California Mortgage Forgiveness Tax Relief Signed Into Law
Gov. Arnold Schwarzenegger signed a bill that brings California back into partial conformity with the federal law providing mortgage debt forgiveness tax relief retroactive to 2009 (prior California law covers 2007-2008). See the San Francisco Chronicle Article Here.
This is really good news. You still need to analyze the details of the law, as compared to federal tax law, and bear in mind it is not helpful with respect to property that is not your residence.