What's the `worst CEO' worth?

Why did the nation’s largest pension fund take a strong stance against Citibank’s excessive CEO compensation, but then turn around and vote for Bank of America’s lesser, but still outrageous, pay plan?

The California pension fund, CalPERS, was among the 92 percent of shareholders who went along with Bank of America in an advisory vote on CEO compensation earlier this week. In Wednesday’s vote, CalPERs did vote for measures that would have required disclosure on B of A’s lobbying activities as well an independent review of the bank’s foreclosure actions.

While But Bank of America CEO Brian Moynihan faced noisy protests and pointed questions at the bank’s annual meeting in Charlotte, N.C,  both of those initiatives, like say on pay, were defeated.

In their nonbinding “say on pay” vote, Bank of America shareholders approved a $7 million 2011 pay package for Moynihan. Last month, 55 percent of Citibank’s shareholders, including CalPERS, voted against a 15 percent pay hike for their CEO, Vikram Pandit, who had been getting along on $1 a year in 2009 and 2010 while Citibank floundered.

CalPERS’ position this week is strangely at odds with its previous positions.

In the past, CalPERS has been has been particularly tough on Bank of America. In 2010, it cast an unusual vote against all of the bank’s directors, including then-CEO Ken Lewis.

Asked for comment on Wednesday’s Bank of America CalPERS vote, a spokesperson referred me to the pension board’s 79-page governing principles, specifically the provisions covering executive compensation. CalPERS declined to answer any questions about why the pension fund voted for Moynihan’s compensation fund, but against Citibank’s.

True, Moynihan’s pay is less ($7 million) than Pandit’s ($15 million), but that doesn’t make either of them acceptable, much less understandable, by anything but the tortured logic of the too big to fail, government-coddled banks.

To approve Moynihan’s pay, shareholders had to overlook mountains of evidence that the bank is on the wrong track. Back in October, the bank retreated on a scheme to soak its customers for a $5 a month fee on debit cards after President Obama blasted it. The bank, which Bloomberg News estimates received more than $1.5 billion in federal bailout aid, has repeatedly been the target of criticism for underperforming in voluntary government loan modification programs. Earlier this year, B of A was among the big banks that settled foreclosure fraud charges with the feds and states attorney general. Though it was touted as $25 billion settlement, it actually only cost the banks $5 billion. But the bank fraud it highlighted was real.

Richard Eskow of Campaign For America’s Future outlined Moynihan’s dark career trajectory, from B of A general counsel to head of its retail division to CEO, while the bank completed its disastrous $2.5 billion acquisition of slimy subprime lending king Countrywide. When Moynihan joined senior management the bank’s stock traded around $52 a share. Today it trades around $7 or $8 a share.

Tallying the eventual costs of the Countrywide acquisition, Eskow includes a massive $8.4 billion settlement with states over illegal behavior, $600 million to settle a class action suit,  $335 million to settle a discrimination suit and $50 to $55 million for its part of lawsuits against Countrywide’s former CEO.

One bank analyst, Michael Mayo, recently ranked the worst CEOs. Moynihan was at the top of the list (with Citibank’s Pandit not far behind). Mayo cited the stock slide along with the debit card fee debacle and the bank’s failure to stem its foreclosure fraud and mortgage servicing problems.

Eskow hits the nail on the head when he asks: By what standard does Moynihan still have a job, let alone a multimillion-dollar salary?

And by what standard does he merit a vote of confidence by CalPERS, which less than a month earlier had taken a strong stand against excessive pay for another failed bank executive, Pandit?

Especially after the pension fund’s chief investment fund officer, Joe Dear, vowed after the Citibank vote to get even more activist. “Excessive CEO pay is not in the interest of the shareowners and not in the interest of companies,” Dear told CNNMoney.

CalPERS has long been an advocate for improved corporate governance, but its credibility has sagged after it suffered staggering losses in the financial collapse and was caught in its own sleazy “pay to play” scandal.

CalPERS’ Bank of America’s vote leaves unanswered questions about the pension fund’s claims to increased activism. Did CalPERS single out Citibank because that was the only too-big-to-fail bank to fail its latest government stress test, as U.S News and World Report suggested?

Or could the vote have something to do with the confidential settlement last November of a lawsuit CalPERS and 15 other institutional investors filed against Bank of America? Could CalPERS officials have agreed to back off their previous hard line against the Bank of America board as part of a secret deal the public will never see?

Of course, we don’t know details – the settlement is sealed.

