyer, investigated some of Deaver's work and methods in preparing for Peterson's hearing. He has written to state Attorney General Roy Cooper, asking Cooper to open an independent investigation into bloodstain pattern analysis cases worked by Deaver and the SBI agents he trained.

Rudolf noted that in 2010 Cooper suspended the work of the SBI's bloodstain pattern analysts and confirmed that there were no written policies or procedures to govern them. The SBI eventually ended its bloodstain pattern analysis.

"All of this occurred before the evidence introduced during the Peterson hearings this month, which indicate the problems with Deaver and bloodstain analysis by the SBI are far deeper than was previously known," Rudolf wrote.

Cooper responded late last week in a letter to Rudolf, saying the internal investigation into Deaver has not stopped.

"The SBI director has informed me that the SBI is continuing this investigation into Agent Deaver's other cases and blood spatter cases in general and the SBI would be glad to accept any information which you believe would be helpful to them," Cooper wrote. "In the past, I have not hesitated to utilize outside expertise when it is warranted and I will continue to monitor these matters to determine if it is necessary."

Deaver, 52, worked for the SBI for more than 20 years before being fired last January. He has a degree in zoology, and had two outside courses in bloodstain pattern analysis. He had never joined major associations of professionals who worked in that field.

Over the past two years, a barrage of damaging information has emerged about Deaver. A Wake County man, Greg Taylor, was exonerated of murder based in large part on Deaver's work in the case. Taylor's exoneration led Cooper to contract an independent review of the lab's reporting of blood test results.

That review by former senior FBI officials found more than 200 cases where official SBI lab reports did not reflect the results obtained in the lab. It singled out Deaver as the analyst in the most troubling cases.

In August 2010, as The News & Observer was about to publish a series about problems with Deaver and other SBI agents, Cooper ended the work of SBI bloodstain pattern analysts who were trained and led by Deaver.

Deaver's attorney, Philip Isley, said his client has done nothing wrong and deserves his job back. "I disagree with Judge Hudson's decision" in the Peterson case, Isley said.

Untested science

Rudolf identified at least seven capital cases where Deaver testified about bloodstains. One was George Goode, whose death sentence was commuted to life by a federal judge who in 2009 found Deaver gave false and misleading testimony in 1993.

A review of the transcripts of three murder cases shows similarities to Deaver's conduct in the Peterson case. In each of the cases, Deaver repeated his claims about his bloodstain experience - numbers discredited by an internal SBI investigation.

In 2001, Deaver testified in the Wake County death penalty case of Sharoid Wright, who was sentenced to life in prison for stabbing a friend to death.

Wright testified at trial that he was drinking malt liquor and smoking marijuana in a Raleigh park with his friend, Roshaun Floyd. They began arguing over who should accept blame for robberies they committed the day before in Orange and Chatham counties, and started fighting. Wright testified that he was losing the fight and pulled out a knife and stabbed Floyd repeatedly.

Wright said he began driving Floyd to WakeMed hospital but panicked and dumped him on the side of Interstate 40 instead.

Deaver's expert testimony contradicted Wright. Deaver testified that he found a pattern of six droplets on the inside roof of a car, above the driver's seat. Deaver said he was able to measure the droplets and identify the precise "point of origin" of the spatter, where the weapon came into contact with the blood: "four inches forward of the back of the door, three inches inside of the automobile, and two and a half inches down from the top of automobile."

That led Deaver to conclude that at least two blows were struck in the driver's seat. That indicated Floyd was stabbed in his car, contradicting Wright's account of a fight in the park and supporting a verdict of first-degree murder.

The concept of "point of origin" has long been unacceptable in bloodstain pattern analysis, said national expert Tom Bevel, who testified at Peterson's hearing. There is no way to look at bloodstains and arrive at a precise point in space, he said. The accepted term is an area in space - for example, a sphere-shaped area with a diameter of 12 inches.

On cross-examination, Wright's lawyer, John Britt, asked Deaver for the measurements he used to calculate that precise point of origin.

