CA does not follow the federal rules for limiting the mortgage interest deduction, they are less restrictive than the federal government. Therefore, there should never be a negative number in that adjustment box. The number should be at worse blank, but could be positive, if the mortgage interest deduction was limited on your federal return and CA is giving you an additional tax break.
It appears an update has arrived for the CA forms. In the CA interview now you should get question in the "Income and adjustments" interview section asking you to input "end-of-year" mortgage balances. When you put zero in for ones paid off, the mortgage interest adjustment should correct.
You may also "Edit" the "Mortgage Interest Adjustment" item to get to the questions.
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