Well, the best way is to have a good agent who is constantly monitoring the new inventory coming on to the market everyday. That way, you will know that day if a bank owned property comes on to the market and you can move quickly. The banks also do have websites where they list all of their foreclosed properties for sale; however, that is basically a central database of properties that are being marketed by an agent and are already on the mls.
Another option is something like realquest. You can see properties on this site that have foreclosure activity and then do more research about the current status of that particular property. I know there was a story about "shadow inventory," which is basically inventory of homes that have already been foreclosed but not put on the market in order to not flood the market. Realquest would probably be a good tool to help find these.
Feel free to give me a call at 415 728 5580 or email firstname.lastname@example.org is you have any questions or would like some assistance.