My question involves a foreclosure in the State of: California

I am in the same boat as a previous post in that I have recieved a 1099 A and no 1099 C. I issue I have is that on the 1099 a it states the outstanding balance on the loan at $306,000, and lists the fair market value as $337, 587.
How can this be? Last year at foreclosure they auctioned the house and it sold for $120,00, thwen within the last 8 months the company that purchased the home at auction, sold it for $169,000. so where the heck are they coming up with the fair market value of $337,000. I talked to the lender who sent me the 1099 they said I had to subtract the outstanding debt from the FMV, and that was what i had to clain as income on my taxes. Whats going on here ? Any help