Opening Prices at the Courthouse Steps

[Marian Smith]

I have viewed a couple of auctions but have never tried to figure out whether there was a rhyme or reason to the process. My question: Do loans held by Fannie or Freddie open at the loan value every time? Or do they appear to use a BPO prior to the sale to set a price?
An FHA or VA insured loan would be auctioned at loan value for obvious reasons. The banks, for the most part,either open at loan value (or loan value plus fees etc) or they get a BPO and price it for something like "market value minus 10-25% fix up and 6% realtor fees and holding estimates." That must be why you see a 22 year old 4 bedroom that has been a rental for 4 years with an out of state owner with a starting bid of 30-40k under market.
Do the banks try to open at loan value to be sure someone's relatives don't loan them the money to buy back their house at a steep discount?
Anyone willing to share? I just want to know if it is worth the trouble to research a Fannie Mae property if it is going to automatically open too high to warrant a bid. (They never have enough equity.)