This rationale for the anti-deficiency protection of Cal. Code Civ. Pro. 580b continues to be articulated, most recently by the California Supreme Court in Deberard Properties, Ltd. v. Lim, 85 C.Rptr. 2d 292, 294 (Cal. 1999).   But the logic of the rationale has been criticized, including in the concurring opinion of Justice Kennard in Deberard Properties.  In that opinion she writes:

Assume the fair market value of the property is X.  If the seller finds a buyer willing to pay 2X or 3X for the property, the seller is no worse off selling for that price (and often will be better off) than selling for X.  In either case, if default occurs, the price the seller will be able to resell the property for is the same regardless of the initial selling price (assuming a stable property market, that price will be X).  The seller gains nothing by refusing to sell its property for the higher price, and loses nothing by selling the property for more than its value as security.   Although overvaluing may increase the risk of default in property bought for commercial purposes (by increasing the income stream the property must generate in order to pay for itself), the increased selling price may well compensate the seller for the increased risk.  Moreover, section 580b encourages buyers to offer more than the market value of the property because they know that in the case of default they will not be personally liable for any deficiency.  In my view, the criticisms of the overvaluation rationale . . .  are well founded."  Deberard Properties at 300.    

     We know of no studies attempting to empirically verify the overvaluation rationale or its criticism.