Legal Question in Real Estate Law in California

You need to understand what "writing off" a loan really means. Essentially, it is nothing more than an internal bookkeeping decision by the creditor. It decides to treat the loan as more appropriately not shown on its books as an asset any longer, reflecting the relatively low chances of collecting. Writing off a loan is sometimes accompanied by selling the loan for cents on the dollar to a bill collector or speculator. Nevertheless, the lender's internal decision to "write off" the loan does not affect the borrower's liability. The borrower is not forgiven by the mere act of writing off the loan. Borrower forgiveness can result from other acts, such as a short sale or a decision to foreclose by trustee sale (and accept a shortfall without recourse to the borrower), but there is no foregiveness caused or implied by the mere act of writing off a loan.

My big question to you would be whether the security for the loan is being foreclosed, or some senior deed of trust? You may have defenses depending on the facts of the underlying transaction and the status of the foreclosure. I suggest you speak to a competent real estate attorney.