Homecomings Financial Approved short-sale, then denied it. Dallas Texas

First mortgage holder approved short-sale. Homecoming Financial has the 2nd. Initially approved offer, the denied it. I spoke to a supervisor who only identified himself as "Frank". He said the investor "E Trade" will not approve short-sale, unless I sign a promissory note for the full amount and cannot include it in any future bankruptcy. He refused to give me any documents regarding E Trade policies, refused to give me their contact numbers, refused to send me Homecomings short-sale policies, and said China owns most of the mortgages and they rather let the house foreclose. This can't be true, can it?

MDR
Rocklin, California
U.S.A.