Deaver didn't have the measurements and couldn't remember them.

"Our policy is that we take our notes and when our - when our report comes back, we throw our notes away, and they were destroyed."

Britt was skeptical: "You make a report and destroy the data that you use to generate the report?"

"Yes sir."

"And that's your policy?"

"Well, they were notes," Deaver said. "I mean, yeah."

SBI Director Greg McLeod backed that up last week.

"From 1999-2004, Agents were authorized to destroy handwritten notes only after they verified that their final reports accurately reflected the notes, including all exculpatory information," McLeod said in a written statement.

Stuart James, one of the country's foremost bloodstain pattern experts, said he was appalled when he read Deaver's testimony.

"It's totally insane," James said. "He's throwing away scientific data so no one can go back and replicate his work."

At trial, Wright's lawyers questioned whether Deaver could be certain that the tiny stains were indeed blood.

"Based on my experience, they're blood, and I've looked thousands and thousands and thousands of stains," Deaver said.

But Deaver acknowledged he could not be certain. He had never tested the stains.

Inflated experience

Deaver's testimony at Wright's trial caught the attention of other Wake County prosecutors, who called on him to do some last-minute work during the death-penalty phase of the trial of Fernando Garcia, who beat a Raleigh woman to death in a North Raleigh apartment complex.

"It was only after seeing you testify in State vs. Sharoid Wright days earlier that we determined that the evidence missing in our presentation could be overcome with your knowledge and your ability to educate a jury on blood spatter," prosecutor Susan Spurlin wrote later in a letter. "We thank you and credit you with the presentation at sentencing that gave us the evidence to convince a jury that Fernando Garcia is not worthy of another chance in society."

Garcia did not deny killing Juliann Bolt, a stranger who was exercising in the apartment clubhouse. Garcia told police he forced her at gunpoint into a bathroom and tried to rape her. When she fought back, kicking him, Garcia told police that he lost control.

He beat her so badly that first responders thought she had been shot.

Deaver testified in the sentencing phase, when the jury chose to sentence Garcia to death instead of life in prison. After inflating his credentials and being qualified as an expert, Deaver testified that the blood stains showed the attack was sustained and that Bolt was conscious through much of it.

Superior Court Judge Howard Manning, who presided at the trial, said he thought Deaver's testimony in the Garcia case was probably not that important to the jury, given the viciousness of the assault.

Wake County District Attorney Colon Willoughby said it was unlikely that he would reinvestigate the Wright or Garcia cases unless a defense attorney files a challenge.

'It is like Voodoo'

Deaver also testified at the 1996 trial of Angel Guevara, who was sentenced to death for the 1995 killing of Paul West, a Johnston County sheriff's deputy.

Thomas Manning, Guevara's defense attorney, objected to Deaver testifying as an expert, calling him a "purported expert" with a "purported opinion" whose scientific conclusions were based on obscure and vague foundations. "It is like voodoo," Manning said. His objections were overruled.

Guevara testified that he shot West and beat him with a rifle butt and the deputy's pistol after the deputy entered his home without a warrant. Guevara testified that the second and fatal shot occurred when he and West were struggling over the rifle.

Deaver testified again about the "points of origin" of two bloodstains. The first, 27 inches off the floor and eight inches from a wall, was consistent with a beating. The second, a fine mist low on the wall, indicated West was shot at close range while lying on his back, Deaver said.

Johnston County District Attorney Susan Doyle said the case against Guevara was overwhelming, including ballistics, hair and fiber evidence, eyewitness testimony by a second deputy and Guevara's testimony. "The testimony of SBI Agent Duane Deaver was not critical to the prosecution," Doyle said.

But SBI agent David McDougal praised Deaver's work in a 1995 letter put into Deaver's personnel file: "Duane took time last Wednesday to do a bloodstain examination which will be an important part of the evidence entered in this case as it proves one deputy was beaten while he was on his hands and knees prior to being shot execution style."


