Pre-Foreclosure & Notice of Default FAQ

The past-due amount on your loan, including missed payments, late fees, and costs.

Under a deed of trust, the lender, or whoever now owns your loan.

You voluntarily sign the home over to the lender, and the lender releases the loan.

The document that secures most California home loans. It lets a neutral trustee sell the home without going to court if the loan isn't paid.

The gap between what you owe and what the home sells for.

What your home is worth minus everything you owe on it.

A temporary pause or reduction in your payments. The skipped amount still has to be paid back later.

A foreclosure that goes through a court case.

A permanent change to your loan's terms, such as the rate, the length, or the balance, to make payments affordable.

The lender's term for options that avoid foreclosure.

A foreclosure done with recorded and mailed notices, with no court case. This is how most California foreclosures happen.

In California, the recorded notice that officially starts a nonjudicial foreclosure. It says you're behind and what it takes to catch up.

The notice that sets the auction date.

The time after a default and before the home is sold at a foreclosure sale.

Paying everything past due, plus allowed fees and costs, to bring the loan current and end the foreclosure.

In some states, a right to buy the home back after a foreclosure sale. California does not give this right after a trustee sale.

The company you send your payments to. It can be different from the company that owns your loan.

Selling your home for less than you owe, with the lender's approval.

Money left over when a foreclosure sale brings in more than the debts on the property.

The neutral party named in the deed of trust who handles the notices and runs the sale.

The public auction of the home.

Under a deed of trust, you, the borrower.

It's the window between falling behind on your mortgage and a foreclosure sale. The home is still yours. You can still sell it, catch up, or work out a plan with your lender. The earlier you act, the more options you keep.

For a loan on your main home, federal rules say the servicer generally can't make the first foreclosure notice or filing until you're more than 120 days behind (12 CFR 1024.41). Before that, the servicer must try to reach you by phone by day 36 and send you a written notice about your options by day 45 (12 CFR 1024.39).

ATTOM reports that 367,460 U.S. properties had a foreclosure filing in 2025, up 14 percent from 2024. In the first half of 2026, filings were up 21 percent from a year earlier. The Mortgage Bankers Association reported that 4.37 percent of U.S. home loans were behind on payments in the second quarter of 2026.

A judicial foreclosure goes through a court, where you can raise defenses. A nonjudicial foreclosure uses recorded and mailed notices under a "power of sale" clause in your loan documents, with no court case. Which one applies depends on your state and your loan.

Nothing. Opening the mail, calling your servicer, and getting advice early protects your options. Ignoring the notices lets deadlines pass.

Many homeowners benefit from talking with a foreclosure or real estate attorney, especially when the sale date is close, bankruptcy is on the table, or something in the notices looks wrong. Kevin is not an attorney and can't give legal advice. He can share the names of attorneys he trusts.

It's the recorded document that starts a nonjudicial foreclosure (Civil Code 2924). It's recorded at the county recorder's office, and you should receive a copy by certified or registered mail, plus first-class mail, within 10 business days after it's recorded (Civil Code 2924b). It includes a notice explaining your right to catch up the loan.

Yes. The servicer generally must contact you, or make diligent efforts to, and then wait 30 days before recording the Notice of Default (Civil Code 2923.5 and 2923.55). You can ask for a meeting, which must be held within 14 days, and the servicer must give you the HUD housing counselor phone number.

Most California home loans use a deed of trust with a power of sale, which lets a trustee foreclose without a court case. Judicial foreclosure is possible in California, but it's much less common.

Yes. It's recorded with the county. That's why many homeowners start getting letters, calls, and visits from investors and companies offering help. Take your time, check licenses, and never sign anything under pressure.

It varies a lot by state and by case. Nationally, homes foreclosed in the second quarter of 2026 had been in the foreclosure process an average of 563 days, the lowest since 2013 (ATTOM, July 2026). Your timeline could be much shorter.

The home is sold at a public auction to the highest bidder. If no one bids enough, the lender usually takes the home back. That's called an REO, or bank-owned property.

