Behind on Payments in California: Your Timeline Before the Sale

The phone calls start, then the letters, and at some point somebody uses the word foreclosure and the whole thing stops feeling like a sequence of dates and starts feeling like a countdown to something you cannot see. That is the worst version of this, because the actual process is slower than people fear and has more handholds in it than almost anybody tells you.

So here is the clock, with the code sections, and the two deadlines that matter more than everything else. Then where in Los Angeles this physically happens, who will help you for free, and the laws that govern people like us — because the single most useful thing we can tell a homeowner in default is how to recognise which of the people now calling them is a predator.

One thing to say at the top. We are a cash buyer. We are not going to tell you we can stop a foreclosure. A completed sale pays the loan off, and sometimes that is the right answer, but the promise itself — "we'll stop your foreclosure," "we'll save your credit," "we'll negotiate with your lender" — is what California calls foreclosure consulting, and a buyer who makes it is barred from acquiring any interest in your house at all under Civil Code § 2945.4(e). More on that below, because knowing it is how you sort the honest buyers from the rest.

The clock, step by step

Months one to four: the federal waiting period

Before anything is recorded, there is a federal floor. Under 12 C.F.R. § 1024.41(f)(1), a mortgage servicer generally may not make the first notice or filing required for foreclosure until a borrower is more than 120 days delinquent. That is roughly four missed payments before the formal process can even begin.

This is the single most commonly confused number in the subject. The "120 days" you have read about is federal, and it runs before the California clock starts — not inside it. They stack.

Then: the contact requirement, and 30 more days

California requires the servicer to try to reach you before it records anything. Which statute applies depends on how big your servicer is, and nearly every article on this subject gets it backwards:

• Civil Code § 2923.55 governs ordinary servicers — the large ones most people have. (§ 2923.55(g): "This section shall not apply to entities described in subdivision (b) of Section 2924.18.")
• Civil Code § 2923.5 is the small-servicer version. (§ 2923.5(g): "This section shall apply only to entities described in subdivision (b) of Section 2924.18.") A § 2924.18(b) entity is one that foreclosed on 175 or fewer California residential properties of four or fewer units in the preceding annual reporting period, or that services seven or fewer such loans.

Either way the shape is the same. The servicer must contact you in person or by telephone to assess your financial situation and explore options to avoid foreclosure, then wait 30 days before recording a notice of default. If it cannot reach you, it must satisfy a due-diligence sequence first: a first-class letter including HUD's toll-free counselor number, then at least three telephone attempts at different hours on different days, then — if there is no response within two weeks — a certified letter, return receipt requested. The notice of default itself has to carry a declaration that the servicer did this.

Two levers in here that are worth using:

• Ask for the documents. Under § 2923.55(b)(1)(B) the written material a servicer must send states that you may request a copy of the promissory note, the deed of trust or mortgage, any assignment required to demonstrate the right to foreclose, and your payment history since you were last less than 60 days past due. That last one is how you check the arrears figure rather than accepting it.
• Ask for a second meeting. If you request one, it must be scheduled within 14 days.

The notice of default: three months on the clock

Now a document gets recorded against your property. From there:

• § 2924(a)(2): "Not less than three months shall elapse from the filing of the notice of default."
• § 2924b(b)(1): a copy has to be mailed to you — registered or certified, plus an identical first-class copy — within 10 business days of recording.
• § 2924b(c)(1): subordinate lienholders get theirs within one month.

The notice of sale: 20 days, four ways

Once the three months are up, the notice of sale can issue. Every core deadline in § 2924f(b) is 20 days, and there is no 14-day requirement anywhere in it despite how often that figure circulates:

• Posted in one public place in the city, at least 20 days before the sale
• Published in a newspaper of general circulation, once a week for three consecutive calendar weeks, first publication at least 20 days before
• Posted on the property itself — on a door, where possible, for a single-family residence — at least 20 days before
• Recorded with the county recorder at least 20 days before
• Mailed to you at least 20 days before (that one is § 2924b(b)(2), not § 2924f)

And § 2924(a)(4) sets the outer bound: the sale date must be no earlier than three months and 20 days after the notice of default was recorded, with the notice of sale recordable up to five days before the three-month period ends.

So what is the total?

Because "three months" is calendar months, the statutory floor from notice of default to sale works out to roughly 110 to 112 days depending on the start date. A notice recorded January 1 produces a sale no earlier than April 21. The commonly quoted "111 days" is an average, not a fixed figure — say three months and 20 days and you will always be right.