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Sources: ABC News, McClatchy Newspapers, Newsobserver, Google Maps

GOP Declares Earmark Moratorium: Stops Pet Projects!

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House Republicans Renew Voluntary Earmark Ban


Republicans in the House of Representatives on Thursday adopted a voluntary ban on pet projects known as earmarks when they take control of the chamber in January from President Barack Obama's Democrats.

The action came two days after Senate Republicans announced a voluntary ban, prompting Senate Democratic leader Harry Reid to say he would allow a vote on a binding moratorium.

Reid made the offer even though he and lawmakers in both parties have long favored earmarks to deliver a variety of projects to their home states.

Republicans have now forsworn earmarks as they eye large spending cuts in the coming year, when they will control the House and have more clout in the Democratic-led Senate after November's congressional elections.

"Earmarks have become a symbol of a Congress that has broken faith with the people," said House Republican Leader John Boehner, who is set to become the chamber's new speaker in January, replacing Democrat Nancy Pelosi.

Boehner, who has long opposed earmarks, said the House ban "shows the American people we are listening and we are dead serious about ending business as usual in Washington."

Although earmarks account for less than one half of a percent of the federal budget, they have become a symbol of wasteful spending for many grassroots "Tea Party" activists who helped Republicans win big in the November 2 elections.

Earmarks have accounted for roughly $16 billion of the $3.5 trillion federal budget in recent years. Reid and other backers say they are a way to ensure that Congress maintains some control over federal spending that otherwise would be managed by government agencies.

Democrats have sought to rein in earmarks in recent years after they factored in several corruption scandals, although they have not backed an outright ban.

An earmark ban could worsen congressional gridlock as they often serve as sweeteners to build support for the large spending bills that are needed to keep the government running, according to Thomas Stratmann, an economics professor at George Mason University.

Republicans reject such talk and have urged President Barack Obama, who favors curbing earmarks, to veto any bill that contains them.





Earmark Spending In 2011


There is a big showdown coming on Capitol Hill, not only on the Bush tax cuts, but the low hanging fruit we call earmarks; that spending members of Congress request for their pet projects often on behalf of campaign contributors.

Republicans, after an eight year addiction under President Bush, have agreed to a two year moratorium on earmarks in an effort to hold down spending.

Many Democrats say earmarks don't matter and have no intention of cutting the roughly 7,000 projects that litter the federal budget each year, projects incumbents often sell to voters as evidence of their ability to 'bring home the bacon'. They also say earmarks are merely symbolic, a convenient way for members to appear fiscally responsible while wasting money in other areas.

Here are five reasons they're wrong - earmarks do matter!


1. True, earmarks are only 1% of the federal budget, but look at it this way - that $16 billion dollars in earmarks equals the median federal income tax paid by 6.9 million Americans.

That's right, you'd have to fill the Rose Bowl in Pasadena 75 times with a capacity crowd just to pay for what Congress considers pocket change. That's the blood, sweat and taxes from almost seven million citizens to pay for programs that don't compete against other government priorities for your money.


2. Earmarks provide an unlevel political playing field.

"They protect members," says former CBO Director Douglas Holtz Eakin. "If you've got earmarks and you're safe back home, that's different than some other guy who takes a tough vote to cut some other spending. So it corrupts the budget process in a very fundamental way."


3. Earmarks encourage overspending.

"They're a gateway drug to a spending addiction. Once you have an earmark in a bill - you feel obligated to vote for it, no matter how bloated it becomes," says Rep. Jeff Flake, R-Arizona.


4. A moratorium may actually restore voters' confidence in Congress.

"Ultimately, it's a matter of trust," says budget analyst Brian Riedle of the Heritage Foundation. "Taxpayers are offended when they find their tax dollars are going to tattoo removal shops and Grateful Dead archives. They aren't going to trust Congress to make decisions on Medicare, Social Security, and anti poverty programs, if they feel that's where the savings are going to go."


