Depending on the 'bank' involved, the foreclosure process and short sale can run parrellel paths with the clock running on both. This is important becuase if the loan has been in defalult for YEARS the foreclosure has been running for a much longer time than the short sale clock.
You should turn your question to the negotiator and discuss their expereince with the lender, servicer and even investor group(s) involved. In some cases the foreclosure clock will be suspended until the short sale crashes and burns. This is usally accomplished by the lender responded with a counter offer at market value. The buyer, hoping for a deep discount, becomes discouraged and exits the deal, and the crash predictably occurs.
The answer to your question is, 'Hang in there, this game is not over yet.! Be agile and flexible and understand you do not have a good faith partner on the other side."
Are you writing on behalf of Donald Hemminger, Jr?
Did your response end up attached to the wrong question?
I do have a very fully, meaningful and relevant life and with such orientation, I find great difficulty connecting the dots between the question and your response. When it comes to Property Tax defaults, you need to turn your question to NEW YORK professionals, NOT Texas. You indicate you did call the Pierce County assessor's office. That is the right place to start.
I shall next respond to Donald regarding SHORT SALES which is an ENTIRELY different and completely unrelated conversation.
Don't panic yet. The first person you should be asking is your agent. Depending on where you saw the status change could be meaningless. Short sales are by definition distressed properties. The vast majority in my experience are not paying a mortgage and haven't for a long time.
It is possible that the bank could foreclose in the midst of the negotiations, so it would be good to get what you've seen to your agent, who should in turn pass it along to the listing agent or negotiator.
I've had a short sale I listed have several auction dates get scheduled then later postponed, but the negotiator at the bank needs to be made aware.
I also had a townhouse my buyer was purchasing get foreclosed in the middle of the process. The law firm handling the negotiations didn't get in touch with the foreclosure department at the lender involved.
I wrote a blog piece called, The Anatomy of a Short Sale. These are multifaceted transactions and are not for the faint of heart. I've attached a link to it below.