[quote=sdrealtor]Effectively only the 2nd is recourse. The only way they get any remedy is to foreclose. When they foreclose they give up their right to recourse (via 580b aka The One Action Rule) so only the 12% loan on the 2nd is really a concern.[/quote]
I understand this, but neither of the outstanding loans are “purchase money” and there has been no mention of this homeowner being in default. Apparently not YET, anyway!
Hopefully, for allowing the authorities to blow the house up, (s)he was compensated AT LEAST enough to retire his/her encumbrance(s) in exchange for a grant deed.