5. Corruption. Lawmakers funnel millions of your tax dollars to companies that shower incumbents with campaign donations. Congress of course denies there is any trade, or so called "pay to play", but watchdogs say the evidence is obvious: big donors often receive big earmarks.

"Earmarks are bought and sold by lobbyists," says Riedle. "You are not distributing government projects by merit, but the highest campaign contributor."

Bottom line, experts say if Congress can't cut the low hanging fruit, there is no way they'll agree on cutting marginal programs or the really controversial stuff like Social Security and Medicare. Look for a big fight over the 7,000 earmarks worth $9 billion contained in Fiscal Year 2011 spending bills between now and January 1st.


Sources: Fox News, MSNBC, Pajamas Media, WCNC, Yahoo News

Obama Admin vs Fradulent Foreclosures: Vows To Prosecute Bankers

Obama White House Warns Banks Over Foreclosures

The White House warned banks Tuesday it would pursue them for any mortgage practices that violated the law, piling pressure on the financial sector after two institutions lifted their freezes on home foreclosures.

Bank of America said on Monday it was partially lifting its foreclosure suspension, and GMAC Mortgage, one of the largest servicers of U.S. residential loans, followed suit.

The moves followed two weeks of damaging accusations that financial institutions' use of shoddy paperwork caused some borrowers to be illegally evicted from their homes.

The controversy, which has drawn public outrage and sparked government probes, has raised new fears about threats to bank earnings and the health of the fragile housing market, which has been battered by falling prices and foreclosures of nearly 3 million homes since January 2007.

The White House has rejected calls for a nationwide moratorium on foreclosures, but it signaled Tuesday that even as banks lift their freezes, government investigations would proceed.

"As institutions are determining their next steps in addressing these issues, we remain committed to holding accountable any bank that has violated the law," White House spokesman Robert Gibbs said in a statement.

"In addition to strongly supporting the investigation by the state attorneys general, the administration's Federal Housing Administration and Financial Fraud Enforcement Task Force have undertaken their own regulatory and enforcement investigation into the foreclosure process."

Sources: BOFA, CNBC, CNN, Wikipedia

BOFA Foreclosures Resume; Ignores Fraudulent Docs Investigation

Largest Bank Will Resume Foreclosure Push In 23 States


Bank of America announced on Monday that it would resume home foreclosures in nearly two dozen states, despite the running controversy over how banks handled tens of thousands of cases of homeowners facing eviction.

Bank of America, the nation’s largest bank and the servicer of roughly one in five American mortgages, insisted that it had not found a single example where a foreclosure proceeding was brought in error.

The move is also likely to encourage other giant lenders, like JPMorgan Chase, to resume the foreclosure process that threatens two million homeowners.

Meanwhile, GMAC Mortgage, whose procedures helped prompt the controversy when one its executives testified that he had signed 10,000 documents in a month, is also proceeding with foreclosures.

“We announced a temporary suspension of evictions and foreclosure sales in the 23 judicial states several weeks ago so we could commence the appropriate review,” said Gina Proia, a spokeswoman for GMAC. “As cases are being reviewed and, when needed, remediated, the foreclosure process moves forward as appropriate.”

Guy Cecala of Inside Mortgage Finance, an industry publication, said: “This draws a line in the sand that the banks expect this problem will be over in relatively short order and it will be back to business as usual. If Bank of America can do it, certainly the smaller ones will follow suit.”

Bank of America plans to begin filing new paperwork for 102,000 foreclosures by Monday.

Consumer advocates and lawyers for homeowners expressed skepticism that Bank of America could complete a review of the paperwork so quickly. But the banking industry has come under increasing pressure from investors to resolve the problem.

Investors have fled bank stocks in recent days, worrying that the foreclosure halt would cost banks billions of dollars and inflict further harm on the nation’s struggling housing market. Bank of America is scheduled to report its latest quarterly results on Tuesday. Its shares have suffered more than those of other big banks, so any sign that the crisis is easing is likely to be greeted favorably by shareholders.

