A junior mortgage lien cannot be stripped off in a Chapter 7 bankruptcy just because it is entirely underwater. California law pretty much says the same; see Barbieri v Ramelli (1890) 84 C 154, holding that a secured creditor’s demonstration that the mortgages senior to hers exceed the value of the property is not enough to let her bypass the oneaction rule and sue on her note. On the other hand, if the senior has actually foreclosed his superior lien, then she is a “soldout junior” who can sue directly on her note without foreclosing.
Bernhardt, Roger, "Bank of America v. Caulkett" (2015). Publications. 745.