Hello; I am curious now....what did your attorney say? This, besides the regular meetings my company has with legal counsel to make sure we are up to date on these issues, is what I based my original answer on. This is not legal advice and I, again, tell you to seek an attorney. I believe my first answer was the right answer but it is only my educated opinion, not the fact of an attorney.
"California has enacted anti-deficiency legislation which is found in Code of Civil Procedure sections
580b and 580d. Code of Civil Procedure section 580b prohibits deficiency judgments based on the
character of the loan at the time it is made. A lender whose loan is made for the purchase of
residential property containing one-to-four units, one of which the borrower intends to occupy, and
whose loan is secured by that same property, may only pursue the security and not the borrower.
Additionally, section 580b prohibits a seller who has carried back a loan as part of the sales price of
the property from obtaining a deficiency judgment against a defaulting borrower. This seller carryback
rule applies to any type of property, not just residential one to four."
I still think you should consider a short sale....