Well, first of all, if you only put in an offer and do not have an agreed upon or signed contract, your earnest money should not have been deposited, but your agent should have advised you if you were under contract. The bank is not emotionally attached to the home, so they typically accept or reject. If they reject, you can make another offer. You should ask your agent if there are any other offers on the table. In this market you never know what a bank will accept in an offer and I am of the belief it never hurts to try, all they can say is "no" , right? However, if there are other offers coming in, you need to ask yourself how much you want this home, then decide whether to increase your offer or not. Good communication is KEY to the enitre home buying process, foreclosure or not.
I would definitely ask about your earnest money though, if you are not under contract, your EM should not have been deposited. Try to be patient, if you want a foreclosure or bank owned home, they do not move as fast as the "normal" process...it can sometimes take 90-120 days to get your home to closing.