Was Citibank a publicity-grabbing one-off, or did the pension fund give Bank of America a bye? We’ll have to wait and see just exactly what CalPERS means by activism when it comes to challenging the pampered, powerful titans of the nation’s too big to fail banks.

For now, all we can do is paraphrase the classic film portraying of the lack of accountability of corrupt power, `Chinatown’:

“Forget it Jake, it’s Wall Street.”

 

 

 

 

Bank of America (BoA) / CalPERS / Citibank / Executive Pay / Martin Column - 05/11/2012

The President Aims For the Skyboxes

I keep telling myself I’m going to stop picking on President Obama and his administration because I don’t want to sound like a broken record.

One reader even suggested I might even be giving comfort to the Republicans.

Which, believe me, is not my intention.

But then the president and his people do something so clueless it seems to demand attention.

The latest example is the news that his campaign is contemplating moving the final extravaganza of the Democratic Party convention this summer in Charlotte, Bank of America’s corporate headquarters, to a stadium named for the country’s largest too big to fail bailed out bank.

You know, the one that wanted to charge its customers to use their debit cards, before the huge public outcry stopped them. Even the president slammed the bank’s debit card debacle. I wrote about some of the bank’s numerous other fiascoes here.

Now, the president and his campaign need to switch to the B of A stadium, according to the president’s people, because they need more luxury skyboxes for their big-money donors.

Remember when President Obama stirred the nation on election night in 2008? Speaking before a crowd of 240,000 in a public park in Chicago as well as a huge televised audience, Obama assured the country that “change had come to America.”

In 2008, the president spoke in Grant Park, which has been public space since the 1840s. Bank of America Park is an NFL stadium, home of the Carolina Panthers. They sell the naming rights for millions of dollars a year.  Local residents call it the BofA, or the Vault. Before the name belonged to Bank of America it belonged to the cell phone company Ericsson.

Imagine what a different impression the speech would have made if the president gave it surrounded by advertisements for the country’s banks.

We might have been better prepared for his economic policies if he had. The president has gone from shooting for the stars that night in Grant Park to aiming for the skyboxes.

I’m sure the president’s people will make sure that there are no actual advertisements on display while he speaks. But the symbolism, or optics, couldn’t be more powerful.

If the president and his party want to perform a public service, they should arrange to have the amount Bank of America, has contributed to each of the presidential candidates and their parties up on the scoreboard, along with the amount of bailout money, low-interest loans and loan buyouts the bank received from taxpayers.

If there was room, the party could display the names of its top donors.

If the BofA donations were displayed today, you might wonder why the president didn’t find somebody else’s stadium to give his speech from.

So far, the bank has forked over $126,500 to Romney and a measly $39,024 to the president.

But don’t cry for the president and his party. I’m sure they’ll more than make up the difference in the skyboxes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of America (BoA) / Martin Column / President Barack Obama - 01/13/2012

The Bank Occupy Couldn't Live Without

Bank of America seems determined to keep providing fuel to keep the Occupy movement going strong.

You probably recall the bank’s plan to soak its customers by charging them to use their debit cards, which was withdrawn after a torrent of bad press.

Clearly, all is not happy in Bank of Americaland, where the stock has dropped about 50 percent from 2010 levels. Despite being propped up by millions in taxpayer help as well as by Warren Buffet, the bank remains in so much trouble that in September, the bank announced plans to lay off 40,000 employees, mainly in its consumer division.

Who needs those consumers anyway?

It’s not just the bank’s lowly employees that are losing their jobs. A couple of top executives are leaving too, but the bank made sure to cushion the pain of their leaving with millions of dollars in severance and benefits.

The bank was also forced to cut back one of its most prized activities last year, spending a paltry $2.2 million on lobbying last year, down from nearly $5 million before the financial collapse.

You may not have heard about the bank’s latest effort to keep the protestors busy. They’ve decided to put the squeeze on another bunch of customers, this time small-businesses.

Several small-business owners told the Los Angeles Times is now forcing them to pay their balances in full, instead of on a monthly basis, as they used to. This change, the business owners say, could wipe them out.

Meanwhile, a firm that helps small businesses get loans calls Bank of America’s level of small-business lending “a disgrace for the largest bank in the country”.

Ami Kassar, CEO and founder of MultiFunding, says Bank of America ranks 6,128 out of 6,800 based on its small-business lending.

