California appears to give considerable protection for purchase money mortgages--mortgages used to buy homes. Unlike many other states, as long as the only mortgages were purchase money mortgages, deficiency judgments are not available; the lender's only recourse is to the home itself. Therefore, assuming that you are correct and both mortgages are purchase money mortgages, then neither a first nor a second lender can sue you for any remaining amounts due after you have defaulted and the home was foreclosed upon. Obviously, the default will affect your credit rating, but it seems as if you should be safe from being sued. If the bank disagrees and characterizes one of the loans as not a purchase money mortgage, they may try to come after you on that basis, but you'd have the chance in court to show that it was a purchase money mortgage.