Any Mortgage/Foreclosure gurus?

California is a non-recourse state. The home is the only collateral in the deal. There are some caveats to that. If the home was purchased then refinanced, but, it rarely ever happens because the foreclosure procedure to go after the re-fi monies is long, difficult and expensive.

If you sell the house in a short sale, you lose your down payment anyways, moot point.