It is technically recourse but effectively almost any single loan in California isn’t recourse because of the “single action rule” (also called the one action rule). Lenders can take the house or go after your for the debt, but not both with that rule. They can go through a judicial foreclosure instead of a non-judicial foreclosure to get recourse but that is an extremely long and expensive process. To give you an idea of how rare it is the last person I can think of that almost got judicially foreclosed on was Michael Jackson.

As for the risks. The risk is that the property has some condition that makes it not lendable. Most issues are fixable, some aren’t (some title defects, land issues, or you sit on a nuclear waste dump). The other issue is that cash out refinances are much more conservative so you might only be able to get 60-75% of your money depending on the lender.