I don't need to know how to find REO listings or how to contact REO agents.

I want to find out how a few investors in my area seem to be getting properties inbetween foreclosure and the property going back to the bank. I have seen this happen more often and I can't figure out how they do it. For example, title will show the investor took the property from Recontrust Co. for 50% of what was owed on the first loan (second was totally wiped out). The investors then wait a few months until the property qualifies for FHA and then list it for huge profit. As far as I know, these investors are not buying with cash at the courthouse because the first liens are prohibitively high. Can you help me figure this out?