Auction Fallout vs. Homepath for Fannie REO's/Pool Sales

[Mike Gleneck]

This is my first post, thank you in advance for any help.

My parents are very interested in a Fannie Mae owned property that has been on the market for several years. They put an offer in at $90k which was rejected. I was told by my agent that since it was "Online Only" that it had probably already been to the convention center and this was probably the final auction.

I was the highest bidder at the online auction for a few thousand under $50k. I did not meet the reserve requirement but was told that they usually will accept the highest bid for online only auctions. Then I got the news that my offer was rejected with no counter etc. The auction company did not tell me anything, but I called Fannie directly. They told me that since my offer was under $50k it was going to "Pool Sales" to be sold in a group of 15-60 properties in multiple states. Personally I don't have the $600k to $2.4MM that it could possibly take. They told me at the time that there was no way I could make a normal offer on it, or increase my auction bid to be above $50k. They told me that the pool sale was final and it would not go back up to auction.

A week later, it was listed on the auction site again. So I contacted the person at Fannie Mae, they said that it was correct that it was up for Auction again.

I asked the person at Fannie Mae if the same rule applies. IE if its under $50k it goes to pool sales, and $50k+ it doesn't. She said:

"NO. When it comes straight off of Homepath...we are restricted to under $50,000. When it is Auction Fallout we do not have that restriction. This would be Auction Fallout."

Essentially, my parents really want the property. But I'm buying it for them and don't have a ton of cash (just bought 2 other places). My assumption was that if I just bid a little higher to get above $50k, that even if I don't meet the reserve that they should offer it to me as the highest bidder. I was told that is not the case.

Any experiences with something similar? Or ideas for strategies?

I want to get the property, not risk it going to pool sales, but not pay too much.

I've already been the highest bidder. Anyone who has heard of Auction Fallout please explain the difference from Homepath Auctions. If you know the cutoff for something going to pool sales from auction fallout % of asking price or $ amount please share. Thank You!