Reports of improper procedures at mortgage servicers, like having officials sign thousands of documents a month — so-called robo-signers — also have set off a political furor. On Wednesday, all 50 state attorneys general announced an investigation of mortgage servicing.

Bank of America said it would resume foreclosures in the 23 states where judicial approval was required after an internal review turned up no evidence that cases were filed in error.

However, Bank of America’s suspension will remain in effect in the 27 other states that do not require a judge’s approval to foreclose, as the bank’s paperwork review proceeds state by state. It was the only bank to initiate a nationwide freeze.

“We did a thorough review of the process, and we found the facts underlying the decision to foreclose have been accurate,” said Barbara J. Desoer, president of Bank of America Home Loans. “We paused while we were doing that, and now we’re moving forward.”

In the other 27 states, Ms. Desoer said, she expects foreclosures to resume within weeks.

Bank of America was careful to note that the major holders of mortgages — Fannie Mae and Freddie Mac — as well as private investors had signed off on its decision and had been consulted during the review. Of the 14 million mortgages it services — about $2.1 trillion worth — about half are owned by Fannie Mae and Freddie Mac, the giant mortgage holding companies now controlled by the Treasury.

About 30 percent are owned by institutional investors, like hedge funds, pension funds and insurance companies, while Bank of America holds 20 percent.

“We voluntarily paused our process in the 23 judicial states, not because there was evidence of problems — there was not — but because we wanted to ensure our customers they are being treated fairly,” said Dan Frahm, a bank spokesman.

Even as Bank of America and GMAC signaled their resumption of foreclosures, a Citigroup executive said the company was confident in its procedures. “The integrity of Citi’s foreclosures process is sound,” John C. Gerspach, Citigroup’s chief financial officer, said on a conference call.

In Bank of America’s case, the foreclosures are resuming in the 23 states where judicial procedure is required because the halt was initiated there first, on Oct. 1. It was extended to the other 27 states on Oct. 8.

From the beginning, Bank of America signaled that it did not expect the review to go on for an extended period. On Oct. 8, its chief executive, Brian Moynihan, promised a quick conclusion.






Countrywide’s Former Chief In Settlement Of Fraud Case



Angelo R. Mozilo, the founder and former chief executive of Countrywide Financial, once the nation’s largest mortgage lender, agreed to pay $67.5 million Friday to settle a civil fraud case brought by the Securities and Exchange Commission last year.

The settlement came just days before the case against Mr. Mozilo and two former colleagues was scheduled to go to trial before a jury in Los Angeles.

The two colleagues settled their cases Friday as well. David Sambol, the former president of Countrywide, agreed to pay $5.52 million, and Eric Sieracki, the former chief financial officer, consented to $130,000.

Under the agreement, the three men did not admit wrongdoing.

Mr. Mozilo’s agreement with the government represents a humbling moment for one of most audacious and flamboyant chief executives in the financial industry. The son of a Bronx butcher, Mr. Mozilo started Countrywide in 1969 with David Loeb, a business partner; together the men built the company into a behemoth with $11.4 billion in revenues at its peak in 2006.

But Countrywide’s foray into subprime lending and other risky loans led to its downfall, and in early 2008, hobbled by mounting losses on loans, the company was purchased by Bank of America in a fire sale. Mr. Mozilo left the company shortly thereafter.

In its complaint filed in June 2009, the S.E.C. had accused Mr. Mozilo, Mr. Sambol and Mr. Sieracki of hiding from investors the growing risks in Countrywide’s operations. The complaint also contended that Mr. Mozilo and Mr. Sambol improperly generated profits on insider stock sales even as they were alerted to the company’s widening woes.

Mr. Mozilo was not present for the court hearing.

Mr. Mozilo’s trial had been widely anticipated because it represented one of the few public prosecutions of a case against a major participant in the mortgage crisis. Still, both the defense and the prosecution faced big risks if they lost at trial, legal experts said, and this may have propelled the recent negotiations to bring about the deal. The settlement was approved by John F. Walter, the federal judge overseeing the case.