The main steps are: the Notice of Default is recorded, at least 3 months pass, a Notice of Trustee's Sale is posted, published, recorded and mailed at least 20 days before the sale, and then the trustee sale happens (Civil Code 2924 and 2924f). That's a legal minimum of about 3 months and 20 days from Notice of Default to sale. The California Courts self-help guide says a nonjudicial foreclosure usually takes about 4 to 6 months, and postponements can stretch it much longer.

You can reinstate, meaning pay everything past due plus allowed fees and costs, from the time the Notice of Default is recorded until 5 business days before the sale date. If the sale is postponed more than 5 business days, the right comes back (Civil Code 2924c).

Yes. Sales can be postponed for reasons such as a court order, a bankruptcy filing, mutual agreement, or the trustee's decision. Postponements can add up to 365 days from the original sale date before a new notice of sale is required (Civil Code 2924g). For an owner-occupied home, when a sale is postponed 10 or more business days, the servicer must send you written notice of the new date within 5 business days (Civil Code 2924).

It can. Since January 1, 2025, if a listing agreement with a California-licensed real estate broker is delivered to the trustee at least 5 business days before the scheduled sale, the sale is postponed 45 days, one time. If you then have a signed purchase agreement at or above the total of all recorded liens, delivered at least 5 business days before the sale, the trustee must postpone at least 45 more days, also one time (Civil Code 2924f). A short sale contract below the liens doesn't qualify for the second postponement. The delivery rules are specific, so have an attorney confirm your situation.

For a first loan on a 1 to 4 unit home, the lender must give the trustee a fair market value estimate at least 10 days before the first sale date. At that first sale, the trustee can't sell for less than 67 percent of that value. If it doesn't sell, the sale is postponed at least 7 days, and then it can go to the highest bidder (Civil Code 2924f).

For 1 to 4 unit homes, the sale may not be final right away. A 45-day window lets certain eligible bidders, such as tenants and qualifying nonprofits, submit a higher bid (Civil Code 2924m). The rules for this window change on January 1, 2027. Once the new owner's title is final, a former owner who stays in the home can be served a 3-day notice to leave (Code of Civil Procedure 1161a).

No. California has no right of redemption after a nonjudicial trustee sale of a mortgage or deed of trust. Different rules apply to judicial foreclosures and to HOA foreclosures for unpaid assessments, which carry a 90-day redemption period (Civil Code 5715).

Your servicer, and a HUD-approved housing counselor. Foreclosure counseling from a HUD-approved agency is free. Call HUD at (800) 569-4287 to find one.

Yes, if you can pay the full past-due amount plus allowed fees. This is called reinstatement. Ask your servicer for a reinstatement quote in writing.

Part of the past-due amount is added to your regular payments for a set time until you're caught up. For FHA loans, a repayment plan can't run longer than 24 months.

Your payments are paused or lowered for a short time. The skipped amount still has to be repaid later, through a lump sum, a repayment plan, a deferral, or a modification.

A permanent change to your loan terms to make the payment affordable. For example, the Fannie Mae Flex Modification aims to lower the principal and interest payment by about 20 percent and can extend the loan term up to 40 years.

For FHA loans, past-due amounts can be moved into an interest-free second loan that you repay when you sell, refinance, or pay off the mortgage. All FHA partial claims together can't exceed 30 percent of the unpaid principal balance. For VA loans, a new VA Partial Claim program opened in June 2026. Some servicers may not offer it until late 2026.

Yes. Since October 1, 2025, FHA borrowers can generally get one permanent home retention option every 24 months, with exceptions for disasters (HUD Mortgagee Letter 2025-12).

Under federal rules, if a complete application arrives more than 37 days before a foreclosure sale, the servicer must evaluate you for all options within 30 days and can't hold the sale while the decision is pending. If your complete application arrives 90 or more days before a sale, you can appeal a loan modification denial within 14 days (12 CFR 1024.41). Servicers generally only have to follow these steps for one complete application, unless you've been current since the last one.

Filing for bankruptcy triggers an automatic stay that pauses most collection, including foreclosure (11 U.S.C. 362). Chapter 13 can let you catch up missed payments over 3 to 5 years. Chapter 7 pauses a foreclosure, but it doesn't remove the mortgage lien, so the lender can still foreclose later. Repeat filings have limits. Talk to a bankruptcy attorney.

Sometimes. You'd need to qualify for a new loan, which can be hard once payments are behind.

