The short answer is not easily if you are looking in Palo Alto. When a bank forecloses on a home they give the listing to an asset manager who then turns it over to a realtor who is responsible for evicting the previous owner, securing and cleaning the property, and then putting it on the market. Once it is on the market, usually for a price significantly lower than the other homes around it, then offers are looked at. In general, banks like to see offers in this order;
Conventional pre-approved loan
You must agree to purchase the home in it's as is condition although you can do inspections.
There have only been 4 foreclosed single family homes in Palo Alto in 2009. I have a client who bought one that had 13 offers on it.
A biger problem than the hoops you have to go through is that banks have slowed the release of foreclosed homes to a trickle. One Wachovia Asset manager told me they fired half of their asset managers because of the slow down in both the foreclosure process and the rate at which they would be released. Because of the change in accounting rules banks can now do a mark to market accounting on bad assets so they can claim a bad mortgage is actually worth more than it is by not selling the foreclosed, or to be foreclosed home for 18 months.
Many banks are now getting wise to the concept that if they let the seller do a short sale the bank comes out ahead financially.Short sales will generally net the bank 75 cents on the dollar after all expenses are paid as opposed to only getting about 45 cents on the dollar after expenses for a foreclosed property. I believe you will see more short sales in the future, but don't expect to see a rash of foreclosed homes coming on the market in Palo Alto, even if sites like Realty Trac show an inclrease in the notices of Default.
I hope this makes sense. If anything is not clear please let me know.