Had the S.E.C. won the case, it would have helped the agency re-establish its reputation as an investor advocate, which was badly damaged by inaction in the years leading up to the Madoff Ponzi scheme and the mortgage debacle. A loss would have been another black eye for the S.E.C.

A victory would also have been crucial for Mr. Mozilo, who would be concerned that a criminal prosecution might follow a loss in the civil case.


Sources: AP, CBS News, CNN, NY Times, Countrywide, BOFA, Youtube

Hitler's Foreclosure Meltdown Parody (Video)

Sources: MSNBC, Youtube

North Carolina Joins National Foreclosure Fraud Probe

N.C. Joins Multi-State Foreclosure Inquiry


N.C. and S.C. officials are joining a multi-state, bi-partisan investigation of foreclosure practices at the nation's mortgage loan servicers.

"Our multi-state group has begun inquiring whether or not individual mortgage servicers have improperly submitted affidavits or other documents in support of foreclosures in our states," the group said in a statement today. "The facts uncovered in our review will dictate the scope of our inquiry."

The effort is the latest backlash against allegations that mortgage lenders have mishandled paperwork needed to foreclose on homes. N.C. Attorney General Roy Cooper has already asked 14 lenders to halt foreclosures in the state until they show their practices comply with the law.

The controversy is the latest difficulty for struggling borrowers, a potentially costly problem for banks and a blow to an already fragile housing market.

According to the announcement, 49 attorneys general have joined the investigation, led by a dozen attorneys general offices, including North Carolina's. The N.C. banking commissioner's office is among the state mortgage regulators participating in the inquiry.

In South Carolina, the attorney general's office and the department of consumer affairs are participating.

"Serious errors have been identified in the foreclosure process and procedures of major mortgage servicers," said North Carolina's chief deputy commissioner of banks Mark Pearce, who is leaving for a post at the Federal Deposit Insurance Corp. "We intend to work with other states to ensure that homeowners are treated fairly and that mortgage companies follow the law."

The state banking commission regulates mortgage servicing of state-chartered banks and non-bank mortgage companies. It also runs the State Home Foreclosure Prevention Project, which helps homeowners avoid foreclosure.

Charlotte-based Bank of America Corp. last week said it's halting foreclosure sales nationwide in order to review its activities. Other lenders such as Wells Fargo & Co. and Ally Financial Inc. are reviewing pending foreclosures.






Bank of America Halts All U.S. Foreclosures


Bank of America, the nation’s largest bank by assets, is placing a moratorium on all foreclosure proceedings and sales across the United States, according CNBC and a report on The Wall Street Journal’s Web site. The postponement takes effect Saturday.

Separately, PNC Financial Services Group Inc. is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws.

An official at the Pittsburgh-based bank confirmed the PNC decision, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn't been publicly announced.

The moves come amid mounting political pressure on big U.S. banks to examine foreclosure-documentation problems. Bank of America is the first financial institution to stop all foreclosure actions amid revelations that the banking industry had used "robo-signers," people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes, the Journal said.

In a statement released Friday, Bank of America said it will stop foreclosure sales until “our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for foreclosure decisions is accurate. We continue to serve the interests of our customers, investors and communities. Providing solutions for distressed homeowners remains our primary focus.”

PNC becomes the fourth major U.S. lender to halt some foreclosures amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.







Bank Of America Gets Friday Deadline To Halt Foreclosures In N.C.

N.C. Attorney General Roy Cooper is giving Bank of America until Friday to halt foreclosure proceedings in the state amid concerns the Charlotte bank and other lenders haven't properly reviewed documents.

In a letter sent to the bank, Cooper questioned why Bank of America voluntarily suspended foreclosures in 23 states that involve a judicial process but not in its home state. North Carolina requires a "quasi-judicial" process in which clerks of court frequently review affidavits submitted by banks.

