I signed the letter and closed my sale last Friday. Here is what I have learned:
BoA will not do a release in advance unless the sale is 80% of loan value is recouped in the sales price. I have been told that after the paperwork processes in Buffalo NY, that the recovery department will be in touch to determine what to do about the balance. They will ask for income and expenses for the past six months to determine if it will be a 1099C, partial repay or full reaming
The specifics may be different for others, because BoA is going on guidelines for the owner of my mortgage (they sold it to WellsFargo at some point). But this is their general process. They understand that this way of doing things is stressful for consumers and may change it in the future.
I should know more in the next several months as I get more detail.
John