I'm putting together a short sale package offer for my seller that just got a reasonable offer on her property.  She will be shorting a second.  Both loans are with the same bank.

As part of the "required" documentation that the bank sent me, they included what appears to be a loan application (presumably for a short sale promissory note).  This is the first time that I've gotten this from the bank.

I had recommended to the seller that as our first try on this offer, we make it contingent upon no deficiency judgment or short sale promissory note.

I've closed half a dozen short sales and none of them have required promissory notes or included indications of the bank following up with deficiency judgments.

I'm pretty sure we can paint a pretty dismal financial condition for the seller, but she says that she may have indicated to the bank on the phone, months before, that she may be willing to honor the deficiency with a note.  Obviously, she would prefer not too though.

So, for you veterans out there ...

Should I just ignore this initial request to fill out the "required" loan application for the seller?

Under what circumstances will banks usually demand a short sale promissory note?

What percentage of short sales close with them?