With short sales the seller is already risking getting a 1099 for the difference of what they owed 
on the home and what it sold for after their “bank” approved the sale, this is known as phantom income. As such it’s standard practice for Realtors talking to a seller about selling short to advise them to speak to a CPA and/or real estate / tax attorney about the tax consequences before doing it…Well, it’s getting even more complicated now, apparently there’s a new trend of lenders beginning to require sellers to sign a note to repay that difference or they will not allow the sale; this is on top of the 1099.
An interesting article from the New York Times came out, you can catch the link below….. I guess Portland has it good because when I read stories like this one I’m flabbergasted. We have our squatter problems but I have not seen any true indications that it is organized here in Portland to the extent I read in the article.
If you are interested in seeing what bank owned properties are looking like out there, send me the area, zip code, school district, or whatever your area criteria is and I’ll shoot you off a report with pictures, addresses, etc…