Hang tight and be the squeaky wheel.
If the property owner owes back taxes, things are even more sticky because taxes are first in line for payback on a foreclosure, and they won't accept a reduced payback. A a result, while your offer may sound good, if the previous owner owed $40k in taxes that is $40k less for the various lenders to recoup and makes the whole thing sound less attractive to them to accept.
You may want to ask your agent to look up the property info and see if there were multiple mortgages, taxes etc. This is something they can pull up for free and very quickly, surprised they didn't do that for you already. This may help inform where you stand, and should have been done before you even made an offer. REOs and short sales can take a long time and can be very frustrating. If you're going to pursue a foreclosure just accept now that you will have to be patient and wait it out.
There are several factors involved with selling an REO listing. It is not always easy and fast sell. As mentioned below there may be litigation involved. Previous owner may still have some issues with the bank and the bank is involved with that.
Another is what kind of buyer the bank is looking for. My experience is that they tend to favor cash buyer and buyer with large downpayment over a buyer with FHA loans with no downpayment. Because once they accept an offer they like buyers to close escrow in a very short amount of time. A first time buyer with no downpayment with FHA loan does not fit in that category. Remember that a loan is an important continguency and if that was removed by selecting a cash buyer the whole transaction can close faster. That is not fair but who said banks play with fair and just rules.
The other thing is the price that you offer. I always price the REO by search the comparable properties if the asking price is unbelievable low and if my buyer really wants that home I sugguest an offert price of 5% over the bank asking price. In my area there are multiple offers on these bank owned homes and you are in competition with other buyers. You need to find out from you agent whether the bank has accepted an offer.
Prudential California Realty
The only other thing I can think is that maybe there is a bankruptcy or litigation that may effect how a bank can respond, if I give the bank the benefit of the dought.