Is illegal for a real estate agent in California to represent an investor in the purchase of a residential house that is in foreclosure?

NO! it is perfectly legal for a licensed real estate agent in the state of California to represent an investor client in their purchase of a property that has A) already gone to the bank i.e. foreclosure but as well B) a short sale i.e. a property that has had notice of default flied against it and is in the process of being foreclosed upon by the note holder