Hundreds of foreclosed and abandoned houses may soon be demolished by Bank of America Corp. as it and other lenders seek ways to deal with homes they can’t sell, Bloomberg reported.

Disposing of repossessed homes is a big challenge for U.S. banks, which face the prospect of those properties flooding the market, driving off buyers and putting downward pressure on housing values.

Starting with a donation of 100 foreclosed houses in the Cleveland area, Bank of America has similar plans to demolish blighted properties in Detroit and Chicago. Wells Fargo & Co., Citigroup Inc., JPMorgan Chase & Co. and Fannie Mae are considering similar programs.

“There is way too much supply,” said Gus Frangos, president of Cleveland-based Cuyahoga County Land Reutilization Corp., which works with lenders, governments and homeowners to save vacant homes. “The best thing we can do to stabilize the market is to get the garbage off.”

Irvine, Calif.-based RealtyTrac Inc. said 1,679,125 houses were in some stage of foreclosure as of June. Ohio ranked among the top 10 states with the most foreclosure filings that month.

Bank of America, which in the first quarter had 40,000 foreclosures, will pay as much as $7,500 for demolition, or $3,500 in regions eligible to receive funds through the federal Neighborhood Stabilization Program.

A spokesman for the bank said the targeted homes are in varying states of disrepair and some are valued at less than $10,000.