NEW YORK: In recent months, owners of many financial stocks have lost billions because the directors who represent them were clueless about risky mortgage operations or toxic loans held by their companies. Then last week, shareholders lost the only shot they had at firing incompetent directors when the Securities and Exchange Commission voted to prevent investors from nominating their own board candidates.

After the SECs vote, shareholders of Merrill Lynch, Bear Stearns, E*Trade Financial and others will have the same directors at the wheel who drove them off the cliff this year.

The anti-investor vote took place Wednesday. The SECs board is supposed to be nonpartisan; two commissioners represent Republicans and two represent Democrats. (The chairman is appointed by the president.) One Democratic seat is vacant.

The two Republican appointees - Paul Atkins and Kathleen Casey - voted with the Business Roundtable and the U.S. Chamber of Commerce on the issue. The lone Democratic commissioner - Annette Nazareth - opposed the move to keep owners from choosing board representatives. Sadly, she has announced plans to leave the commission.

Nazareth did not mince words last week. “I do not see a principled way to vote for the non-access release and claim to be supportive of shareholder rights in the longer term,” she said when the vote was announced.

Christopher Cox, the SEC chairman, could have supported shareholders as well, ensuring a tie vote that would have meant no action at all. That would have allowed shareholders to nominate directors through proxy proposals, as they have been able to do this year after a 2006 appellate court ruling in a case involving the American International Group and the American Federation of State, County and Municipal Employees pension fund.

The only way owners could nominate corporate directors before the AIG ruling was to mount costly proxy battles.

Politician that he is, Cox maintained that the vote was a temporary measure and that the commission would revisit the issue. The argument found few buyers.

“Chairman Cox has shown his true colors; he is not looking out for the investor,” said Richard Moore, the treasurer of North Carolina, who oversees pension funds with $87 billion invested.

Certainly the losses generated over the past few months by major financial firms indicate that something is very wrong with the boards of these companies. These directors either knew of the risks their managers were taking and blessed them, did not know of them at all or were advised of them and were unable to rein in the executives in charge.

Moore noted that these boards happily paid enormous sums to executives when mortgage desks were coining money.

“This is post-Enron, when boards should have understood that you cannot base compensation on short-term profits alone, and yet they continued to sign executive employment agreements with no claw-back provisions,” he said. “That to me is a per se breach of fiduciary duty.”

A look at boards of companies with some of the biggest write-downs shows few members with expertise in mortgage trading or even in the securities business.

Outside directors at Bear Stearns include two university presidents, a former Toys “R” Us chief executive, a former Verizon chief financial officer, private investors, a former law partner and an oil company executive.

A Bear Stearns spokesman said: “Like most boards, we have a whole range of expertise - business, finance, trading, accounting, legal, charitable - and where necessary we bring in both internal and external experts to discuss company issues.”

At E*Trade, Michael Parks, managing director of the leveraged finance unit of Trust Company of the West, must have had a grasp of the risk in its mortgage business, as may have been true for Ronald Fisher, vice chairman of Softbank Holdings.

C. Cathleen Raffaeli, a managing partner of a business development advisory firm, was also a director of American Home Mortgage Holdings; it filed for bankruptcy in August.

But alongside those directors were Krispy Kremes chief executive; a private investor; the chief executive of Flamel Technologies; the chairman of MxSecure, an Internet-based health care technology company; and a partner at a consulting firm.

An E*Trade official did not respond to requests for comment.

Frederick Rowe Jr., money manager at Greenbrier Partners in Dallas and president of Investors for Director Accountability, said the Merrill board is diverse and politically correct but lacks the experience for the complex financial world. Outside directors include Chubbs chief executive, a former U.S. ambassador to China and a co-founder of the Center for Adoption Policy.

WASHINGTON: The U.S. Treasury Department is leaning on mortgage lenders to temporarily freeze the interest rates on subprime loans for homeowners threatened with foreclosure, but the scope of any relief will depend on crucial details.

Treasury officials said Friday that they were “pleased by the progress” in persuading major lenders to freeze the comparatively low rates on hundreds of thousands of home loans that are scheduled to increase over the next 18 months.