Three years after the financial collapse, Wall Street is still a dysfunctional mess, providing little help for Main Street. Meanwhile, our political leaders, for the most part, show no inclination to correct the mistakes that have gotten us here.

 

 

Bank of America (BoA) / Martin Column - 01/05/2012

Too Big For Justice

The too big to fail banks are still in cahoots with their regulators. That’s the message coming loud and clear from the Justice Department’s highly touted $315 million deal with Bank of America to settle racial discriminatory lending charges.

The charges stem from the actions of Countrywide, the subprime lending giant, which was bought by Bank of America after the housing collapse.

The Justice Department’s publicity offensive, labeling the deal “historic” can’t hide the stink emanating from it. Shame on the New York Times for swallowing the Justice Department’s propaganda whole.

The Justice Department concluded that Countrywide charged 200,000 minority borrowers across the country higher rates and fees than white borrowers. Countrywide also steered 10,000 minority borrowers into costlier subprime loans when similar white borrowers got traditional loans.

While $315 million sounds big in a headline, for the bankers, it’s just part of the cost of doing business, less a punishment than the latest favor in the bailout that doesn’t end.

Bank of America, which received $45 billion in bailout funds, admits no wrongdoing in the deal. Victims would get between $1,000 and $1,600 apiece under the deal.

The deal also allows Bank of America to hire its own monitor to keep track of whether the bankers live up to their Justice Department agreement.

Regulators typically whine that they just don’t have the resources to take on the banks at trial.

Regulators argue that they could never get their targets to settlements if they had to wring admissions of wrongdoing from their targets, because those admissions would be used against those targets by other litigants in future lawsuits.

Without the settlements, the crack Justice Department lawyers would be forced to, horror of horrors, try their case in court.

The reasonable response from taxpayers should be: So what? Life is hard. Do your job, which is to hold lawbreakers accountable, not make their lives easier.

The Bank of America deal is only the latest to highlight the lower standard of justice prosecutors have applied to banks. Prosecutors have become part of the government’s team whose main goal Is propping up the banks. Meanwhile, the Obama administration has yet to come up with a decent, functioning program to stem the ongoing fraud in foreclosures, or to help the substantial numbers of homeowners facing foreclosure.

According to news reports, the Justice Department has another six discriminatory lending investigations cooking. This agency would be a good target for future actions

The Bank of America deal also highlights why a strong Occupy movement is needed, outside the traditional political system: neither party, nor the president, will fight for one of the most basic notions of democracy: that lawbreakers, especially the most powerful, should not receive favorable treatment from authorities.

You can read a slightly more sympathetic rundown of the Bank of America deal here, a more skeptical take here.

 

 

Bank of America (BoA) / Martin Column / Too Big To Fail - 12/22/2011

The Real "Entitlements"

For most of us, the Wall Street housing bubble popped in 2008, with painful consequences.

But for those at the top of the nation’s too big to fail banks, the party keeps rocking, even though their institutions are still in trouble and wouldn’t even exist without taxpayers’ generosity.

Take for example that wild and crazy region known as Bank of Americaland, where dwells one of the country’s biggest and sickest banks.

It’s basically never recovered from the financial collapse, which, in Bank of America’s case included a nasty hangover induced by swallowing up the king of sleazy subprime lending, Countrywide, as well as fallen investment banking titan Merrill Lynch (labeled in 2009 by the Wall Street Journal the “$50 billion deal from Hell – no link).

Here’s how Bank of America has squandered its share of the bailout: engaging in a pattern of improper foreclosures on military families and spending millions in campaign contributions and lobbying to fight regulation of its business. Most recently, the bank imposed a new $60 annual debit card on its customers.

After all, the bank’s president, Brian Moynihan, insisted, Bank of America “has a right make a profit,” which occasionally will have to be guaranteed by U.S. taxpayers.

The company is doing so poorly that it’s going to have lay off 30,000 of its employees, some of whom will spend their waning days training their lower paid, outsourced replacements. But the company isn't doing so poorly that it didn’t manage to tuck away $11 million to the ease of parting for two of its top executives.

After all, they’re executives of a floundering bank that’s made a series of poor business decisions. So they’re “entitled” to get even more money on top of their fat salaries.

Across the political spectrum, it’s become fashionable to belittle programs like Social Security and Medicaid as “entitlements,” turning that into a dirty word. But like so much about our current, out of touch with reality political debate, it’s completely upside down.

The way the debate has been framed by our political leaders and media, they’re only “entitlements” if they’re claimed by the 99 percent of Americans who have suffered in the collapse of the middle-class and economic meltdown.

