Will the lender tack on the remaining balance of your short sale to the new loan of your next purchase?

I was just asked this recently and want to clarify what happens with the mortgage balance that was not paid off with a short sale.
The definition of a short sale is that where a lender approves a 'short' payoff of your mortgage as payment in full when selling.  There are a few places for the remaining balance of your loan to go and they will always be stipulated in the written approval letter from your lender/servicer. 

1. Lender writes off the balance and waives their right to pursue the deficient balance.
2. Lender writes off the balance but holds their right to pursue the deficiency from the mortgagor at a later time. 
3. Lender accepts the short sale offer, but requires a promissory note signed by the seller in an amount negotiated at the time of the offer.  This could be the remaining balance or a portion thereof.

In all cases, the lender has the right to issue a 1099 for the unpaid balance.  The amount on the 1099 will reflect what was negotiated at the time of the short sale offer.  How to proceed with this 1099 will be determined by your financial situation and ownership status of the home that was sold as a short sale.
Do not hesitate to contact me regarding this and any other short sale questions you may have.  I look forward to helping you determine if a short sale is the best option for your current and future financial needs.