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Outlook keeps asking for password on first run - Exchange 2007 - 2013 co-existence.

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So here is my situation:

I have an Exchange 2007 (my main Server ) and i have recently added a new Exchange 2013 in the same forest with a plan to move my users there slowly while in co-existence. What i have done is i have installed the exchange on a new Server 2012 R2 and i now have Mailbox databases , one for the old exchange and one for the new. I can access exchange 2013 ECP , OWA and everything works fine . My dns have not been switched to the 2013 but i have created records separately for it . 

My issue seems to be with outlook anywhere . When configuring users on 2007 exchange everything works fine internally , it auto detects settings and for outside lan connections i enable http access . Now for the mailboxes on 2013 database i have some issues. While it auto detects the settings auto discover sets authentication method to anonymous resulting in popping up for password all the time (even though mailbox is actually connected and can send and receive) . 

My outlook anywhere settings for both servers are :


RunspaceId                         : 2abda2a1-9c7d-4e7d-9861-2ccc4260ff17
ServerName                         : TTSERVER
SSLOffloading                      : False
ExternalHostname                   : remote.tototheo.com.cy
InternalHostname                   : 
ExternalClientAuthenticationMethod : Basic
InternalClientAuthenticationMethod : Ntlm
IISAuthenticationMethods           : {Basic}
XropUrl                            : 
ExternalClientsRequireSsl          : True
InternalClientsRequireSsl          : False
MetabasePath                       : IIS://TTSERVER.ttgroup.local/W3SVC/3/ROOT/Rpc
Path                               : C:\Windows\System32\RpcProxy
ExtendedProtectionTokenChecking    : None
ExtendedProtectionFlags            : {}
ExtendedProtectionSPNList          : {}
AdminDisplayVersion                : Version 8.3 (Build 83.6)
Server                             : TTSERVER
AdminDisplayName                   : 
ExchangeVersion                    : 0.1 (8.0.535.0)
Name                               : Rpc (SBS Web Applications)
DistinguishedName                  : CN=Rpc (SBS Web 
                                     Applications),CN=HTTP,CN=Protocols,CN=TTSERVER,CN=Servers,CN=Exchange 
                                     Administrative Group (FYDIBOHF23SPDLT),CN=Administrative Groups,CN=First 
                                     Organization,CN=Microsoft 
                                     Exchange,CN=Services,CN=Configuration,DC=ttgroup,DC=local
Identity                           : TTSERVER\Rpc (SBS Web Applications)
Guid                               : fed5e59b-9845-4aad-8cfe-230d6ba48976
ObjectCategory                     : ttgroup.local/Configuration/Schema/ms-Exch-Rpc-Http-Virtual-Directory
ObjectClass                        : {top, msExchVirtualDirectory, msExchRpcHttpVirtualDirectory}
WhenChanged                        : 07/10/2013 19:17:53
WhenCreated                        : 07/10/2013 19:17:53
WhenChangedUTC                     : 07/10/2013 16:17:53
WhenCreatedUTC                     : 07/10/2013 16:17:53
OrganizationId                     : 
OriginatingServer                  : TTSERVER.ttgroup.local
IsValid                            : True
ObjectState                        : Changed

RunspaceId                         : 2abda2a1-9c7d-4e7d-9861-2ccc4260ff17
ServerName                         : EXCH1
SSLOffloading                      : False
ExternalHostname                   : mail2.tototheo.com.cy
InternalHostname                   : mail2.tototheo.com.cy
ExternalClientAuthenticationMethod : Negotiate
InternalClientAuthenticationMethod : Negotiate
IISAuthenticationMethods           : {Negotiate}
XropUrl                            : 
ExternalClientsRequireSsl          : True
InternalClientsRequireSsl          : True
MetabasePath                       : IIS://EXCH1.ttgroup.local/W3SVC/1/ROOT/Rpc
Path                               : C:\Program Files\Microsoft\Exchange Server\V15\FrontEnd\HttpProxy\rpc
ExtendedProtectionTokenChecking    : None
ExtendedProtectionFlags            : {}
ExtendedProtectionSPNList          : {}
AdminDisplayVersion                : Version 15.0 (Build 516.32)
Server                             : EXCH1
AdminDisplayName                   : 
ExchangeVersion                    : 0.20 (15.0.0.0)
Name                               : Rpc (Default Web Site)
DistinguishedName                  : CN=Rpc (Default Web Site),CN=HTTP,CN=Protocols,CN=EXCH1,CN=Servers,CN=Exchange 
                                     Administrative Group (FYDIBOHF23SPDLT),CN=Administrative Groups,CN=First 
                                     Organization,CN=Microsoft 
                                     Exchange,CN=Services,CN=Configuration,DC=ttgroup,DC=local
Identity                           : EXCH1\Rpc (Default Web Site)
Guid                               : 18b2bcf1-59fc-4186-8b99-bf37a103ae38
ObjectCategory                     : ttgroup.local/Configuration/Schema/ms-Exch-Rpc-Http-Virtual-Directory
ObjectClass                        : {top, msExchVirtualDirectory, msExchRpcHttpVirtualDirectory}
WhenChanged                        : 30/05/2016 14:50:19
WhenCreated                        : 01/04/2016 12:14:41
WhenChangedUTC                     : 30/05/2016 11:50:19
WhenCreatedUTC                     : 01/04/2016 09:14:41
OrganizationId                     : 
OriginatingServer                  : TTSERVER.ttgroup.local
IsValid                            : True
ObjectState                        : Changed

I have bolded my auth methods for both servers. Please note that i have tried several combinations of auth methods for Exchange 2013 such as Internal ntlm , External basic , IIs All 3 but still same issue . I haven't touched Exchange 2007 settings as most of my users are still there and i don't want to mess it up. Can anyone please help on what might be the issue and why is auto discover setting anonymous authentication on outlook ?

I have also checked "Test Email Autoconfiguration" on Outlook and i have noticed that on EXchange RPC protocol i get Auth Package : Anonymous while on Exchange HTTP its Negotiate meaning it gets the one i set in outlook anywhere config .


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