Stack it all up and the bare minimum from your first missed payment to a trustee's sale is something like 120 days federal + 30 days contact + 111 days ≈ eight and a half months. In practice it runs longer, because servicers are slow, loss mitigation pauses the process, and the postponement rights below are available to you on demand. We are not going to print a "California average days to foreclose" figure, because we could not find a current sourced one and inventing one would be worse than useless.

The two dates that matter most

Everything above is background. These two are the ones to write on a calendar.

1. Reinstatement — until five business days before the sale

Under § 2924c(e), your right to reinstate runs from the recording of the notice of default "until five business days prior to the date of sale set forth in the initial recorded notice of sale."

Reinstating means paying the amounts in default — the missed payments plus permitted costs and fees — not the whole loan balance. On cure, § 2924c(a)(1) provides that the proceedings are dismissed and the obligation is reinstated and remains in force. The beneficiary then has 21 days to deliver a notice of rescission to the trustee, who records it within 30 days.

Two details that matter enormously:

• The right revives on a postponement. If the sale is postponed more than five business days, § 2924c(e) revives the reinstatement right as of the date of postponement and runs it again until five business days before the new date. A postponed sale is a second chance at reinstatement, and almost nobody knows that.
• The clock runs off the initial recorded notice of sale. Find that document and count from the date on it.

What they are allowed to charge you to reinstate

This is where people get taken, so here are the actual caps.

Costs — § 2924c(c) limits recoverable costs to: recording, mailing (including certified and express mail charges), publishing and posting the required notices; recording a notice of rescission; a trustee's sale guarantee or litigation guarantee; and postponements, "not to exceed one hundred dollars ($100) per postponement."

Trustee's and attorney's fees — § 2924c(d)(1) caps them on a sliding scale, measured against the unpaid principal as of the date the notice of default was recorded. Fees within these amounts are presumed lawful:

Unpaid principal	Fee cap
$50,000 or less	$350
Over $50,000 to $150,000	$350 + 0.5% of the amount over $50,000
Over $150,000 to $500,000	$300 + 0.5% of $50,000–$150,000 + 0.25% of the amount over $150,000
Over $500,000	$300 + 0.5% of $50,000–$150,000 + 0.25% of $150,000–$500,000 + 0.125% of the amount over $500,000

Notice the base drops from $350 to $300 above $150,000 — that is genuinely what the statute says, and it is why this table is worth checking rather than assuming. Worked example on a $600,000 principal balance: $300 + $500 + $875 + $125 = about $1,800. That is our arithmetic off the code, not a quoted figure.

One warning. There are websites reproducing an older version of § 2924c with a $300/$250 base and a $50 postponement cap. Those figures are stale. If a payoff or reinstatement quote cites them, somebody is working from a document that is years out of date — which is worth knowing about the rest of their numbers too.

2. Payoff — right up to the sale

After the reinstatement window closes, the arrears-only option is gone. What remains is paying the whole thing. The statutory warning language in § 2924c(b)(1) puts it plainly: after that period expires, "you have only the legal right to stop the sale of your property by paying the entire amount demanded by your creditor."

That is the window a sale lives in. A closing that pays the loan off in full can happen up to the hammer falling — which is exactly why the next section matters so much.

The 2025 law almost nobody has told you about

AB 2424 (Chapter 311, Statutes of 2024) took effect January 1, 2025 and is the most consequential thing to happen to California homeowners in default since the Homeowner Bill of Rights. It added subdivisions (e) and (f) to Civil Code § 2924f. If you have equity in the house and you are trying to sell your way out rather than lose it at auction, this is your lever.

Ninety extra days, in two bites of forty-five

It applies to residential property with no more than four dwelling units, under a power of sale in any deed of trust — any lien position, any loan type.

§ 2924f(e)(1) — the listing postponement. If the trustee receives, at least five business days before the scheduled sale, a listing agreement with a California-licensed real estate broker, and the listing goes onto a publicly available marketing platform at least five business days before the sale, the sale "shall not be conducted until the expiration of an additional 45 days." It has to be delivered by certified mail or a tracked overnight courier that confirms signature and receipt. Usable once.