"If Bank of America has halted foreclosure proceedings in other states due to flaws in its affidavit process, we do not understand why Bank of America should routinely continue with foreclosures with the same flaws in North Carolina," Cooper's office wrote.

The attorney general wants the bank's foreclosures suspended until it shows its processes are legal. Bank of America said it's responding to officials' concerns.

"Our initial assessment findings show the factual loan information underlying our foreclosures is accurate," spokesman Dan Frahm said, adding the bank continues its "exhaustive efforts to assist our customers who have been unable to make their mortgage payments."

The statement did not address how Bank of America would respond to the Friday deadline set by Cooper.

Cooper has asked 13 other large mortgage servicers to also halt foreclosures in the state until they prove compliance. Those lenders have until Oct. 12 to respond to the attorney general's questions.

North Carolina is also seeking more information about practices at Ally Financial, which has halted foreclosure-related evictions in North Carolina and 22 other states.

In an interview, Cooper said lenders could be breaking an N.C. law requiring a good-faith effort to work out loan modifications if they're improperly handling foreclosure paperwork. One of his main concerns is that homeowners get a "fair shot" at loan modifications, he said.

The attorney general has broad powers to investigate unfair and deceptive business practices, including assessing civil penalties. Cooper said he didn't want to discuss possible penalties until he has heard back from the lenders.

"We are looking to work with the lenders to make sure they get it right," he said.

Among the lenders, Wells Fargo has said its procedures are appropriate and that it doesn't plan to halt foreclosures. BB&T and HSBC also said their processes comply with the law. Citigroup said it doesn't believe a suspension is necessary because it has no reason to believe its employees haven't been following procedures. JPMorgan and Ally have said they are reviewing affidavits and will fix any problems.

SunTrust said it's reviewing the attorney general's letter, while MetLife said it intends to cooperate. OneWest declined comment. Others didn't respond or couldn't be reached.

The attorney general's move comes after Bank of America, Ally and JPMorgan Chase stopped some foreclosure-related actions in about half of the country after concerns that employees and outside lawyers signed documents without verifying information. JPMorgan's moratorium includes North Carolina.

Attorneys general in other states and members of Congress have also called for foreclosure suspensions as well as investigations of lenders' procedures. On Wednesday, Sen. Richard Shelby, R-Ala., called on bank regulators to review the foreclosure activities at Bank of America, JPMorgan and Ally.

In some cases, in a process nicknamed "robosigning," bank employees have said they have rapidly signed documents, raising questions about whether they are properly verifying information about homes that are being foreclosed upon. In a deposition obtained by the N.C. attorney general, a Bank of America employee in Texas testified that she would sign as many as 8,000 documents in a month, often in batches.

In another case, a Wells Fargo supervisor based in Fort Mill testified to signing 50 to 150 documents per day. A Wells spokesman noted a judge reviewed the bank's procedures and dismissed the borrower's case, confirming the foreclosure as valid.

Although foreclosures are traumatic for homeowners and damaging to neighborhoods, analysts say the selling off of these homes to financially stable buyers is an important step in a much-needed recovery for the housing market. "If you freeze foreclosures, the overhang in housing gets worse," said Virginia-based banking consultant Bert Ely. "The market isn't clearing."

Cooper said he hopes lenders can work quickly through the process of verifying their practices.

"We don't want to stop foreclosures that are legitimate and need to happen," he said.

"We want to make sure that homeowners are getting a fair shot at keeping their homes and the process has been done legally."










New Foreclosure Mess Shows Need For Reform In North Carolina

For many North Carolina homeowners, losing their homes to foreclosure was devastating. It is beyond outrageous that many banks were so cavalier with the process that employees didn't even bother to read or verify the information in foreclosure documents.

It is even more dismaying to us that one or both of Charlotte's big banks may be among the culprits in this travesty of faulty work known as "robo-signing."