We need a crackdown on “entitlements” all right, but on the real  entitlements, the ones claimed by the top 1 percent, like those Bank of America lays claim to, scooping up millions for its executives while gouging its customers and buying our political system through lobbying and campaign contributions.

But Bank of America won’t give up these entitlements without a fight, because the bankers believe that these are the benefits they’ have a right to, along with their profits.

Bank of America (BoA) / Martin Column - 10/13/2011

Lame Ducks, Bogus Excuses

Sen. Chris Dodd brought the big banks back to Capitol Hill Tuesday to hear more about the foreclosure mess.

By the end of the day Dodd, who is retiring from the Senate after presiding over the watering down of financial reform, had a novel response: he called for an investigation.

By now nearly federal agency as well as every state attorney general is already investigating the scandal, after banks disclosed the shoddy record-keeping they were using in the foreclosure process.

How hard any of these investigations is really digging is an open question. But the more the merrier, according to Dodd. He suggested it would be a first test for the systemic risk council, which was set up under the financial reform law that bears his name, along with his House colleague Barney Frank.

The systemic risk council will be made up of members of the Obama administration, led by Treasury Secretary Tim Geithner. The administration has already brushed off the foreclosure scandal, so it’s highly unlikely the council would come back later and reverse its assessment.

Meanwhile the congressional bailout monitor, now headed by former Delaware senator Ted Kaufman, issued a stern warning about the consequences of the foreclosure scandal in its monthly report. “If document irregularities prove to be pervasive and, more importantly, throw into question ownership of not only foreclosed properties but also pooled mortgages, the result could be significant harm to the financial stability,” the monitor wrote.

Not to worry, the big banks keep reassuring us. It’s just a matter of some sloppy paperwork.

The big banks’ credibility, to put it politely, is not so hot. For example, Bank of America insists that they would be doing better modifying mortgages if not for the investors standing in the way. So the investigative journalism outfit Pro Publica took a look and found out their explanation was bogus.

Around the Web / Bank of America (BoA) / Martin Column - 11/17/2010

BIPARTISANSHIP FOR BIG BANKS

With 2 weeks to go to the midterm elections, President Obama and the Republicans have found an issue they can agree on: if they just do nothing, the foreclosure scandal will go away.

They’re betting that the use of robo-signers to process foreclosure documents without actually reading them will just amount to a pile of sloppy paperwork.

They’re betting that blaming borrowers will trump public outrage over banks holding themselves above the rule of law that states they have to prove that they own a mortgage note before they can foreclose.

You can understand the Republicans’ position; they argue that the government has no responsibility and is only capable of making any problem worse.

President Obama’s approach can’t be much of a surprise either, after leaving his financial policy in the hands of Wall Street apologists, fighting the most robust financial reform, providing a failed foreclosure relief program and not raising a finger to help when banks opposed his own proposal and not using his bully pulpit to push it. The president, despite his occasional bursts of rhetoric, has never assumed the role of tough regulator and reformer he promised on the campaign trail, preferring to act as the big bank’s collaborator-in-chief.

The president’s name may not be on the ballot November 2. But many of the Democrats who are facing the voters advocate a more robust response: a foreclosure moratorium while the very real legal issues are sorted out.

The Obama administration has taken to sending signals to the voters, hoping that might allay their worries. The feds announced the formation of that entity designed to show concern while guaranteeing that no action will be taken for the foreseeable future: a task force.

A number of banks had started their own voluntary moratoriums on some foreclosures. But two of those banks, Ally and Bank of America, have already canceled them. Meanwhile all 50 state attorney generals have announced their own investigations into the mess.

Despite the efforts of bank apologists to minimize it, the foreclosure debacle continues to shape up as a series of nasty legal battles, with a dramatic, unsettling impact on the housing market.

Opponents of a foreclosure moratorium portray it as a way of giving homes to people who haven’t been making their mortgage payments. But that’s a phony argument. A moratorium will not end up causing anybody who hasn’t been paying their mortgage to own a house they didn’t pay for.

As far as borrowers living in their houses for free, let’s be clear: that’s happening now, and it’s not the fault of any moratorium. It’s happening as a result of the banks’ own chaotic approach to foreclosure, often not wanting to take possession of property that has lost its value or not hiring enough staff to manage the properties properly.

This is the terrible irony about the banks’ fear-mongering. While they’re always predicting awful consequences to any action that limits their own power, the banks create the consequences all by themselves, or with the help of their willing collaborators.