§ 2924f(e)(3) — the purchase-agreement postponement. If the sale was already postponed under (e)(1) and the trustee then receives a purchase agreement at least five business days before the new date, by the same delivery methods, the trustee must reset the sale to at least 45 days after receipt. The agreement must be bona fide and fully executed, at a price at least the total unpaid balance of all recorded obligations secured by the property, and must state the buyer's name, the sales price and the agreed closing date, and be accepted by a designated escrow agent. Also usable once.

That is up to 90 additional days, on top of everything else, available to you by sending paperwork. And remember the interaction with § 2924c(e): a postponement of more than five business days revives your reinstatement right.

Two practical cautions. First, it goes to the trustee — the company named on your notice of default, not your servicer — and the statute contemplates the trustor sending it. Practitioners report trustees rejecting submissions tendered by a real estate agent rather than by the homeowner, so send it yourself, by a method that produces a signed receipt, and keep the tracking. Second, count the five business days carefully and do not leave it to the last day.

The 67% floor — real, but read the fine print

§ 2924f(f) applies to first-lien deeds of trust on residential property of no more than four units. The mortgagee, beneficiary or authorized agent must give the trustee a fair market value figure at least 10 days before the initially scheduled sale, estimated within the preceding six months from a licensed broker's opinion, a licensed appraiser, or a commercially used automated valuation model. At the first sale at which a bid can be made, the trustee may not sell for less than 67% of that value. If it does not sell, the trustee must postpone at least seven days, after which it can go to the highest bidder with no minimum. (AB 1521 in 2025 tightened the trigger to "the first sale at which a bid can be made," closing a gap in the original wording.)

Now the honest part, because you will not read this anywhere else: § 2924f(f)(4) says a failure to comply does not affect the validity of the trustee's sale or a sale to a bona fide purchaser for value. So the floor shapes how the auction runs; it is not a remedy you can use to undo a sale afterwards. Useful, not a safety net.

Also note that § 2924f carries a sunset: subdivision (g) says it "shall remain in effect only until January 1, 2031."

And a quietly brilliant small provision

AB 2424 also amended §§ 2923.5 and 2923.55 so that a servicer must tell you that a third party — a family member, a HUD-certified housing counselor, or an attorney — can record a request to receive copies of your notice of default and notice of sale under § 2924b. If you are elderly, overwhelmed, or the family member handling this lives out of state, that one paragraph solves the most common failure in the whole process: nobody opened the envelope.

While an application is pending, they cannot foreclose

The Homeowner Bill of Rights is alive and has no sunset. The original version expired January 1, 2018, but SB 818 (Chapter 404, Statutes of 2018) re-enacted it without one. These provisions apply, per § 2924.15, to a first lien mortgage or deed of trust on owner-occupied residential property of no more than four units taken out for personal, family or household purposes. (SB 1146 in 2024 removed the tenant-occupied category, so a rental you do not live in is outside these particular protections now.)

§ 2923.6(c) — no dual tracking. If you submit a complete application for a first-lien loan modification at least five business days before a scheduled sale, the servicer may not record a notice of default, record a notice of sale, or conduct a trustee's sale while it is pending. That bar lifts only when the servicer determines in writing that you are ineligible and any appeal period has run; or you do not accept an offered modification within 14 days; or you accept and then default on it. After a written denial you get at least 30 days to appeal, and no sale may happen until at least 31 days after the denial notice.

The denial notice itself has to tell you why, including the appeal deadline and instructions, and — this is the useful bit — the gross monthly income and property value the servicer used in any net present value calculation, plus notice that you may request all the NPV inputs. If the denial rests on a wrong income figure, that is how you find out.

§ 2923.7 — single point of contact. On request, the servicer must promptly assign you a single point of contact with direct means of communication, who has current information, can tell you what is missing from your file, and has access to people with the ability to stop foreclosure proceedings. It stays assigned until all loss mitigation options are exhausted or the account is current. You can demand a supervisor.

§ 2924.11 covers alternatives already approved in writing: no notice of default, no notice of sale and no sale while you are complying with a written trial or permanent modification, forbearance or repayment plan. It also bars any application or processing fee for a first-lien modification, bars late fees while a complete application is under consideration or under appeal, and requires a subsequent servicer to honour a previously approved modification.

§ 2924.10: the servicer must acknowledge a complete application within five business days and tell you the expected decision timeframe, the deadlines, any document expiration dates, and any deficiencies.

