bank is following the loss migrantion procedure

They will buy it in Foreclosure Auction at the exact loan amount several years ago. But now, due to the amount of the foreclosures, they are willing to take 10% to 30% loss on the auction alone. Remember the bank is paying left hand with right hand, so that is no loss on paper, or pay real money. Then they will deal with the house in the left hand and likely they will try to sell in market with agents. Then you can bid a lower price to let left hand of the bank to sell it to you. That is the juicy part, you need explain well to the bank why this price is reasonable. It could be long to wait a response from banks because the banks are not good at selling (not their strength).