Remaining Loan Balance?

[Donna S.]

My friend is getting a divorce and is underwater with her mortgage. Refi'd last year for 100,000., the house appraised for 110,000. Said house would possible sell now for about 85,000. Neither party can afford the payments alone. An experienced REI in my area suggested to her that he could negotiate a short sale and buy her out of it since the short sale will only effect her credit for 2 yrs but the FCL will last 10 yrs. What happens to the remaining loan balance? Will the homeowners still be responsible for paying it back? Thanks