§ 2924.12 — what you can do about a violation. Before a trustee's deed upon sale is recorded, you may seek an injunction against a material violation. After the deed records, you may recover actual economic damages, and where the court finds the violation intentional, reckless or wilful misconduct, the greater of treble actual damages or $50,000, plus discretionary attorney's fees. But read the limit honestly: there is no liability for a violation corrected and remedied before the trustee's deed is recorded, and a violation does not affect a sale to a bona fide purchaser. That safe harbour is what defeats most of these claims in practice, which is why acting before the sale is worth so much more than acting after.

If your servicer is a small one under § 2924.18(b), the parallel rule is § 2924.18(a)(1) — a complete first-lien modification application submitted at least five business days before a scheduled sale stops the process until a written determination issues — and the remedy section is § 2924.19.

Where this physically happens in Los Angeles

This is the part no national article will tell you, and some of it is genuinely surprising.

You cannot look up your own notice of default online

Notices of default and notices of sale are recorded with the Los Angeles County Registrar-Recorder/County Clerk. The main office is at 12400 Imperial Highway, Norwalk, and there is a Valley branch that records documents at 14340 West Sylvan Street, Van Nuys — though the Van Nuys branch only holds copies from 1982 forward, so anything older means Norwalk. The general line is (800) 201-8999.

Here is the surprise: the RR/CC states that it does not provide online access to real estate records or indexes, citing Government Code § 6254.21. There is no free online grantor/grantee search for Los Angeles County. Advice to "just check your county recorder's website" is simply wrong here. You request a copy in person, by mail, or through an online request form — and the fees are a certified copy at $6 for the first page and $3 for each additional, a plain copy at $5 and $3, plus a search fee of $0.50 per name per year, $1 minimum.

So sign up to be told instead

Los Angeles County runs a Homeowner Notification Program that mails you copies of documents recorded against your home, including a notice of default and a notice of sale, along with grant deeds, quitclaim deeds and deeds of trust. It is run by the Department of Consumer and Business Affairs with the Registrar-Recorder. The number is (800) 593-8222 and the email is homehelp@dcba.lacounty.gov; email alerts run through the Assessor's e-Notification portal.

The county's own pages are not entirely consistent about whether the mailed notices are automatic or require enrolment, so call and sign up rather than assuming. If you are an out-of-state heir or you are handling a parent's house, this is a ten-minute phone call that prevents the most common disaster in this whole subject.

Your Van Nuys house gets auctioned in Pomona

Every 2026 Los Angeles County trustee's sale notice we could read uses the same place: 400 Civic Center Plaza, Pomona — variously described as "behind the fountain," "in the courtyard," "by the fountain." That is roughly 40 miles east of Van Nuys. The sale is not held in the Valley and not downtown.

Two things follow. One: the commonly repeated older location — the Vineyard Ballroom at the Doubletree in Norwalk — does not appear in current notices, so do not plan around it; read the location off your own notice of sale. Two: California does not hold online trustee auctions. Civil Code § 2924g(a) requires a public auction in the county where the property is located, between 9:00 a.m. and 5:00 p.m., Monday through Friday, at the time and place specified in the notice of sale. The websites with "auction" in the name that appear on these notices — servicelinkauction.com, stoxposting.com, Nationwide Posting — are sale-information and posting services, not the auction itself. Genuine online auctions exist for bank-owned property after a foreclosure, which is a different thing entirely.

Postponements, and how you find out

Sales get postponed constantly. The rules:

• § 2924g(c)(1): there is no limit on the number of postponements. The "three postponements" rule people cite does not exist. The only cap is an aggregate 365 days from the date in the notice of sale; past that, a brand-new notice of sale under § 2924f is required.
• § 2924g(d)(1): each postponement and its reason must be announced by public declaration at the time and place last set for the sale, stating the new date, time and place — which must be the same place originally fixed. "No other notice of postponement need be given."
• § 2924(a)(5): but where a sale is postponed at least 10 business days, the servicer must give you written notice of the new date and time within five business days of the postponement.
• § 2924g(d)(1) also provides that where the postponement was caused by litigation, the sale may not occur sooner than the seventh day after dismissal or the expiration of the injunction, restraining order or stay.