Bank of America (BoA) / Foreclosures / Martin Column / President Barack Obama - 10/20/2010

Around the Web: Outsourcing Foreclosure `Catastrophe'

You wouldn’t think the leader of the free world would be so willing to outsource a massive foreclosure scandal to state attorneys general, judges, regulators and the big banks that created the mess in the first place.

But that’s exactly what President Obama has done, standing aside while 50 state attorneys general launch investigations, while banks implement their own voluntary moratoriums, announcing they have halted some, but not all, foreclosure proceedings.

A growing number of politicians, civil rights and consumer groups and labor unions have called for a nationwide moratorium amid allegations that banks violated foreclosure laws by using sloppy, false or fraudulent paperwork to kick people out of their homes.

But President Obama doesn’t like the idea of a foreclosure moratorium, which he fears could put the kibosh on his fragile recovery.

Where is the administration’s effort at finding some other creative solution to the mess the big banks have created across the country? What we find instead are regulators that have been ignoring clear warning signs about the banks’ troubled foreclosure crisis.

The federal response so far has been limp at best: a Justice Department inquiry (short of an investigation) and a call by a federal regulator for the banks to voluntarily verify that their foreclosure paperwork is in order.

Recent press reports call into question whether the banks have even implemented the foreclosure moratoriums they promised. Meanwhile more banks, this time Wells-Fargo, acknowledge they have also violated the laws governing foreclosure by submitting unverified documents to take people’s homes. Isn’t there an election coming up where the Democrats are fighting to maintain control of Congress, with their entire agenda at stake? Isn’t there already one party that has expertly cornered the whole do-nothing stick-your-head-in-the-sand approach to unemployment and foreclosure? Doesn’t the president know how awful it looks to most people to have the bailed-out banks getting away with yet more hanky-panky?

You would think the president would want to appear more engaged in this issue that’s so close to the heart of our on-going economic troubles.

His treasury secretary fears “unintended consequences". Apparently the administration would prefer the banks continue to foreclose on people using phony documents. While Wall Street predicts a catastrophe if a moratorium is implemented. If the big bankers want to know who created a catastrophe that will cost them billions, they only need to look in the mirror.

Bank of America (BoA) / Foreclosures / Martin Column / Outrage / President Barack Obama - 10/15/2010

Don't Foreclose on the Rule of Law

As the foreclosure process implodes in the U.S., the big banks and their defenders are scrambling to defend the mess they’ve created, dismissing serious legal issues as mere technicalities.

I covered courts as a reporter for years and I learned something about legal technicalities.

What I learned was that whenever some lawyer started dismissing some legal rule as a technicality, they were about to try to heave some of their adversary’s fundamental rights out the window.

In the foreclosure mess, those adversaries would be the banks’ former business partners, their borrowers, the people they loaned money to.

Now the big banks are trying to dismiss the rules that govern the foreclosure process as legal technicalities.

Take for example the Florida case in which a judge ruled earlier this year that a document that was supposed to show that U.S. Bank owned the mortgage in December 2007 wasn’t created until the following year. The document filed by the bank, the judge wrote in March, “did not exist at the time of the filing of this action…was subsequently created and…fraudulently backdated, in a purposeful, intentional effort to mislead.” She dismissed the bank’s case.

The bank’s lawyer blamed carelessness. He explained: “Judges get in a whirl about technicalities because the courts are overwhelmed....The merits of the cases are the same: people aren't paying their mortgages.”

One of the other things I learned was that judges tended to use very precise wording in their rulings. If the judge in the Florida case was feeling overwhelmed, she didn’t mention it. What she did say what that somebody had fraudulently created a document.

That’s not a technicality. And it doesn’t matter if you’ve been making your mortgage payment or not. Banks are not allowed to foreclose on a home using fraudulent documents. Period.

One of the aspects of the rule of law is that it applies the same to everybody: a bank isn’t allowed to submit fraudulent documents to a court any more than a pauper is. That’s not a technicality. That’s the rule of law.

In the most recent brouhaha, a number of big banks, Ally, PNC Financial, J.P. Morgan Chase and Co and Bank of America, have acknowledged that their officials didn’t actually read key foreclosure documents before submitting them in court. Some documents appeared to have been forged; others appeared to contain false information.

A number of state attorney generals across the country have threatened legal action against the banks. Faced with a firestorm, some banks have voluntarily halted foreclosures in 23 states: the ones where judges oversee foreclosures. Only Bank of America has halted foreclosures in all 50 states.

