Legal Question in Real Estate Law in California

The general rule is that a refinance of a note removes the purchase money anti deficiency protection of Code of Civil Procedure section 580b. But refinance in that situation means a new note and a new deed of trust are taken up, and the old ones are cancelled. If the loan itself is modified as to payment terms, but is not a new loan, then the argument seems sound that it does not lose its purchase money characterization. I do suggest, however, that you look very closely at the modification paperwork, and even have it reviewed by an attorney who can give you a more definitive and formal opinion.

Refinance, which is what you are doing, allows for deficiency judgment if you later default. The new loan paperwork will disclose that in the fine print. Read it. Choose wisely.