With housing finance still in disrepair and little activity in the way of newly issued, private residential mortgage securities, a panel of economists, former regulators and other mortgage industry experts are calling for national loan servicing standards that they say would promote and accelerate a market recovery.

More than 50 co-signers took this position in a letter addressed just before Christmas to Treasury secretary Timothy Geithner, Federal Reserve Board chairman Ben Bernanke and the heads of the Federal Deposit Insurance Corp, Federal Housing Finance Agency, Office of the Comptroller of the Currency and Securities and Exchange Commission. The letter asserted that “new securitization standards should be adopted now” to address “the misaligned incentives and ‘tranche warfare’ issues that have bedeviled mortgage servicing throughout this crisis.”

One of the signers is investment banker, risk management adviser and co-founder of Institutional Risk Analytics R. Christopher Whalen, who organized the effort and posted the letter on his Web site. Whalen was joined, among others, by Brookings Institution guest scholar, housing policy expert and journalist Martin Mayer;  former Federal Housing Finance Board chairman Allan Mendelowitz; prominent and often outspoken economists James Galbraith of the University of Texas; Nouriel Roubini of New York University; former Federal Reserve and FDIC official Robert Eisenbeis, now chief monetary economist of Sarasota, Florida-based Cumberland Advisors; University of Maryland Law School professor Michael Greenberger, formerly of the Commodity Futures Trading Commission and Justice Department; and affordable housing advocate Harold Simon, executive director of the National Housing Institute.

The dearth of mortgage credit, compounded by reported fraud and disarray in foreclosures, loan modifications and related processes, is “bad for investors, bad for homeowners and ultimately bad for a sustainable residential mortgage securitization market and the U.S. economy,” the letter said. Also at stake, it went on, are the health and soundness of insured financial institutions that rely on a functioning secondary mortgage market for liquidity management.

“The chaotic situation in the mortgage market today demands immediate action to ensure all parties are treated fairly and to restore the confidence needed to support a recovery in real estate markets and the entire U.S. economy,” said the letter.

It suggested such borrower- and investor-protection standards as prompt crediting and, when necessary, corrections of monthly loan payments; tying compensation structures to effective, long-term management of securitized assets; and barring commingling of homeowners’ monthly payments with servicers’ assets for any longer than two business days.