With short sales it will depend on the loan product. If it is a FHA loan the deficiency rights are typically not persued. However, with a convenitional loan they can be persued depending on the banks policy. Currently I have a short sale that has been approved that Wells did not go after the deficiency but it looks like by the form it is a decision process and am sure it is tied to the amount of assets the mortgagor has.
HAFA are not regulation and do not aply to all banks or all mortgagors. The major banks seem to be on the participation list but the mortgagor needs to aply to see if they qualify. Major items are that there needs to be hardship and it needs to be the primary residence. If there is a second mortgage it gets more tricky.
you can find more on the program at http://www.makinghomesaffordable.gov
First Weber Group
Certified Distressed Property Expert
As far as Wells Fargo is concerned. I heard that Wells Fargo now processes short sales the same way that Wachovia has handled them for some time (i.e., local short sale departments as opposed to centralized processing and quicker approval) as far as loans that Wells Fargo still owns. They have a slightly different process for short sales which involve an investor. I received an from our local short sale department manager with a flyer that talks about the process for short sales involving investors. I can e-mail you the flyer I received. Just send me an e-mail and mention Wells Fargo short sale process in the subject line.