Legal Question in Real Estate Law in California

You have not told us enough about the loan, but assuming that it was a purchase money [all the money was used to buy the property] first deed of trust, if the bank goes through with a non-judicial foreclose [which it does 95+% of the time], then the anti-deficiency legislation would prevent the bank from trying to collect the difference between its fair market value and the amount left on the loan.

Do not trust what Shers said except "you have not told us enough about the loan." Everything after that is guesses. Re-post your question with clear statements of the facts of your loan and situation, or call a lawyer in person.

I agree with Mr. McCormick. I strongly suggest you consult with a competent attorney, who will want to know details about the loan and any other encumbrances to give you full and complete advice.

None of the previous answers is "wrong." They present basically the same conclusions differently. While banks rarely come after deficiencies on purchase-money firsts, a risk factor is pesent here, namely, the cash on deposit in the same bank by the same or a related party, which could result in some kind of offset-related maneuver or give the bank an incentive to go for a deficiency judgment.