Obama's approach squares in many ways with the philosophy of economists who believe that the home mortgage bubble needs to pop on its own. But it clashes with his sometimes-heated populist rhetoric on the campaign trail.
"We need to restore fairness and balance to our economy so we can put the American dream within the reach of every American," he said Tuesday in San Antonio.
Obama's comment came after he met with Teresa Molina, a local resident who almost abandoned the home she shares with her husband, Edward, after its monthly mortgage costs ballooned.
"We didn't know where we would go, but we'd go together," she told Obama.
There were nearly 150,000 foreclosures in 2007 in Texas. But because house prices are more stable in much of Texas than in Ohio and other struggling regions, the state's repossession rate was 12th in the nation. However, some areas, such as Dallas and north Texas, have been hit hard.
"If you live in one of the trouble spots, it can feel as bad as anywhere," said Jon Hockenyos, president of TXP, an Austin-based economic analysis firm.
Economists question whether Obama's $10-billion "foreclosure prevention fund" would cover the thousands of Americans who already have lost homes and the thousands more who are in danger.
"It's a drop in the bucket," Bivens said. Clinton echoed that skepticism Wednesday, saying that Obama's plan was a "half-hearted attempt. You can't have a real plan to stop foreclosures if all you're helping is the banks."
Obama and his policy aides dismiss the criticism, saying that with a slowing economy and rising healthcare costs, there is only so much funding and legal tinkering that can be done. A major focus, they say, is returning protections to the bankruptcy code that were eliminated by the 2005 bankruptcy act backed by the Bush administration and Republicans in Congress.
The 2005 vote, Rokakis said, "took power away from magistrates and judges to protect people who were declaring bankruptcy to save their houses."
Obama voted against the GOP-backed bill. But Clinton voted for an early version of that measure in 2001, then abstained when the Senate passed it into law in 2005. Her stance has complicated her efforts to portray herself as a champion for distressed homeowners.
In a Congressional Record insert before the 2005 vote, Clinton explained her earlier vote for the measure as an attempt to "hold accountable people driven into bankruptcy because of their own irresponsibility." She insisted that she would have voted against the bill in 2005 but abstained because of "unavoidable circumstances."
