Legal Question in Real Estate Law in California

Unfortunately "foreclosed" is a very common term among lay people that is INCREDIBLY imprecise legally. What that USUALLY means is the lender conducted a trustee's sale under the deed of trust securing the loan, and either the lender took the property or it was sold to a bidder. IF that is what you mean by "foreclosure," then the "one form of action rule" prohibits the bank from doing anything else to try to collect on that loan. Other than some potential tax accounting issues you will need to work out with your accountant, that loan is gone and of no further concern. If they did not conduct a regular trustee's sale, then you need to consult an attorney in person, as the situation will be too complex for internet help.

In order for the foreclosing lender to come after your other property, that property has to either also be part of the security, or the lender has to file a judicial foreclosure action against you, and obtain a deficiency judgment. Code of Civil Procedure section 580d prohibits a deficiency judgment after the foreclosing lender has completed a nonjudicial foreclosure, by exercising the power of sale in the deed of trust.

The rule is different if a senior lender foreclosed, and a different junior lender lost the security by reason of the senior's foreclosure. In that situation, the junior lender may sue you directly on the promissory note.