A different clock people confuse with this one: property taxes

Unpaid property taxes are a separate process from your mortgage, run by the Los Angeles County Treasurer and Tax Collector, and it is dramatically slower. The figures are exact and almost nobody states them correctly:

• First instalment due November 1, delinquent after close of business December 10. Second due February 1, delinquent after April 10. A 10% penalty on each missed instalment, plus a $10 cost on the second.
• Still unpaid as of June 30 and the taxes become defaulted on July 1: a $15 redemption fee plus a redemption penalty of 1.5% of the base tax per month. (You will see this quoted as "18% a year." The county's own wording is 1.5% per month on the base tax, which is the more accurate way to hold it.)
• The tax collector's power to sell attaches after five years or more of defaulted taxes for residential or agricultural property — three years for non-residential commercial property or vacant land. That three-versus-five split is the detail national content always misses.
• The county's auction is genuinely online, through GovEase. The 2026A sale ran April 18–21, 2026. The minimum bid is not less than the amount needed to redeem plus costs, and the current owner cannot buy their own property below that minimum.

And there is a payment plan. The Installment Plan of Redemption — the "Five-Pay Plan" — takes a minimum of 20% of the total redemption amount down plus a $75 fee, then at least 20% a year plus interest plus that year's current taxes, with an annual deadline of April 10. The 1.5% monthly penalty keeps accruing on the unpaid balance. Opening the plan prevents sale at public auction. Miss a payment or a current-year tax bill by April 10 and the plan defaults; your prior payments convert to partial payments and cannot be credited to a new plan, and you cannot open a new one until July 1 of the following fiscal year. You have to start the plan before the fifth year after the default date for residential property, and before the property becomes subject to the power to sell.

The counter is at 225 North Hill Street, Los Angeles — the Five-Pay Plan application directs you to Room 109 — and the automated property tax line runs 24 hours at (888) 807-2111. One clean contrast worth noting: property tax status in Los Angeles County is free to check online at propertytax.lacounty.gov, even though recorded documents are not.

Free help, and the Valley gap

Before you talk to anyone trying to buy or sell you something, talk to someone who is paid to be on your side. All of this is free.

The gap first, so you are not surprised

There is no HUD-approved housing counselling agency with an office in the San Fernando Valley. We checked HUD's own counsellor search and the Consumer Financial Protection Bureau's mirror of the same data for Valley ZIP codes, and the nearest agency is about 11.5 miles away. Every result is in the city proper. That is not a reason to skip it — counselling is largely done by phone — but it is a reason not to go looking for a storefront nearby.

Agencies that serve Los Angeles and do mortgage delinquency and default resolution counselling include Los Angeles Neighborhood Housing Services (3926 Wilshire Blvd., Suite 200, 213-381-2862, which also runs a free foreclosure prevention workshop in English and Spanish), New Economics for Women (303 S. Loma Dr., 213-483-2060), the Shalom Center for T.R.E.E. of Life (2975 Wilshire Blvd., 213-380-3700), and West Angeles CDC (6028 Crenshaw Blvd., 323-751-3440). HUD's own referral line is (800) 569-4287, and the HOPE Hotline — (888) 995-HOPE — is still operating.

The best county-level resource, and the City of LA answer

Los Angeles County's Department of Consumer and Business Affairs runs free one-on-one foreclosure prevention counselling, by phone or in person by appointment, for homeowners and landlords with 15 or fewer units in the county. Counsellors explain the process, help you explore options, help you communicate with your lender, review and submit your documentation, and help you avoid scammers. (800) 593-8222, homehelp@dcba.lacounty.gov.

For legal help in the Valley specifically, Neighborhood Legal Services of Los Angeles County has an office at 13327 Van Nuys Blvd., Pacoima, with intake at (800) 433-6251; its housing work covers preventing foreclosures as well as evictions.

And a true thing that is worth saying because no competitor says it: the City of Los Angeles does not operate a foreclosure prevention program. The Los Angeles Housing Department's homeowner side is purchase assistance and home repair for low-income seniors and people with disabilities. The County is the one with the counselling service.

Two state programs — one dead, one alive and narrow

The California Mortgage Relief Program is closed. Its own website now reads "No Longer Accepting Applications" and states that the program is no longer offering grants; it redirects homeowners to the CFPB's counsellor directory. Almost every "California foreclosure help" page still lists it as open with a hotline. It is gone, and this is the single most common piece of stale advice in the subject.

The CalAssist Mortgage Fund is open — but it is a disaster program. As of this writing its site says applications close November 2, 2026. It pays up to one year of mortgage payments, up to roughly $100,000, directly to your servicer, never repaid, and it now covers homeowners who are current, in forbearance, or behind. The catch is eligibility: your primary residence must have been destroyed or severely damaged and deemed uninhabitable by a qualified disaster occurring between January 1, 2023 and January 8, 2025 — the 2025 Los Angeles firestorms and the Park Fire among them. The phone number is (800) 501-0019.

