Hi
Sorry about your dilemma however please retain hope. Properly done there is no reason why you should lose your family home, indeed I think it highly unlikely given the facts you set out. Go ahead meet the PIP and see what they say. It is important to continue communications with the Bank despite the difficulties so that they do not seek to portray you in an overly negative light. A good PIP should fight hard for you!
As an aside when you voluntarily agreed to sell your house was there any agreement or discussion on the shortfall? I am taking it that there was not.
Banks should be under some type of obligation or clear consumer code obligation in situations such as these. Banks should have the ability to recover as much as possible/practical for the money lent, no question. However, on the flip side, in situations like these there should be an obligation on them for the full debt to be discussed/considered at the time of negotiating a sale (be it forced or voluntary). Ridiculous and wrong for Banks to sell, they 'keep their head down' while the sale process is on-going, and when the money is in they then chase, often aggressively, the shortfall. These type of tactics should not be allowed to happen. Absolutely they should get money back, it is the piecemeal, often sneaky/aggressive manner in which they chase the shortfall that I think is wrong and puts serious pressure and stress on consumers, many of whom are frightened by the Banks and not used to dealing with them. This is wrong.