Legal Question in Real Estate Law in California

I think the key here is the lawsuit. What did the 2nd lienholder demand in the suit, and with what result? Did the borrower present a defense? I recommend going to the court and giving the file a complete review, or having a lawyer do this.

There is no such thing as a redemption deed in California. Are you talking about property in another state? If so, you need to ask the question of the Law Guru panel in that state. There is also no such thing as a rescission of a deed of trust, at least not as a title document. You could obtain a judgment for rescission of a deed of trust and record the judgment. You are also making no sense when you say the "Bank foreclosed on the 2nd lien holder." A lien holder is the one who forecloses, not who is foreclosed on. If you are talking about property in another state where these terms have legal meaning (such as TX which does have redemption deeds), you need to re-ask the question under that state in LawGuru. If you are talking about California property, you need to have someone help you get your terms corrected and description of the events you are asking about straightened out, so we can tell what you are talking about.

A redemption deed is a tax term. I suggest you gather the documents you are speaking about and get some consultation with a competent real estate attorney.