PORTLAND — When they made their offer to buy a southwest Portland home last March, Catriona McCracken and Paul Thiers had every reason to think the deal would rapidly close.

The seller was delinquent on the mortgage and was motivated to sell. They had agreed upon a price.

But Earline Penson, McCracken’s real estate agent, responded with prophetic words: “Until the bank responds, we are in limbo,” the veteran Hasson Realty agent warned. “That’s why I don’t like short sales. We are at their mercy.”

Indeed. Ten months have gone by, and the two giant banks involved have shown no mercy.

McCracken and Thiers still have not closed on the house. After months of false starts, blown closing dates and repeated requests for the same information from an endlessly rotating cast of bank officials, McCracken’s offer remains stuck somewhere in the bowels of the Bank of America and JPMorgan Chase bureaucracies.

“It’s so frustrating, it seems like there are no rules out there,” McCracken said. “Is it incompetence, or is it something more than that? At this point, I just don’t know.”

Failed process

Bank of America was unable to explain how the process has failed, though bank spokeswoman Jumana Bauwens said the buyers and sellers did not always file necessary paperwork in a timely fashion.

The saga of the home on Midea Lane in southwest Portland illustrates the sad state of the residential real estate market and the struggles of the nation’s lenders to deal with the mess they helped create.

Banks are sitting on billions of dollars worth of homes, which they’ve repossessed or now control because the owners fell behind on their mortgage payments. When one of these homes is sold for less than what is owed, it’s called a short sale. Yet critics from real estate agents to Congress have complained that efficiently disposing of these properties has proven beyond the industry’s ability.

“The banks are overwhelmed,” said Mike Curtis, a short-sale specialist with Exit Realty in Portland. “I talk to some of these bank employees, they say they’ve got 500 files on their desk. How do you gear up to talk to that many people?”

The current owners of the home had moved to Southern California. Those owners, who requested they not be named, had taken out a $258,000 first mortgage from Countrywide, which was later purchased by Bank of America, and a second mortgage from JPMorgan Chase for more than $180,000.

They remodeled the home and put it on the market for about $580,000, just in time for the economy to tank and the housing market to crash. They lowered the price repeatedly in a mad scramble to avoid foreclosure.

By the time McCracken and Thiers came along, the price was down to $340,000. When McCracken and Thiers offered $330,000, the owners quickly accepted. But it was no longer a simple matter of buyer and seller reaching an accord.

The price fell low enough that it was now impossible for both banks to get repaid in full. That meant the banks had to sign off on the transaction — in other words, a short sale.

The process is hugely frustrating to McCracken, but it’s crushing the finances of the current owners. Bank of America continues to add late fees and penalties onto the owners’ loan.

That fact, of course, infuriates both the sellers and the would-be buyers, who argue that the bank’s own incompetence caused the delays that prompted the late fees and penalties.

Bank of America’s Bauwens said her company is trying to improve its procedures to make short sales more efficient. It is opening a dedicated short-sale call center, for example, to improve the bank’s ability to communicate with buyers’ and sellers’ agents.

“I completely understand that these buyers and sellers are frustrated with the process,” Bauwens said. “BofA is taking steps to try and enhance the short-sale process with new technology and processes that will speed it up.”

Chase officials did not respond to requests for comment.