K: While it is true that CA is a Non-Recourse State, refinancing removes this protection. Again, speak directly with a CPA and Tax Lawyer about your situation!
P.S. The CA Assoc. of Realtors supported legislation (SB 1178) that was eventually passed in the CA Senate on 6/3/10 to maintain anti-deficiency protection if one simply refinanced (no cash-out). This was later vetoed by the Governor ;-(... more
You may wish to protect yourself and any other assets you may have by consulting with an attorney who specializes in real estate beforehand; he/she can best advise as it relates to your specific situation-- if you cannot afford an attorney, contact your local Legal Aid Society and or local Bar Association, for a pro bono attorney, free--and or keep in mind that most professionals do offer a free consultation........ more