The possibility of deficiency judgments on mortgages varies considerably from state to state: many states, especially in the West, have anti-deficiency statutes dating from the Depression, which forbid lenders from pursuing a deficiency judgment. In some states, deficiency judgments are possible in some circumstances, but not in others, e.g. deficiences might be forbidden on a 'purchase money' mortgage or trust deed, but not if you have refinanced. And, of course, if a senior lender forecloses and junior lenders are wiped out, most often, they can pursue deficiency judgments. You really have to know local real estate and lending law.
The moral of the story is NEVER do a short sale without getting a RELEASE from your lender(s) - unless you're prepared to file bankruptcy to discharge any deficiencies.
A good Realtor will look out for the client. Because Realtors work with the lenders when handling Short Sales, that Realtor should try to obtain a Release for the client to sign so this situation doesn’t occur.
Some people mistakenly believe that walking away or short saling is the answer and it is not. However, Short sale is the best but, again the seller and the seller’s Realtor should ensure that they have the documents that show the deficiency has been ‘forgiven’.