For months, the AFL-CIO has been calling for an aggressive plan to deal with the credit crisis that includes a moratorium on certain mortgage foreclosures long enough to make a real difference. It’s about time that the Bush Administration is finally recognizing the need to help working Americans keep their homes, but a month-long moratorium on mortgage foreclosure is like a Band Aid when the patient really needs surgery.

We need a moratorium on certain mortgage foreclosures for at least six to 12 months. Just as important, the mortgage industry and government must create a structured program providing for the replacement of teaser rate loans with conventional 30-year mortgages at the teaser rate.

Servicers must renounce those servicing agreements that reward mortgage companies for foreclosing on homes rather than encourage refinancing or other workout strategies. And servicers must commit to publicly reporting -- company by company -- how many subprime loans they are servicing, how many have reset, how many have been restructured and how many foreclosures are occurring and where.

Finally, the federal government must reach out to borrowers to let them know how they can keep their homes. The Treasury Department has encouraged this type of outreach by private groups, but this effort should be much more extensive and should be led by the government.

But even these vital steps are only the beginning. This crisis was born of lax regulation of the mortgage and other financial markets and nurtured on our economic policy makers’ reliance on asset inflation to power economic growth in recent years. Instead of leaping back and forth from boom to crisis to bailout, it is time for a moratorium on economic policies that put corporate profits ahead of worker prosperity and reward financial gimmickry over an honest day’s work.

Contact: Caren Benjamin (202) 637-5018