Bank of America has halted foreclosures while it investigates and straightens out faulty paperwork. It's delaying foreclosures in 23 states including South Carolina. Over the weekend, questions arose about Wells Fargo's foreclosure documents. Wells said it doesn't plan to delay foreclosures because it's confident its foreclosures documents are accurate.

We're not so confident. N.C. Attorney General Roy Cooper is right to ask lenders to suspend foreclosures in this state until they can show their process conforms with the law. Given how badly this state was hit with foreclosures, banks involved in lending to North Carolinians should be probing robo-signing practices.

Nationwide, Ally Financial's GMAC Mortgage unit and JPMorgan Chase have halted tens of thousands of foreclosures. Ally stopped evictions here and in 22 other states. Robo-signing is so prevalent more banks are expected to follow suit.

What are those practices? In some cases, bank employees admit they signed foreclosure papers without reading them or determining if crucial information - such as how much borrowers still owed on the property - is accurate. Sometimes documents were notarized illegally with indications that the notary did not actually witness the signing of papers.

These practices are unacceptable. Some appear to be illegal. The N.C. attorney general's office notified Ally last week that using unverified affidavits could constitute fraud. Cooper is right when he says that such practices could mean that "some N.C. homeowners may not be getting a good-faith shot at loan modifications."

This mess is exasperating. The reckless lending practices of financial institutions helped cause the foreclosure tsunami that swept over the country. That damage has been so hard to repair in part because many have been tight-fisted with money they could have loaned consumers and small businesses. Many lenders have been reluctant to modify mortgages, instead moving much too swiftly on foreclosure.

Some of that rush resulted in faulty paperwork that will be costly to fix. Courts may impose sanctions on lenders or force banks to pay borrowers' legal costs in these cases. Judges may even dismiss the foreclosures, barring lenders from refiling and awarding the home to the borrower.

These lenders deserve to be penalized if they failed to meet legal requirements before evicting defaulting borrowers from their homes. Consumers, who often also were losing their financial stability, deserved that consideration.

Belatedly, many lenders will now have to meet those requirements. Investigations by attorneys generals in several states and a probe by federal regulators are forcing them to do so. It did not have to come to this. But it is an apt reminder of why reforms and better oversight of financial institutions are so badly needed.


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Foreclosure Moratorium! Obama Opposes! More Homeless Coming!

White House Warns Against Broad Foreclosure Moratorium


The White House Tuesday rejected calls for a broad moratorium on home foreclosures, saying it feared such a step could harm the U.S. housing market and hinder a housing recovery.

"There are a series of unintended consequences to a broader moratorium," White House spokesman Robert Gibbs told reporters.

Disclosures that some big mortgage processors filed affidavits without proper scrutiny in thousands of foreclosure cases has drawn calls from some lawmakers and civil rights groups for foreclosures to be halted in all 50 states.

But it is not clear if any individual or single regulator has the power to impose a nationwide moratorium, with most mortgage regulation conducted on a state-by-state basis.

The health of the housing market is a major concern as the Obama administration tries to step up the economy's recovery from its worst downturn since the 1930s.

Gibbs said the administration is determined to "get to the bottom of" a problem of hasty foreclosures.

"We want to take the just and necessary steps to ensure that the process is being followed legally," he said. "At the same time, we don't want to see broader harm done to the housing market and to the housing recovery."



Lawmakers are acutely aware of voter angst over jobs and the sluggish economy with the Nov. 2 congressional election three weeks away, and regulators face heavy pressure to prevent a repeat of the 2007-2009 financial crisis that began when the U.S. housing bubble burst.

Temporary pauses in foreclosures have expanded among major lenders as the courts, lawmakers and state attorneys general investigate whether banks supplied shoddy paperwork to support evictions of delinquent borrowers.



But an investor group and industry experts warned Monday that a nationwide foreclosure moratorium could penalize pension funds, insurance companies and other investors and make new loans more expensive.


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Sources: BOFA, CNBC, MSNBC, Google Maps