Legal Question in Real Estate Law in California

First I would suggest that you speak to an attorney to verify that this second does in fact fall within the parameters of California's purchase money anti-deficiency prohibitions. The determination of whether a loan is a purchase money loan, and has not been lost by subsquent events, depends on clear analysis of the facts of the transaction.

If that is indeed a purchase money "mortgage" then I would suggest a letter to the collection agency contesting the debt and triggering the Fair Debt Collection Practices Act.

You need to be very sure that your second mortgage truely qualifies as a purchase money mortgage under Code of Civil Procedure section 580b. That is not always as easy a determination to make as it sounds to a lay person. If, however, you have a true purchase money second that became a sold-out junior, then they have no right to collect or demand payment from you on that debt. Brown v. Jensen (1953) 41 Cal. 2d 193; reaffirmed in Spangler v. Memel (1972) 7 Cal. 3d 603, 609-11.

There is an additional requirement in CCP 580b....your purchase-money second must also have been used to buy a one-to-four unit building and the building, or one of its units, must in fact have been occupied by you, the purchaser. A third-party loan used to pay part or all of the purchase price of an income property, no unit of which is owner-occupied, would not qualify for 580b protection from deficiency or recourse claims.