Agreed with Esmith with the following caviot. I have seen different cases with helocs as they are applied to short sales. In case 1 I have seen the lender inform the seller that they will allow the short sale under the condition that any deficiency does indeed become an unsecured loan. That decision is backed up with paperwork that accompanies the release of lien letter and is so stated. This is exactly what you have posted E.

Yet I have also seen the “nicer” lien release letter where the lender does not demand that the deficiency becomes an unsecured loan. I guess different lenders have different criteria on that sort of decision.

Also, and attorneys (DaCounselor) may be able to answer this. Is there any time limit on an unsecured note if there is no attempt made by the lender to retrieve the deficiency after x years?