Which means: if your default came from a job loss, a divorce, an illness, a rate reset or a death in the family rather than a declared disaster, you do not qualify. We are saying that plainly because the alternative is you spending a week finding out.

The scams — and the laws that govern people like us

Homeowners in default are the most heavily targeted group in California real estate, and the state has three separate statutory schemes aimed at the people who target them. Two of them regulate the rescuers. The third regulates us, and we would rather you knew it cold.

Nobody can charge you an advance fee for foreclosure or modification help

Civil Code § 2944.7 makes it unlawful for anyone who negotiates, arranges, or offers to perform a mortgage loan modification or forbearance for compensation to claim, demand, charge, collect or receive any compensation until after they have fully performed each and every service they contracted or represented they would perform. Also: no wage assignment, no lien on your property as security for their fee, and no power of attorney from you for any purpose.

Penalties: up to $10,000 and a year in county jail for a natural person, up to $50,000 for a business entity, plus a civil penalty of up to $20,000 per violation recoverable by the Attorney General or a district attorney, and an additional $2,500 per violation under § 2944.8 where the victim is 65 or older or disabled. It applies to any residential mortgage of four or fewer units — no recorded notice of default required — and there is a four-year limitation period under § 2944.10.

This ban has been continuously in force since 2009. It was given a sunset when it was enacted, then extended, then the sunset was removed entirely. If anyone tells you the advance-fee rule lapsed, they are wrong.

"Foreclosure consultants" have to be registered and bonded

Under Civil Code §§ 2945 et seq., a foreclosure consultant is anyone who, for compensation, offers to stop or postpone your foreclosure sale, obtain a forbearance, help you reinstate or extend the reinstatement period, obtain a waiver of an acceleration clause, help you obtain a loan, avoid or lessen the damage to your credit, save your residence from foreclosure, or help you recover the surplus proceeds after a sale. The trigger is the same as the Home Equity Sales Contract Act below: one to four units, owner-occupied as a principal residence, with a recorded notice of default.

Such a person must hold a Certificate of Registration as a Mortgage Foreclosure Consultant from the California Department of Justice and maintain a $100,000 surety bond filed with the Secretary of State. Operating without it carries a fine of not less than $1,000 and not more than $25,000, up to a year in county jail, or both — per violation.

So: ask to see the certificate and proof of the bond. We could not find a public searchable registry, so the practical version is to ask for the documents and to contact the Attorney General's office if you want to verify. A registered consultant is also required to have filed all of their print and electronic advertising, promotional material and telephone scripts with the Department of Justice, which is a useful thing to mention to someone who is pressuring you.

Three absolute prohibitions worth memorising, all in § 2945.4: no compensation until every promised service is fully performed; no power of attorney from you, for any purpose; and no agreement, at any time, in any form, to help you recover surplus funds after the trustee's sale — by direct payment, assignment, deed, power of attorney or anything else. A surplus-funds recovery pitch in California is unlawful unless the person making it is your own attorney. Violations carry mandatory treble damages under § 2945.6 and criminal exposure under § 2945.7.

And the statute that governs us: Civil Code §§ 1695 et seq.

Once a notice of default has been recorded against a one-to-four-unit home that the owner occupies as a principal residence, the property is a "residence in foreclosure" and anyone buying it who is not moving in themselves is an equity purchaser under the Home Equity Sales Contract Act. That is us. Here is what it requires of us, so you can hold any buyer — including us — to it:

