As Washington continues to debate policy options for reducing foreclosures, banks and servicers are struggling to deal with the glut of homes they are taking over when homeowners cannot make their mortgage payments.

By some estimates, lenders now own 900,000 homes, and the Federal Deposit Insurance Corp. said "real estate owned" at insured institutions rose 21% from a quarter earlier and 134% from a year earlier, to $23 billion at Sept. 30.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.