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Officer’s Threat to Have Drug-Sniffing Dog Called to Scene of Traffic Stop Voids Drug Possession Conviction

On August 5th, the Virginia Court of Appeals rejected the claims of the Commonwealth that police officers had not “seized” the defendant when they told him they were going to get a drug-sniffing dog to “go over his car” unless he gave permission for them to search it. In Middlebrook v. Commonwealth, the issue before the court was whether that statement to Middlebrook, which prompted his admission he had marijuana in the car, arose from a consensual encounter or not. The trial court found that the encounter was consensual, and that the admission was voluntary.

The Court of Appeals disagreed and threw out Middlebrook’s conviction because the officers lacked any legal basis to detain him, other than their unformulated suspicion’s that he might be selling drugs. And, the court held, after the officer told him that he was going to call the dog to the scene, “no reasonable person would have felt free to leave.”

Drunk Driving News

Think the apple doen't fall far from the tree? Check out this news item from Indiana.

An Indiana State trooper stopped a 19-year man for speeding and then arrested him for drunk driving  after determining his blood alcohol content was 0.17%. Troopers contacted the man’s father, the county coroner, to retrieve the vehicle. When the father arrived, he too was arrested for Indiana DUI after registering a BAC of .10%. Father and son were both booked on charges of driving while intoxicated.

3 Tips if you get charged with Reckless Driving

Play the Odds to Survive Traveling on Richmond's I-95

The Virginia State Police (VSP) statistics for traffic accidents the past two reporting years illustrate some interesting facts about auto accidents in the Commonwealth in 2006 and 2007. Since Interstate 95 in and around Richmond becomes highly congested at times with travelers coming and going to from the far north and the the far south, to places in between, as well as local traffic to downtown Richmond, knowledge of the VSP factoids can help drivers be alert to the causes and take action themselves to avoid becoming a traffic fatality or injury statistic.

Surprisingly, for both years, drivers impaired by alcohol were involved in traffic accidents surprisingly little. Less than 3 percent of the drivers involved in auto accidents reported in each year involved were drunk.

Almost half (47%) of the accidents were merely that --- accidents --- involving no moving violations being issued to any of the drivers involved. However, 11 percent of the accidents involved one driver being cited for following too close, and over 8 percent involved drivers cited for failing to yield the right of way.

Accordingly, when traveling I-95, maintain a safe distance between your car and those in front and behind you. Be alert to cars changing lanes and yield to those entering or trying to exit their lane or the highway.

Illegal Immigrant Gets 10 Years for Killing Two With Truck While Drunk

Believe you have enough Uninsured/Underinsured Motorist  insurance on your auto policy to take care of your family if the worst happens to you, and the other driver has minimal or no liability coverage. Consider this unfortunate situation before you think, "Yes."

An illegal immigrant was sentenced December 9th to 10 years in prison for killing two people when he wrecked a truck while driving drunk in South Richmond.

After Richmond City prosecutors agreed to drop felony leaving the scene of an accident and DUI charges against the Mexican national, Carmen Alejandro Garcia-Hernandez, 30, pleaded guilty on October 9 to two counts of aggravated involuntary manslaughter in the deaths of Kathryn L. Jones, 44, and Joseph Owens, 40. The victims were standing between two parked cars outside a residence following a housewarming party last May when a truck operated by Garcia-Hernandez left the roadway and struck one parked car, crushing Jones and Owens between it and another parked car. His BAC two hours after the crash was more than twice the legal limit.

Richmond Circuit Court Judge Bradley B. Cavedo sentenced Garcia-Hernandez to 10 years on each of the manslaughter counts, with five years suspended on each. Garcia-Hernandez's attorney reported federal immigration authorities have notified Virginia officials of their intent to take Garcia-Hernandez into custody and likely deport him to Mexico once his state prison term is finished.

Congress Begins Shifting Blame on Freddie Mac & Fannie Mae Fiasco

 In 1999 (I think), the New York Times ran a story questioning the wisdom of Freddie Mac and Fannie Mae in bending to President Clinton's pressure to guarantee loans made to sub prime borrowers (i.e., those whose credit ratings and or incomes did not qualify them for conventional loans) to expand the numbers of people who could own their own homes. Though these agencies are supposedly independent of political pressure, that is a myth; especially when the President appoints those who serve as agency heads. Congress had to know about the risk when these agencies began guaranteeing these sub prime loans, but did not step in to halt the action. Now, we taxpayers are going to get stuck not only with the costs of saving the banks, but now the auto makers and the unions are standing in line with their hands out for federal money.

The following appeared in WashingtonPost.com on the date indicated. It merits your attention. It is time to take control of our own future.

By Zachary A. Goldfarb
Washington Post Staff Writer
Tuesday, December 9, 2008; 1:02 PM

Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm, hurt borrowers and generate more risky loans throughout the industry.

At Fannie Mae, top executives were told it was necessary to develop "underground" efforts to buy subprime mortgages because of competitive pressures, although there were growing risks and borrowers often didn't understand the terms of the loans, documents show.

The House Committee on Oversight and Government Reform, which has the documents, is holding a hearing now to discuss Fannie and Freddie's downfall. The companies were seized by the government three months ago after nearly collapsing in the wake of billions of dollars of losses on mortgages.

In a memo to former Freddie chief executive Richard Syron and other top executives, former Freddie chief enterprise risk officer David Andrukonis wrote that the company was buying mortgages that appear "to target borrowers who would have trouble qualifying for a mortgage if their financial position were adequately disclosed."

Andrukonis warned that these mortgages could be particularly harmful for Hispanic borrowers, and they could lead to loans being made to people who would be unlikely to pay them off. "The potential for the perception and the reality of predatory lending with this product is great," Andrukonis wrote.

