Foreclosure Law in California

Non-judicial foreclosure is a process that happens outside of court, using a deed of trust and a power-of-sale clause that authorizes a trustee to sell the property if the borrower defaults. The lender must record and mail a Notice of Default, wait a required period, then record and publish a Notice of Trustee's Sale before an auction can take place. California uses non-judicial foreclosure for the vast majority of home loans. Because no judge oversees the process, it can move relatively quickly, which makes acting early especially important.

The California Homeowner Bill of Rights is a set of state laws that give homeowners specific protections during the foreclosure process. Key protections include the right to a single point of contact at your servicer, a prohibition on dual tracking (pursuing a foreclosure while simultaneously reviewing a loan modification application), and the right to appeal a modification denial. These protections apply to larger mortgage servicers operating in California. If you believe your servicer has violated these rules, documenting your communications and speaking with an attorney promptly is important.

Yes, several paths may stop or delay a foreclosure after a Notice of Default is recorded. You may be able to reinstate the loan by paying all overdue amounts and fees before the applicable deadline, submit a complete loan modification application that pauses the process while it is reviewed, or sell the home before the auction date. Filing for federal bankruptcy protection can also create a temporary automatic stay. Which options are available depends on how far along the foreclosure is, so check the deadlines section and act as quickly as possible.

California has relatively strong anti-deficiency protections compared to many other states. For most residential purchase-money loans and for properties foreclosed non-judicially, lenders are generally barred from suing borrowers for any remaining balance after the sale. However, these protections do not cover every loan type — certain refinanced loans or home equity lines of credit may be treated differently. If you are concerned about a potential deficiency, speak with a California attorney before the sale takes place, since the rules are technical and fact-specific.

Dual tracking refers to a practice where a servicer continues pursuing a foreclosure sale at the same time it is reviewing a borrower's loan modification or other foreclosure-alternative application. Under the California Homeowner Bill of Rights, servicers are generally prohibited from recording certain foreclosure documents while a complete application is pending review. If you believe your servicer is dual tracking your application, document all written and verbal communications and consider contacting a HUD-approved housing counselor or an attorney right away.

Yes, several programs exist. The California Mortgage Relief Program has offered assistance to homeowners who fell behind on mortgage payments due to financial hardship, though program availability and funding levels change over time. The U.S. Department of Housing and Urban Development (HUD) sponsors a national network of free or low-cost housing counseling agencies with counselors available in California. Some homeowners may also qualify for workout options offered directly by their servicer. A HUD-approved housing counselor can help identify which programs are currently accepting applications and whether you may qualify.

If no action is taken, the foreclosure process will continue through each required step — from the Notice of Default through the Notice of Trustee's Sale and eventually a public auction — and the property will be sold without the homeowner receiving any proceeds beyond what is owed. Once the sale is completed, the right to remain in the home ends and the former owner will need to vacate. Acting early almost always preserves more options than waiting. If you are uncertain what to do, contacting a HUD-approved housing counselor or a legal aid organization as soon as possible is a good starting point.