Published: Sep 01, 2010 4:48 PM EDT
Updated: Sep 01, 2010 1:48 PM EDT

WASHINGTON (AP) - Major banks are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors.

The Obama administration says local officials could benefit from acquiring these properties and using the land for redevelopment projects. Congress has provided $7 billion in money to buy the homes.

These groups have been outbid by speculators who are snapping up foreclosures.

The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators.