California recently passed a law that may stop lenders from foreclosing on a home while entertaining a short sale or loan modification, but until the law goes into effect 1/1/2013 the banks can and will continue to "dual track".
What's frustrating for homeowners and real estate agents is that short sale approvals are not a guarantee that the lender won't foreclose at the courthouse steps. All we can do is try to get postponements for our clients. We are usually successful unless the "investor" who owns the loan decides that a foreclosure is the most profitable course of action. (They are not required to notify the real estate agents or even the processor at the bank that they are going to exercise their legal right to go to auction. However they are required to record and post notices at the property site to notify the homeowners.
Realty World All Stars is fortunate to have experienced short sale agents in the country working on our "team". Our agents have helped hundreds of homeowners successfully avoid foreclosure. It is unfortunate that even as hard as they try, the best agents cannot always get the lender to accept less than the full amount owed on the loan. The lender makes that final decision.
We see first hand the hardship and negative impact on people's lives FORECLOSURES create and work diligently to help our clients avoid it.