About 2 million homeowners have subprime mortgages with teaser rates that are scheduled to jump 30 percent or more. Federal officials predict that about 500,000 of those families could lose their homes. Some analysts warn that the number could be significantly higher.

Federal officials and industry executives refused Friday to disclose specific details, which are likely to make the difference between a plan that shields hundreds of thousands of people and one that shields almost no one.

On Thursday, executives from several banks met with Henry Paulson Jr., the Treasury secretary, and with officials from the Federal Reserve and the other bank regulatory agencies. The meeting included top executives at lenders like Citigroup, JPMorgan Chase, Wells Fargo and Washington Mutual. The meeting also included the American Securitization Forum, which represents investors and Wall Street firms with a stake in mortgage-backed securities.

Paulson may provide details Monday when he speaks to a housing conference.

After the Thursday meeting, industry officials said they were close to developing a standard for deciding which homeowners would qualify for a loan modification - a temporary freeze of their teaser rates - as well as how long the freeze would last.

But as of Friday, there still appeared to be disagreements about the specifics. The chairman of the Federal Deposit Insurance Corp., Sheila Bair, has argued that lenders should make the teaser rates permanent but has also said that a five-year freeze would provide a big help, according to government officials.

Industry executives have sought a shorter period, with some recommending one year. One mortgage executive, speaking on condition of anonymity because the discussions are still fluid, described a three- to four-year freeze as the possible “sweet spot” for a compromise.

Advocates for distressed homeowners said a one-year freeze would do little to help troubled borrowers because few of them would be able to switch to a conventional mortgage with a lower rate in that time. A longer freeze would give homeowners time to build equity in their property or improve their credit ratings, both of which are crucial to obtaining lower rates. But a longer freeze would be costly to lenders and their investors.

“The tricky part is to figure out how to minimize the gaming,” said Kurt Pfotenhauer, senior vice president of the Mortgage Bankers Association. “All these people are contractually obligated to pay these loans on the terms they agreed to pay on. We need to focus on people who, without this help, wouldnt be able to stay in their homes.”

Several Democratic lawmakers praised Paulsons effort to promote a systematic approach by the industry. “I am encouraged by reports of progress,” said Representative Barney Frank of Massachusetts, chairman of the House Financial Services Committee.

Within the industry, much of the struggle is between the original lenders and loan servicers versus investment funds that ended up owning the mortgages through complex investment securities on the other. Many lenders have been willing to offer freezes, but investment funds are leery because they would shoulder most of the cost.

August 2, 2007 — Summer is the season when many of us feel ambitious and get the home-improvement bug. We take a week off and think we can put in a new kitchen by ourselves, or at least cover the bathroom with new tile. And why not? All those TV shows about decorating make it look easy!

But what happens when you start a job and realize you dont have the right tools to finish it? Or maybe youve got the tools, but dont know how to use them?

Or worse, what if you start doing something that looked easy - like breaking through a wall to join two rooms - and find something that complicates the job, like dry rot, termites, structural damage or mystery power lines?

Tasks left half-done stare you in the face and are nagging reminders of unfinished business. When you cannot complete a home-improvement project, you are less inclined to start another, so the best do-it-yourself projects are ones that match your skill level.

We all know that painting is an easy DIY job, but what about other more challenging tasks?

Heres my floor-to-ceiling guide to which jobs you can tackle on your own if you have beginner-to-intermediate skills, as well as those that should be left to the pros. After all, the best home-improvement projects, small or large, are the ones you complete!

FLOORING

Tiling a substantial expanse of floor with expensive, large tiles that require cutting with a wet saw should be left to the professionals.

However, tiling a small bathroom floor with mosaic tile, which does not require cutting, is definitely do-it-yourself-able and will give a tired bathroom a fresh new look. Wood flooring should be installed by pros, but click-in-place wood flooring - which easily covers worn vinyl, cracked tile or badly scuffed wooden floors - can be a DIY job. (It looks better than peel-and-stick vinyl tiles, too.)

ELECTRICAL

Rewiring major portions of your home is something only a licensed electrician should do. On the other hand, changing out light fixtures like sconces and overhead chandeliers (which can brighten a room in more ways than one) is a DIY project that can save you hundreds in labor costs.

But there are a few caveats. First, always make sure that the electricity is turned >PAGE 1>