You need to seek help from a foreclosure and bankruptcy attorney in your area.   There is an antideficiency judgement statute in Oregon but it does not necessarily apply on a short sale.  A lender could agree to release or “waive” its security in exchange for partial payment of its note on a short sale. But unless the lender agreed to fully extinguish the debt, it could sue on the note balance and collect any amount that remained unpaid.  I do not think that the lender "can't" waive the deficiency from what I have read.  And I would challenge the lender here to come up with the legal backing for it's statement.  Good luck.