I have never heard of a bank giving a "recommended" price. However it is common for them to ask for your best and final offer in a multiple offer situation. Make it YOUR best not theirs. And base that on a thorough market analysis of the properties value LESS and improvements that it may need. Sometimes people see foreclosures as a great bargain when in fact it is NOT uncommon for the bank to over price them. Follow your gut on this one for SURE!
In short, it really does not matter what they want or advise you to offer, you have an agent looking out for your best interests to assist you with that. Have them run the numbers, comps, etc... and only offer what you feel comfortable offering (if you even decide to do so). Other homes will come, I assure you that. If it feels shady, walk. I definitely suggest you talk to someone who knows the situation (hopefully the Realtor you hired) before moving forward.