You misunderstood Ads post. They ATTEMPTED short sale, but the bank rejected the offer that was near the mortgage balance. Because of this, they got foreclosed on.
Unfortunately, yes they can come after you on the 2nd lein. You can attempt to negotiate with them and settle for less than what is due because they know they are getting nothing from you. Just make sure you get them to agree not to report it to the credit agencies an GET IT IN WRITING BEFORE PAYING THEM A PENNY. You will already have a foreclosure on your credit report, another hit on it won't make it look any uglier.
Speak with a lawyer as Anna suggested or a financial counselor to see what your options are and how those options will affect you both near term and in the future.
Best of luck,
Because it's more than real estate. It's RAYL-Estate!
Brian Rayl, REALTORÂ®, e-PRO, SFR
Keller Williams Elite Park Cities