The bank will seek judgement for the mortgage owed and there won't be any assets to sell off.

The bank could get a deficit judgement, but some states limit that too.

If they don't serve the notice in person and physically hand the notice to the resident, then you can only get a judgement for possession and not for monetary damages.

Evicting them and getting a judgement is the most important steps to take at this moment and seeing as the house is next to you it would be best to have the owner do it now.

Sure, as already said the judgement gets paid from the proceeds of the sale. 

ok, this is a strange one...i have a couple that applied for a $1k house. they are ditching their paid off house in detroit because their taxes and area are terrible. they heard gun shots at night. some of those houses can be picked up for $500, but that's another story.he makes 75k, she makes $35. so income is not a problem.using TU move service, they are absolutely current on all bills. everything is green.he has 3 collections (total ~$800). she has 4 judgements (~1800) and 3 collections (shares one with him).i liked them when i met with them. and i can read people very well.i want to talk to her to find out what happened, but wanted to see if anyone has any suggestions.

It's really a judgement call.

The deficiency would go to the seller, and should not come back on the property after closing.You can write as an addendum "Seller will not agree to a short sale approval without the bank agreeing to waive their right to a deficiency judgement on the short sale approval".

and that the Agent (PM) "shall not be liable for any error of judgement or for any mistake of fact of law . . .

However, there are some things we look for as red flags on a bad borrower.Namely, judgements, tax liens, and or consecutive mortgage lates.