The credit crunch and plague of home foreclosures are too large to be ignored, said representatives for a liberal think tank who today detailed plans for a new program that draws from the Depression-era Home Owner’s Loan Corp.

Laura Tyson, a senior fellow for the Washington, D.C.-based Center for American Progress, said she was “struck by the unanimity of views” during the World Economic Forum last month in Switzerland about the need for action to jump-start the U.S. and global economy and inject liquidity into the marketplace.

“The view I heard again and again: Macroeconomic policy of the standard sort is not enough. We need fiscal stimulus,” she said, noting that participants at that economic conference expressed worries about the “serious liquidity crisis under way” that has essentially frozen much of the credit market’s normal function. “Many liken the situation to a downward spiral.”

She added, “We need an … out-of-the-standard-box intervention. Our concern is if we don’t do something now we could actually end up worse off.”

Michael Barr, a senior fellow for the center, during a conference call today and in testimony last week before the U.S. Senate Committee on Banking, Housing and Urban Affairs, outlined the center’s broad proposal to mend market problems that utilize existing institutions.

Dubbed Saving America’s Family Equity, or SAFE, the plan would accelerate the re-pricing of existing mortgage pools at a discount, possibly through an auction or similar platform administered by the Treasury Department.

Participants in the program — which would include including Federal Housing Administration lenders, Ginnie Mae issuers and the government-sponsored entities Fannie Mae and Freddie Mac — would be the ultimate purchasers of these pools of mortgages, and would sort these loans into different categories based on those that must go into foreclosure, those that should be refinanced, and those that can continue on current terms.

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