Foreclosures Draw Eager Buyers, but Banks Drag Feet

Red tape and bureaucracy hinder efforts to buy repo'd properties

By Clay Dillow, Newser Staff

Posted Apr 13, 2009 8:00 AM CDT

(Newser) – Bargain hunters are turning to foreclosed homes for deals, but many are finding that buying repossessed properties from banks is a bureaucratic nightmare, the Washington Post reports. Though the housing market cannot stabilize until the unprecedented volume of foreclosures is sold off, banks are sluggish to act and fraught with red tape—and would-be homebuyers are giving up in frustration.

“Things go wrong, and it takes the bank a lot longer to deal with them,” one real estate agent said. Banks are overwhelmed with foreclosures: in the Washington, DC, area, there are 217 foreclosed properties for every 10,000, up from about 16 two years ago. Property liens, red tape, and bank failures create a web of snafus—as one lawyer says, "The more time that lapses between a home getting foreclosed on and the sale of the property, the more problems that can crop up."

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A for-sale sign hangs in front of a Homestead, Fla. home Tuesday, March 24, 2009. (AP Photo/J Pat Carter)

A house with a pool is advertised for under $80,000 in Stockton, Calif., Friday, March 13, 2009. (AP Photo/Marcio Jose Sanchez)

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It's unbelievable. With all we hear about all the homes out there that need to be sold, I have to call my congressman in order to purchase a house.
- Andrew Garcia, Baltimore homebuyer

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Foreclosures Draw Eager Buyers, but Banks Drag Feet