• The contract must be in writing, in letters equal to 10-point bold type, in the same language principally used to negotiate the sale, completed and signed by both parties before any deed is executed (§ 1695.2). If the conversation happened in Spanish, the contract has to be in Spanish.
• It must contain nine specified terms (§ 1695.3), including the buyer's name, business address and telephone number, the total consideration, a complete description of the payment terms and any service of any nature the buyer represents they will perform, when possession transfers, and the terms of any rental agreement. An oral promise — "you can stay 30 days," "we'll cover your movers" — that is not on the paper is a violation.
• A notice in at least 14-point boldface must appear immediately above the cancellation statement that sits beside your signature, stating that until your right to cancel has ended, the buyer or anyone working for them cannot ask you to sign a deed or any other document (§ 1695.3(h)).
• You get a right to cancel until midnight of the fifth business day after you sign a complying contract, or until 8 a.m. on the day scheduled for the trustee's sale, whichever comes first (§ 1695.4(a)). Note that it is 8 a.m. on the day of the sale, not the day before — a great deal of published content gets this wrong.
• "Business day" excludes Sunday and nine named holidays. Saturday counts (§ 1695.1(d)). This is the most commonly mis-stated detail in the industry.
• Until that cancellation period has fully elapsed, § 1695.6(b) bars the buyer from taking a deed from you, recording anything you signed, transferring or encumbering any interest in the property, or paying you any consideration at all. No deposit, no earnest money, no moving allowance, nothing. If a buyer offers you cash on the spot to lock the deal, they are describing a violation.
• The buyer cannot make untrue or misleading statements about the value of your house, the amount of proceeds you would receive after a foreclosure sale, any contract term, your rights or obligations, or the nature of any document they ask you to sign (§ 1695.6(d)).
• Any waiver of the chapter is void as against public policy (§ 1695.10). No "as-is" clause, no release, no acknowledgment paragraph can sign these away.
• Anyone who solicits you to transfer title is a "representative" who must give you written proof of a current California real estate salesperson licence and of a bond from an admitted surety insurer for twice the fair market value of your house, plus a written statement under penalty of perjury, before any interest transfers (§§ 1695.15, 1695.17). Failure makes the contract void at your option, plus damages. On a $700,000 Valley house that is a $1.4 million bond, which is why the compliant answer is usually that the buyer does his own talking.

The teeth: § 1695.7 gives you actual damages plus mandatory attorney's fees and costs, and exemplary damages of not less than three times your actual damages for a violation of § 1695.6(b)(3) or § 1695.13, with four years to sue. § 1695.8 makes a violation of any subdivision of § 1695.6 criminal — up to $25,000 and up to a year in county jail, or a state prison term under Penal Code § 1170(h), per violation. § 1695.13 makes it unlawful for any person to initiate, negotiate or consummate a transaction involving a residence in foreclosure if they take "unconscionable advantage" of the owner, and § 1695.14 lets you rescind such a transaction within two years of the conveyance being recorded.

The structure to refuse outright

If anyone proposes that you deed them the house and rent it back with an option to buy it later, stop. Civil Code § 1695.12 creates a presumption, rebuttable only by clear and convincing evidence, that such a transaction is a loan and the apparent deed is a mortgage. The Department of Real Estate's own foreclosure relief materials flag the same structure, noting that the terms of these rent-to-buy arrangements "usually make that impossible." The California Attorney General warns not to transfer title to a "foreclosure rescuer" who may later evict you. The Department of Financial Protection and Innovation warns that transferring title does not relieve you of the mortgage payments — you lose the house and still owe the loan.

The DRE's red flags, in its own order: makes guarantees; requires a fee in advance; advises you to stop paying or stop talking to your mortgage company; asks you to sign documents you do not understand, or to sign over the deed; engages in a hard sell.

What you owe after a trustee's sale

Three things people get wrong, and one that changed this year.

No deficiency. Under Code of Civil Procedure § 580d, where property has been sold under the power of sale in a deed of trust, "no deficiency shall be owed or collected" and no deficiency judgment may be rendered on the secured note. That turns on the method of foreclosure, not the kind of loan, so it covers purchase-money and refinanced and cash-out loans alike. § 580b is a second, independent shield for purchase-money loans on owner-occupied dwellings of up to four units — and since January 1, 2013 it extends to refinances of a purchase-money loan, except as to new principal advanced that was not applied to the original loan or the transaction costs.

But the second lien is a real exposure. A junior lienholder whose security is wiped out by the senior's trustee's sale did not sell under its own power of sale, so § 580d does not bar it — a "sold-out junior" can sue you on the note as an unsecured creditor. A purchase-money second (a seller carryback, or an 80/20 purchase-money second on a house you occupy) is protected by § 580b. A HELOC or cash-out second taken out after you bought the house, for anything other than the purchase price, is not. If your Valley house has a 2006-vintage second on it, that is the single most important sentence on this page for you, and it is a question for a lawyer rather than a blog post.

