it is illegal for the Bank to require you sign a contract that says you will pay them back the 40k even after the short sale. However, Chase still conducts the practice, other banks probably do also. You have very little leverage over the bank.
In Arizona the bank CAN require you to sign a promissory note as a condition for approving your short sale, it's not illegal if you sign your rights away.
You need to talk to a real estate attorney in PA, end of story. Everyone on here can talk all they want, but you need to go to the source of legal advice & get some facts IN WRITING.
You can't make an educated decision utnil you have the facts. Go get the facts & then you can begin the process of weighing your pro's & con's. Yes, it will be worth the fee you have to pay. Invest in your peace of mind.