REO listings in my market are getting 11 offers, is direct-to-asset-manager a real thing or folklore

Both descriptions are pieces of a system that changed shape. Large servicers do outsource default asset management to vendor networks, and those vendors assign listings to agents by algorithm and scorecard, so there is rarely a single human asset manager holding discretion over a single house in a single zip. Cultivating one of them as a source of off-market inventory mostly doesn't work the way it did fifteen years ago.

What does still move is the agent layer. The agents who hold REO listing assignments hold dozens at a time and they see the pipeline: the BPO they just submitted, the property that's finishing eviction, the one where the buyer's financing died on day 19. Being the person that agent calls first is a real and boring edge, and it's built by closing cleanly on the ugly ones nobody else wants, not by asking for favors on the good ones.

On falling out of contract, you catch those by monitoring status changes rather than new listings. Set your MLS alerts on back-on-market and price change in your zips, not just new. Most agents will also re-approach the second and third bidders from the original highest-and-best round, which is an argument for bidding on things you expect to lose, because it puts you on that list.

The part of your post that concerns me more is 11 offers at 4 to 7 percent over list. That says the REO channel in your two zips is priced to retail, and the built-in discount you need isn't there. Chapter says supply of deeply discounted bank-owned property reaching the public stays modest, and you're feeling exactly that. Grinding harder on a channel that's clearing at retail is a slow way to lose. Pre-foreclosure sourcing, where you negotiate with the owner before the auction, has more friction and less competition, and your 70 percent ceiling has room to live there. Different skill set though, mostly outreach and human patience rather than bidding.