One of the first banks to acknowledge that its own paperwork hadn’t been properly reviewed was Ally Bank, formerly known as GMAC. The latest controversy wasn’t the first time GMAC’s legal work on foreclosures came under scrutiny.

In 2006, Bloomberg News reported, another Florida judge sanctioned the company, finding that it submitted false affidavits to the court in a foreclosure case. The judge ordered GMAC to submit an explanation, certify that its policies had changed and pay the opposing party’s legal costs of more than $8,000.

As a result, GMAC’s legal department issued a statement that told employees “not to sign verifications on court pleading documents unless you have independently reviewed and checked the facts.”

The new policy, the Journal reported, was distributed in June 2006; it also stated in italics and boldface that GMAC employees should sign documents only in the presence of a notary. GMAC told the court  that the policies were “being corrected.”

Three and a half years later, a GMAC employee said in a deposition that his team of 13 people signed about 10,000 documents a month without reading them.

Deborah Rhode, a Stanford Law professor, told Bloomberg, “It’s not ‘technical’ when people attest under oath to knowledge they don’t have, and it doesn’t matter that in fact there isn’t actual error or discrepancy,” Rhode said. “Any court would take this very seriously.”

Bank of America (BoA) / Foreclosures / Martin Column - 10/10/2010

Fumbling the Foreclosure Crisis

Remember when former President Bush landed on an aircraft carrier less than 2 months after the Iraq invasion while a banner unfurled to declare, “Mission Accomplished?”

President Obama hasn’t surrounded himself with the dramatic props, but he reminds me of his predecessor when he brags about how he and his administration have reformed the recklessness and lack of accountability of a seriously out of whack financial system.

Unfortunately for all of us, the bombs going off in the middle of what’s supposed to be a budding economic recovery keep reminding us that the system is as broken as ever.

We still have a system where the big banks play by one set of rules (that favor them) while the rest of us have to live by another set of rules.

The latest proof are the big banks' foreclosure follies, now unfolding across the country after it was revealed that bank officials were improperly submitting key documents in foreclosure cases without actually reading them in what has been labeled “robo-signing.”

Among the widespread irregularities: bank officials who claim to have verified how much borrowers owe when in fact they hadn’t determined the amount, documents related to the foreclosures with signatures that appeared to be forgeries and documents that were improperly notarized.

Lawyers who challenge foreclosures say this is not just a technical problem.

Because of the way mortgages were sliced and diced in the securitization process, these lawyers have uncovered a variety of problems in the foreclosure paperwork – most importantly. the inability to determine who exactly owns the mortgage at issue in a particular foreclosure. Banks, overwhelmed by the flood of foreclosures, have made serious mistakes – including illegally foreclosing on homes. In Florida, for example, a man paid cash for his house, but then Bank of America foreclosed on it anyway.

In the wake of the latest disclosures, a number of big banks have now halted some, but not all, foreclosures while they sort the mess out. There’s no help for those in some of the worst-hit states in the foreclosure crisis, such as California, which is known as a non-judicial foreclosure state.

Basically that means that under state law, lenders can foreclose on your property without going to court. So if you want to challenge your foreclosure you have to sue. But the laws are tough and lawyers in California have had little success in getting judges to block foreclosures. Judges have been reluctant to challenge the way big banks do their business on behalf of distressed borrowers behind on their mortgage payments.

The foreclosure fiasco points out the failure of the Obama administration to come up with a robust remedy, in part because banks have resisted government interference that would force them to acknowledge how much value their real estate holdings have lost. The administration’s foreclosure program, which offers meager incentives for banks to reduce payments for borrowers who are about to lose their homes, has been a dismal failure. President Obama failed to fight for his own proposal to give bankruptcy judges the power to adjust mortgage payments, which could have encouraged judges to modify more mortgages on their own. That proposal was defeated last year in the Senate in the face of bank opposition.

So we’re left with the spectacle of the banks that made their own rules in the real estate bubble continuing to make their own rules in how to deal with the collapse, still largely unaccountable to government officials or courts.

Now would be a good time for the president to get the message: asking nicely has not worked. Pretending to solve the problem hasn’t worked. It’s time to make the big banks play by the same rules everybody else has to play by.

If the president chooses not to get the message he won’t have the Republicans to blame. He’ll have nobody to blame but himself.

Bank of America (BoA) / Foreclosures / Martin Column / President Barack Obama - 10/04/2010