Legal Question in Real Estate Law in California

If the bank's agreement letter says it is, it is. If not, it is not. However, if they issue you a 1099 on the unpaid balance, it is highly unlikely that they will later undo that and go after you.

Parties who negotiate and sign short-sale or loan modification agreements get what they negotiate. Some of the contracts are good deals, many are not. If your goal is (among other things) to be worry-free after the deal closes, you have to be sure the black-and-white of the agreement says (in effect) that the borrower/seller is no longer liable on the loan. Read the papers carefully. Some bad deals actually have the short seller admitting that he remains liable for the deficiency, or that some kind of new obligation is created.

I agree with my two colleagues and it depends on what your agreement stated. It should have had words to that effect in it before you signed it. If it was your primary residence and it was the first then by operation of the law you are not liable for the balance as to the first only. If you and a second, you are still liable for it. if it was anything other than your residence then the anti deficiency laws don't apply so you would be still liable for the balance. That is why it is important to make sure that was in the agreement you had with the bank.

Good luck and hope that helps.