Red tape at the Resolution Trust Corp. is tangling the sale of real estate inherited from failed savings institutions and adding millions of dollars to the cost of the bailout, a congressional report charges.

"Investors and would-be homeowners have encountered innumerable stumbling blocks in their attempts to negotiate purchases of RTC-held assets," said the report, released Wednesday by the staff of the Democratic-run House Banking Committee. An RTC spokesman disputed the findings as "nonsense."The report conceded that the 16-month-old RTC "has been assigned a difficult task in cleaning up the largest financial crisis in the nation's history." But it said the agency must develop a better sales effort if it is to succeed.

"Uncooperative property managers, difficulties in obtaining current and accurate appraisals, delays in contract negotiations, deteriorating condition of assets and a simple inability between RTC and many potential buyers to effectively communicate have delayed or prevented the closing of countless transactions, costing the federal government millions of dollars in carrying costs while billions of dollars worth of unsold properties continue to deteriorate," the report said.

"Congressional offices have been inundated with letters from frustrated investors, brokers and homebuyers who have found that purchasing property from the RTC is not a simple case of arriving at mutually acceptable terms of sale, but rather involves hours of sifting through paperwork and bureaucratic red tape, often leading to frustration and disappointment," it said.

The staff's report was released as the Banking Committee opened two days of hearings to review testimony from more than a dozen agency critics but from none of RTC's top executives.

Charles Bowsher, head of the General Accounting Office, Congress' auditing and investigative agency, was on Thursday's witness list.

RTC spokesman Stephen Katsanos called the report "nonsense." From the RTC's creation in August 1989 through Sept. 30, it has taken over 493 S&Ls with $251 billion in assets, he said. At the end of the period, it was left with 207 institutions and $142 billion in assets.

"We've moved assets roughly the size of Citicorp back into the private sector," Katsanos said. "I think it's been a pretty productive year."