This is a good representation of homes that are going through the foreclosure process. Some of the homes that are not bank owned may be having the mortgage modified, or the owner may cure the mortgage default. Once the home is sold at auction, it will become bank owned, and then it will usually be placed on the Multiple Listing Service by a Broker chosen by the lender.  
Zip Code for Gilroy = 95020
Zip Code for Morgan Hill = 95037