Yes they can move forward with the foreclosure. The short sale option is a liquidation option the lender offers based on guidelines. The reason the lender has not got back in touch with you in a timely manner is because they are swamped with files. It isn’t uncommon for a lender’s Loss Mitigation or Short Sale Department to have a distribution of over 300 files per mitigator. Most of the loss mitigators work forebearance or payment workout solutions. They work short sales in between those files. Some lenders have separate departments for working short sales, but most do not. Unfortunately this causes a huge bottleneck situation and massive delay in terms of getting ANYTHING approved. In fact, often you MUST get the sheriff sale postponed in order to get a short approved in time to close on it. When you deal with the lender you work on their time not yours. That is nature of the beast in this industry right now.