PatentGuy
When whomever negotiates with the lender does so they should be requesting specific language and leveraging the sellers position to get it. If the lender forecloses that is their one action. Their alternative if the seller stops paying is a judicial foreclosure which is very costly, time consuming and has a 1 year right of redemption (i.e. they have to hold onto the property for a year and the former owner can repay them and get it back). Judicial foreclosures are very rare in CA.

iN a short sale the matter is settled today and they can get it off their books. To go the foreclosure route they will have anon-performing asset for at least 6 more months assuming he is current today.