How can banks drop price so much?

[Heather C.]

I just looked on Zillow at a foreclosed house that we are considering (http://www.zillow.com/homedetails/1712-Loberg-Ln-Jonesboro-AR-72401/76106778_zpid/) and I'm just baffled how the bank can drop the price from $123,000 in November to $79,900 on January 1. What am I missing? House appears to be in decent shape so I just don't get it. Last sold in 2002 for $104,000, but assessor shows value at $131,200.