“When a borrower short sells a property, there is no automatic protection from a lawsuit by the lender for the balance of the note.”
Gosh, I hope Arizona short sellers know that the bank might stick it to them.
“The borrower must be sure to negotiate for a release from the lender. I am aware of situations in which a home owner, ecstatic to obtain the bank’s approval of a short sale, quickly sign the approval agreement without carefully reading and understanding its terms. In many cases, the bank reserves its right to sue the borrower in the future for the balance owed on the note.”
BoA is known for including such language.
If worse comes to worst, you may want to forget the short sale and just let the bank foreclosure, if Arizona’s anti-deficiency statutes would apply to your foreclosure situation.