Individuals with substantial excess mortgage debt therefore have a strong incentive to stop paying; they can often stay in their homes for a year or more before the property is foreclosed and they are forced to move.
Rheingold blames Congress and the Obama administration, which failed to push bankruptcy reform that would make it easier to shed excess mortgage debt.
Investigators also found cases in which sticky-fingered servicers did not return excess mortgage insurance payments to the borrower within the 45 days that federal law requires.
Chandor's only obvious qualification is that his father spent forty years at Merrill Lynch, which, like Bear Stearns and Lehman Brothers, destroyed itself with an excess of mortgage-backed securities and finally, in 2008, subsided, at a bargain rate, into the arms of a wealthier firm.
The proposal is part of a sweeping blueprint to overhaul the nation's hodgepodge of financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now the worst financial calamity in decades.
And Citigroup, where Mr. Weill remained chairman until 2006, was at the center of the mortgage excesses.
The men, real estate moguls, also invested the excess proceeds from mortgages they refinanced with Madoff's brokerage operation on the belief that his returns would be greater than their mortgage payments.
The state was not spared all the excesses of the mortgage boom, said John Fleming, the general counsel of the Texas Mortgage Bankers Association, who also teaches consumer credit law at the University of Texas School of Law.
Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.
The losses that have been incurred as a result of the excesses in subprime mortgage lending will take years to work their way through the worldwide financial system, as dozens of banks act to replenish their lost capital by issuing more common stock in the public markets and trading other equity securities to sovereign wealth funds.
The head of Goldman Sachs, Lloyd Blankfein, will admit to Congress today that his bank failed to raise the alarm about excesses in the mortgage industry and got involved in "overly complex" derivatives deals that fuelled perceptions of Wall Street running out of control.
