According to Calculated Risk;
“Under California law, purchase money loans are non-recourse. However once a homeowner refinances, the entire mortgage is recourse … that is probably going to change.”
I could support this. I usually don’t like changing the rules in the middle of the game but the feds are doing everything possible to pump money into the banks, so what the hell.
For example, the Federal Reserve is keeping interest rates at zero in order to help save the irresponsible banks while those people who were responsible and saved their money are being punished because they are earning diddly on their savings. The zero interest rate policy is an enormous transfer of wealth from the responsible savers to the irresponsible banks.