In case you did not hear the news over the summer, there is Great news for Livermore, Bay Area and California Homeowners who are underwater and need to short sale their home: Short Sales in California Now Have to Be Non-Deficient! In layman terms, the banks can no longer come after you for any additional funds once you closed an approved short sale in California.
There are now California two laws in place regarding short sales and how they have to be non-deficient in California now: SB 931 (has to do with the first liens having to be non-deficient) and SB 458 (as of July 15 of this year, second lien holders cannot pursue a deficiency after short sale either). Below I included the link to a video that one of my coaches did related to SB 931 to explain the law so you can check it out for yourself. If your loans are not original purchase money loans and your second is an equity line, I highly recommend that you confirm it with an attorney since refinanced loand and equity lines have historically been treated a little differently; hopefully, the new laws will take care of that!
He is the link to the video:
http://theshortsalegenius.com/what-is-sb-931-and-how-does-it-impact-second-liens-2nd-mortgages/2011/01/07/