REO at Auction before it goes to HUD

[Luke Carl]

So I found a property I'm interested in on an auction website. It's an REO and it was an FHA. This is the banks attempt at selling the house before they file a claim with HUD and sell it back to them.

What motivation does the bank have to not just put a high reserve on it and not sell it on an auction website so that they can just sell it to HUD and be done with it? Why bother selling it to me other than their "attempt" on paper to make HUD happy?? Does HUD offer them pennies on the dollar?

Any advice? 

Thanks