There is an earlier response that says it's illegal -- I would like to know what law prohibits a bank selling directly.

I can offer information from the FDIC's website http://www.fdic.gov/buying/owned/real/index.html and also mention that the site contains information on properties that are for sale http://www2.fdic.gov/drrore/

If you have been qualified to purchase investment properties, that would be an excellent starting point. If you are in need of further assistance, please contact my office.

Best wishes,
Michele

You can also go onto different bank websites to find lists. They will then usually point you in the direction of the party selling the property. Many times properties are listed on sites befroe they actually find the way to mls.
You can also try http://www.reotrans.com

All REO's go through realtors. Its actually illegal for a bank to sell properties directly.

Check your local MLS, craigslist and such to find the properties and then call the realtors.