For an owner-occupied 1 to 4 unit home with a first loan, once you submit a complete first-lien modification application, the servicer can't record a Notice of Default or notice of sale, or hold the sale, while it's pending (Civil Code 2923.6). If you're denied, you have 30 days to appeal. This is part of the California Homeowner Bill of Rights. Smaller servicers follow a lighter version of these rules (Civil Code 2924.18).

Yes. When you ask about options to avoid foreclosure, the servicer must assign a single point of contact, a person or team who can work with you until your options are exhausted or your loan is current (Civil Code 2923.7).

While you're making payments under an approved trial or permanent modification, the servicer can't record a Notice of Default or notice of sale, or hold a sale (Civil Code 2924.11).

The California Mortgage Relief Program is no longer accepting applications. CalHFA's CalAssist Mortgage Fund helps some homeowners whose homes were destroyed or made uninhabitable by a California disaster; check eligibility with CalHFA. Homeowners affected by the January 2025 Los Angeles wildfires may qualify for up to 12 months of mortgage forbearance under a 2025 state law, and those protections expand on January 1, 2027.

The Los Angeles County Department of Consumer and Business Affairs offers free one-on-one foreclosure counseling for homeowners. Call (800) 593-8222.

Yes. The home is yours until the foreclosure sale. If you have equity, a sale pays off your loan, and you keep what's left after the loan and sale costs. Selling can also limit damage to your credit.

A sale for less than you owe, with your lender's approval. Depending on your loan, you may be eligible for relocation help. Fannie Mae may offer up to $7,500, and FHA offers up to $3,000 for owner-occupants.

You voluntarily sign the home over to your lender, and the lender releases the loan. Relocation help may be available here too, depending on your loan.

An offer of money to leave the home by a set date in good condition. For FHA loans, after a foreclosure, the servicer may offer up to $3,000 if occupants leave within 30 days and leave the home broom-swept. For other loans it's negotiated.

It can work, and it's often fast. Get the offer in writing, compare it to what your home could bring on the open market, and have someone you trust review it before you sign. Never sign over your deed before you understand the deal.

Waiting shrinks your options. A home sold at auction can sell for less than it would on the open market, and your equity goes with it.

For a 1 to 4 unit home, if a lender agrees in writing to a short sale and the sale closes as agreed, that lender can't pursue you for the remaining balance. This includes a consenting second lender or HELOC (Code of Civil Procedure 580e). It doesn't apply when the borrower is a corporation, LLC, or limited partnership.

After a nonjudicial trustee sale, the lender that foreclosed can't get a deficiency judgment (Code of Civil Procedure 580d). Purchase-money loans on an owner-occupied 1 to 4 unit home are also protected (Code of Civil Procedure 580b). A second loan or HELOC that wasn't used to buy the home, and that gets wiped out by the first lender's foreclosure, may still be able to sue on its note. Talk to an attorney.

If you live in the home and a Notice of Default has been recorded, a buyer who won't live there is an "equity purchaser" under the Home Equity Sales Contract Act (Civil Code 1695). The contract must be in writing with specific notices. You can cancel until midnight of the 5th business day after you sign, or 8 a.m. on the day of the sale, whichever comes first. During that time the buyer can't ask you to sign a deed. A deal that takes unfair advantage of you can be undone within 2 years.

If a trustee sale brings in more than is owed, the money pays sale costs, the foreclosing loan, and other liens in order, and anything left goes to you (Civil Code 2924k). The trustee mails a notice within 30 days after the sale deed, and claims are due within 30 days after that notice is mailed (Civil Code 2924j). Keep your mailing address current with the trustee. By law, no one can contact you to solicit a surplus funds claim until 90 days after the trustee's deed is recorded (Civil Code 2924.21). You can file a claim yourself.

Watch for these red flags:

• Asking for fees before doing anything
• Asking for payment by wire, cashier's check, or a payment app
• Asking you to sign over your deed
• Telling you not to talk to your lender, an attorney, or a counselor
• Telling you to send your mortgage payments to them instead of your lender
• A "guarantee" to stop your foreclosure
• A plan where you sign over the home and rent it back

Generally, no. A federal rule bars mortgage relief companies from collecting fees until you've signed a written agreement with your lender that includes the lender's offer. They also can't tell you to stop contacting your lender (12 CFR 1015).

