You need to check the verbage in your mortgage papers regarding the banks recourse options. With short sales, it's possible to be released of the lien but not the debt. It all depends on what is in the mortgage papers and if the short sale is negotiated to be released of the lien and the debt.
Both lienholder's have to agree to the Short Sale for it to be considered an "Approved" sale.
The first will usually pay (offer) the 2nd lienholder a share of monies, ($3,000 +). It is up to the negotiator on the 2nd to agree to this payoff. Many times they come back and want more monies to settle.
Your agent should have been pursuing negotiations with both lienholder's throughout the process.
Also, be aware that proceeding with a "short sale" does not stop the foreclosure process! You must stay on top of the whole situation for it to be an "approved" sale.