Can a lender / bank go after your personal savings i.e. savings, CDs or IRAS in a short sale settlement?
A short sale is a negotiation between you, your lender, and the buyer. ****The lender can ask for a contribution from you--but you can say no. Of course the lender will want as much as it can get from you. It may request cash or demand that you sign a note for part or all of the shortage. But it doesn't mean you have to just fork it over. I recommend having a real estate attorney or bankruptcy lawyer experienced with short sales, foreclosures, etc. help you with the negotiations.
If your lender won't budge and the sale can't be concluded, it could cost you some money--either by continuing making payments to avoid foreclosure, or having to pay up when the lender forecloses. In most states, if the lender can't recover the balance owed by selling the property, it can take you to court and sue to recover the funds. And if you have the money, well, you may have to part with it--this is called a deficiency judgment.
But all the leverage isn't with the lender. First, if you don't have the money it's pointless for anyone to incur the expense of taking you to court. And agreeing to a short sale saves the lender the trouble of foreclosing and having the property on its books. Convince the lender that it will get the most money from a bad situation by accepting your offer. If you are insolvent you could offer the lender a deed-in-lieu of foreclosure and file bankruptcy--certain retirement accounts and other assets are protected in that event. Again, a lawyer may be your best guide in this situation. There's a site called www.debthelp.com that has a ton of foreclosure and bankruptcy information. Nolo.com is also a good resource.