The documents, which were released by the committee today, show that Fannie and Freddie, two linchpins of the nation's mortgage market, continued to push into new, risky markets despite internal debate over whether the efforts were prudent.

Fannie and Freddie declined to comment yesterday, as did Andrukonis. In testimony today before the House oversight committee, Syron acknowledged he was warned about risky loans but said that executives thought they had made the right decision, balancing profit motives, public policy goals and safety concerns.

At the same hearing, Daniel Mudd, Fannie's chief executive from 2005 to 2008, said that, if hindsight were 20/20 he would redo the way Fannie underwrote mortgage loans.

Mudd, Syron and two other former Fannie and Freddie executives were sharply criticized by lawmakers today. Rep. Darrell Issa (R-Calif.), the committee's ranking member, said they needed to take responsibility.

"All four of you still seem to be in complete denial that Fannie and Freddie are in any way responsible for this," Issa said. "Your testimony says your not accepting any blame for this at all. You're telling us that in fact that everyone was doing it."

When the government took over the mortgage finance giants, it announced it was installing new management and creating a $200 billion fund to support the companies in case they faltered further.

Fannie and Freddie's distress has its roots in the new, risky mortgages the companies bought and guaranteed in increasing numbers, largely from 2004 through 2007. These new products included home loans made to people with blemished credit histories, called subprime loans, and mortgages made without verification of income, assets or employment, often called Alt-A

As Mudd's and Syron's decisions have been called into question, they have described their push into these new areas of the mortgage business as an inevitable consequence of dueling mandates to support affordable housing and maximize profit for shareholders. And they've said that the collapse of the housing market was unforeseeable and the primary reason behind the company's fall.

But the documents show how top executives at both companies were told that the new subprime and Alt-A loans were dangerous both to the companies and to the borrowers they were charted by Congress to help.

At Fannie, chief credit officer Adolfo Marzol wrote to chief executive Mudd in March 2005 to warn that entering new areas of the mortgage market represented significant risks. The industry was pushing new types of loans, he wrote, including those that required little documentation and those that carried rates that would adjust in a few years.

"The combination of these risks may be difficult for subprime borrowers to understand," Marzol wrote.

Marzol also warned that securities backed by these loans might not be as safe as they seemed. Fannie reported them as carrying the top grade given by credit-rating agencies, AAA, but Marzol cast doubt on that. "Although we invest almost exclusively in AAA rated securities, there is concern that rating agencies may not be properly assessing the risk in these securities," he wrote.

Despite these concerns, Fannie continued to push into this new market. A business presentation in 2005 expressed concern that unless it didn't, Fannie could be relegated to a "niche" player in the industry. Mudd later reported in a presentation that Fannie moved into this market "to maintain relevance" with big customers who wanted to do more business with Fannie, including Countrywide, Lehman Brothers, IndyMac and Washington Mutual.

The documents suggest than Fannie and Freddie knew they were playing a role in shaping the market for some types of risky mortgages. An e-mail to Mudd in September 2007 from a top deputy reported that banks were modeling their subprime mortgages to what Fannie was buying.

At Freddie, risk officer Andrukonis expressed concern about a new mortgage product called stated-income, stated-asset that the company was considering buying. The loans required borrowers to state their incomes and assets, but not prove them.

In a memo to Syron and others, Andrukonis warned that in 1990 Freddie called this product "dangerous" and stopped offering it. "I'm not convinced we aren't leading the market into this product," Andrukonis wrote.

Freddie offered to buy the stated-income, stated-asset loans anyway.

Andrukonis and others expressed concern about another type of mortgage Freddie was buying, where neither income nor assets were stated on the loan application. Andrukonis said these were popular with Hispanic borrowers, but the delinquency rates of 8 to 13 percent were much higher than on conventional loans. People familiar with the matter said Freddie was being pushed by advocacy groups to come up with new loan products to offer to low-income and minority borrowers.

Andrukonis acknowledged that getting out of this business could cost $50 million annually and draw criticism. "On the other hand, what better way to highlight our sense of mission than to walk away from profitable business because it hurts the borrowers we are trying to serve," he wrote.

At times, Andrukonis grew frustrated with the response he got from Freddie leadership about his concerns as he registered worries about low-documentation loans.

In a message to colleagues, Andrukonis wrote that while he and others "make the case for sound credit, it's not the theme coming from the top of the company and inevitably people down the line will play follow the leader."

Andrukonis was joined by others expressing concerns. Don Bisenius, then a credit officer, wrote in an e-mail to Michael May, a top executive, that "the lack of verified information on a borrower's income and assets could clearly influence the risk potential in a loan and the ultimate performance of the loans."

In a separate e-mail, May wrote that he recognized the risks of the business. But he predicted "a different pattern [than] we did with no-doc lending before," suggesting there won't be big losses. He listed reasons including that Freddie had more information about borrowers' credit-worthiness than before and other tools for accessing risk.

In October 2004, May ultimately recommended continuing no-income, no-asset loans, though with some changes. Through Freddie Mac, May declined to comment. Syron signed off on continuing with the loans. Bisenius, now part of new Freddie chief executive David Moffett's inner circle, formally opposed the decision.

There is some mystery surrounding Andrukonis's ultimate role. In one document sent to Syron, he joined a group of people neither supportive of nor opposing the decision to continue no-income, no-asset loans, but registered as "neutral."

However, a person familiar with the discussions said Andrukonis and other risk officers continued to oppose the product until the very end. Freddie executives asked him to leave the company, according to people familiar with the matter, which he did in 2005.

Staff writer Amit R. Paley contributed to this report.

Lost Will Means Trouble