Many homeowners think if they go to foreclosure they “wipe their hands” from their lien and will never hear from their old lender again. Often, homeowners will avoid a short sale because they think they will have to re-pay part of their mortgage yet think if they go to foreclosure, they are “free and clear.” Contrary to this belief, in many states the lien holder has 5-6 years to contact the homeowner for deficiency judgment. With a short sale, a good listing Realtor will ask the bank upfront if the seller will be held liable for a future deficiency payment. Banks are sending these unpaid liens to credit agencies, so it is not rare, both with short sale and foreclosure, that a creditor will be calling a seller that went to foreclosure.
For more info, visit this article from CNNMoney.com.