There is a lot of craziness going on with foreclosures right now. They can be very frustrating to deal with.
It does not sound like you are working with a buyer's agent. Did your agent submit an offer to the other broker?
He is obligated to submit your offer in a timely manner. Do you know what bank foreclosed?
It really would not be his decision to auction the property. It would be the bank's decision. I have seen banks do crazy things like lower the price when there are offers in they haven't decided on. Often the left hand does not know what the right hand is doing.
The broker might be able to provide you with proof he submitted the offer. You can ask for it, at least. When I have represented banks I got a fax within 24 hours acknowledging the offer. I always submit the offers within an hour of receipt and then their is a web page where I could track the bank's review. Sometimes it was quick. Sometimes it takes weeks.