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The first thing you must know about foreclosures is the reason they were not able to sell the property on the open market instead of going into foreclosure.  The reason is 99% of the time, "I owe more than it is worth".  So this being the case why do people think buying a foreclosure is such a good deal?  They simple have not thought through the first thing you about foreclosures.

Consider this, after a person looses there house to the bank the bank now holds a property that they cannot sell without taking a loss.  In the company asset policy they must have a rule that says "Accept no less than 2% under the balance of the company's actual loss".  Now this rule works for the company only when people are willing to pay this price.  In our current market lenders are countering good offers and running away willing buyer.  Under these conditions the banks will soon lower their price or loose control of their assets to another company.

What happens when a bank owns a bunch of vacant properties?