It is actually good business. Many of these homes will become bank property after they are put through costly foreclosure proceedings, subject to theft and vandalism while empty and large sales costs and price concessions.
In addition, the excess inventory in the market will tend to bring other home prices down and subject other properties to the same fate.
The banks usually let politicos and their insider pals in on the deal and they buy the properties on the cheap and turn around and sell them at a huge profit....but you have to be in a position of power to have access.