After a long, frustrating, dead-end struggle to get a modification, I've decided to try a short sale. I'm getting conflicting reports about whether or not they can come after me for the deficiency. I just read an article talking about promisory notes, and I can't find my original documents. Is there a chance that I signed one when I bought the house? What does this all mean for a California short sale?

First mortgage is $459,000
Second is $89,000
House may be worth $350,000
The second is a HELOC but it was all purchase money.

To the best of my knowledge (which could be wrong). If you do a short sale being a voluntary conveyance outside of foreclosure then you could be liable for the deficiency. You have a bigger problem in that a short sale is going to require BOTH the first and second mortgage lenders to sign off. That is not likely to be realistic as the 2nd mortgage lender is going to want something (although it might be a small amount of money). The 1st mortgage lender is not going to be too enthuisastic about the concept of the 2nd mortgage lender getting any money. The most likely outcome might be the 1st mortgage lender foreclosing which will extinguish you from the liability of the deficiency BUT you might be liable for a deficiency on the 2nd. (You might not be liable for a deficiency on the 2nd since it was used for purchase money but I am not sure about that)

not in Cali they wont.

Let me preface my comments by saying that I'm not a lawyer.

I believe that California civic code 580b will protect you from any deficiency if it's a purchase money mortgage (never refi'd). So regardless of what your promissory note says about deficiency, 580b protects you from any deficiency with purchase money mortgages.

Can they in Nevada? I short sold my house in July, and the second mortgage accepted $2500 at the time of close. A couple days ago I found out that $2500 was to release the lien to sell the house, and not the debt. I am freaking out. Any info is appreciated. Once it goes to collections maybe I can hire a credit repair co. like Lexington Law to remove it? thank you.