No. HUD-approved housing counselors help for free. Call (800) 569-4287.

Once a Notice of Default is recorded on an owner-occupied 1 to 4 unit home, anyone paid to "save" your home, stop or postpone a sale, or get you more time is generally a foreclosure consultant under the Mortgage Foreclosure Consultants Act (Civil Code 2945). A foreclosure consultant can't collect any payment until every promised service is fully performed, must give you a written contract with a 5-business-day right to cancel, must register with the California Department of Justice and carry a $100,000 bond, and can't take any interest in your home or a power of attorney. Attorneys and licensed real estate agents working within their licenses are exempt.

No. California law bars anyone, including real estate licensees and attorneys, from collecting fees for a loan modification or forbearance until every promised service is fully performed (Civil Code 2944.7).

The California Department of Real Estate (for licensed agents and brokers), the California Department of Financial Protection and Innovation, and the California Attorney General's office.

Possibly. Canceled debt is generally taxable, and your lender may send you a Form 1099-C. The federal exclusion for forgiven mortgage debt on a main home ended for debt forgiven after December 31, 2025, unless a written agreement was made before then (IRS Publication 4681). Other exclusions, such as insolvency or bankruptcy, may still apply. Talk to a CPA or tax professional.

Generally 7 years.

General guidelines, which lenders apply case by case:

• Fannie Mae conventional: 7 years after a foreclosure (3 with extenuating circumstances). 4 years after a short sale or deed in lieu (2 with extenuating circumstances).
• FHA: 3 years after a foreclosure. Generally 3 years after a short sale or deed in lieu.
• VA: Generally 2 years after a foreclosure. It can be shorter after a short sale or deed in lieu.

Often, yes. For conventional Fannie Mae loans, the waiting period after a short sale or deed in lieu is generally 4 years, compared to 7 years after a foreclosure.

Generally, yes. California does not currently follow the federal exclusion, so mortgage debt forgiven in 2026 is generally taxable for California purposes, with exceptions such as insolvency or bankruptcy. Talk to a CPA or tax professional.

Under the federal Protecting Tenants at Foreclosure Act, you generally get at least 90 days' notice before you must move. If you have a genuine lease, you can usually stay until it ends, unless the new owner will live in the home.

Yes. Under the Servicemembers Civil Relief Act, a foreclosure sale during military service, or within 1 year after it ends, generally isn't valid without a court order or a valid waiver. This applies to mortgages taken out before military service (50 U.S.C. 3953).

Often, yes. Under federal rules, a confirmed successor in interest, such as an heir, is treated as a borrower for most mortgage servicing protections (12 CFR 1024.30). Kevin is a Certified Probate Expert and can connect you with a probate attorney.

When a notice of sale is posted on a rental, a notice to tenants is posted and mailed too (Civil Code 2924.8). After a foreclosure sale, month-to-month tenants generally get 90 days' written notice, and fixed-term leases are generally honored to the end of the term, with some exceptions (Code of Civil Procedure 1161b). Local tenant protection laws may give you more protection.

Yes. HOA foreclosures for unpaid assessments have their own California rules, including a 90-day right of redemption after the sale (Civil Code 5715). Talk to an attorney right away.

Kevin offers a free, confidential options review. He'll look at your home's value and what you owe, lay out your selling options, list and market your home or handle a short sale with your lender's approval, keep your deadlines on track, and connect you with attorneys, HUD-approved counselors, and tax professionals.

No. Kevin is a licensed California real estate agent (DRE 01958725). He doesn't give legal or tax advice, and he'll always point you to an attorney or tax professional for those questions.

The options review is free. Kevin never charges upfront fees. If you list your home with him, he's paid a commission when the sale closes, the same way any listing agent is paid.

Your Notice of Default and any Notice of Trustee's Sale, your latest mortgage statements, any letters from your servicer, a list of every loan or lien on the home, and HOA information if you have one.

Kevin serves the South Bay of Los Angeles, including Manhattan Beach, Hermosa Beach, Redondo Beach, El Segundo, Torrance, and the Palos Verdes Peninsula. If your home is somewhere else, call anyway. He'll help you find the right person.