When the latest housing legislation was signed, states like California breathed a sigh of relief. Finally, there will be a federal foreclosure rescue program that will help address the issues brought about by the enduring foreclosure rescue. The said program included a $4 billion budget that will be given to states hardest hit by the mortgage mess and the money will be used to purchase foreclosure homes, fix them and then sell them once again at an affordable price.

Although the idea of providing state governments with a means of tackling their foreclosure problem, many experts believe that the program is only good on paper.

For starters, it will be bad for sellers who are trying to get rid of their large inventories of foreclosed properties. With the tight competition in the market, having the county governments as competitor will make it more difficult for these sellers.

Right now, the supply of affordable housing in several California communities is already sufficient. And with the government adding to the inventory, the housing market may have trouble stabilizing.

Another reason that experts think that the purchase of foreclosed homes by the local governments may be a bad idea is that these governments are ill-equipped with the necessary human resources to rehabilitate and sell these abandoned homes.

Critics of the housing legislation have pointed out these reasons as well, citing a need for a more in depth consultation. President Bush was also opposed to this particular provision but later agreed after the Congress has included a $25 billion budget for the rehabilitation of Freddie Mac and Fannie Mae.

The clamor for the purchase of these foreclosure homes by the government began because neighborhoods have been growing concerned about the rising incidence of vandalism and burglary. But because the local governments do not have the funds to care for and maintain these abandoned homes, there was very little that they could do.

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