There is no right of redemption after a trustee's sale. California gives none — that exists in judicial foreclosure, which is rare. What does exist is § 2924m, which keeps the sale non-final for 15 to 45 days so that an eligible tenant buyer or certain mission-driven and owner-occupant bidders can displace the auction winner. Title stays with you until the sale is final (§ 2924m(f)), and your hazard insurance is not terminated while finality is pending. But you cannot use it yourself — the borrower and close relatives are expressly excluded. It is not redemption and anyone describing it to you as a way to get your house back is wrong. (Note also that AB 1957, signed September 2026, substantially rewrites § 2924m operative January 1, 2027.)

Surplus proceeds are yours. If the sale brings more than what was owed, the excess belongs to you after junior lienholders are paid. Keep your current mailing address with the trustee. And remember § 2945.4(h): nobody may contract with you to recover those funds except your own attorney.

The tax change that happened this year and is barely reported

This is time-sensitive and most published content on it is now wrong.

The federal qualified principal residence indebtedness exclusion under IRC § 108(a)(1)(E) — the rule that let homeowners exclude forgiven mortgage debt from income — applies only to debt discharged before January 1, 2026. It has lapsed. The IRS's own Publication 4681 states that such debt "cannot be excluded from income for discharges completed or discharge agreements entered into after December 31, 2025." California has been out of conformity with the federal exclusion since 2014 discharges, so there is no state version either. A bill to make the federal exclusion permanent was introduced in February 2025 and has sat in committee since.

Three consequences:

• For a purchase-money loan foreclosed nonjudicially, this probably does not matter to you. The IRS's own position, in Information Letter 2014-0018, is that a loan described in CCP § 580b(a)(3) is nonrecourse from inception for federal tax purposes, which means no cancellation-of-debt income at all — the transaction is a disposition measured by the full outstanding balance. The IRS's examiner guide, Publication 5550, lists California among the anti-deficiency and nonrecourse states. The normal paperwork is a Form 1099-A, not a 1099-C. (An information letter is not binding authority, which is exactly why this belongs with your own accountant.)
• For a cash-out refinance or a HELOC, it matters a great deal. The same IRS letter treats non-purchase-money loans under California's anti-deficiency statutes as recourse from inception. California law blocks collection of the deficiency; it does not convert the debt to nonrecourse for tax purposes. So a real 1099-C is possible — and with the principal-residence exclusion gone, the only remaining shelters are bankruptcy and insolvency under § 108(a)(1)(A) and (B). The insolvency test compares your total liabilities to the fair market value of all your assets immediately before the discharge.
• One lifeline. § 108(a)(1)(E)(ii) still reaches a 2026 discharge if it is "subject to an arrangement that is entered into and evidenced in writing before January 1, 2026." A short-sale approval letter or a signed modification agreement dated on or before December 31, 2025 may still support exclusion. If you have one, show it to your accountant before anyone files anything.

Withholding, and the asymmetry nobody warns short sellers about

California's real estate withholding is 3 1/3% of the total sales price. Per the Franchise Tax Board's Publication 1016 and the Form 593 instructions, withholding is not required when the property is in foreclosure — a sale under a power of sale, a sale under a foreclosure decree, or a deed in lieu.

A short sale is a different story. Publication 1016 lists short sales among transactions subject to withholding, and says expressly that short sales do not qualify for the loss-or-zero-gain exemption "simply because the seller receives no cash from the sale." On an $800,000 short sale that is $26,640 withheld out of money the lender was expecting — enough to collapse the deal. The fix is certifying an available Part III exemption on Form 593, most often the principal residence or "property last used as a principal residence" exemption. Raise it with your escrow officer before the file is in motion, not after.

What it does to your ability to buy again

A foreclosure, a short sale and a deed in lieu all sit on a credit report for about seven years — and under 15 U.S.C. § 1681c(c)(1) that clock actually runs from 180 days after the original delinquency, not from the sale, so it can fall off sooner than people expect. We are deliberately not printing credit-score point estimates, because the figures circulating all trace back to a 2011 blog post and nothing authoritative has replaced them.

What is documented is the waiting period before you can get another mortgage, and the difference is large enough to change what you do:

Event	Fannie Mae (B3-5.3-07)	FHA (Handbook 4000.1)
Foreclosure	7 years (3 with documented extenuating circumstances, with LTV limits)	3 years
Deed in lieu of foreclosure	4 years (2 with extenuating circumstances)	3 years
Short sale	4 years (2 with extenuating circumstances)	3 years

That three-year gap on the conventional side is the strongest practical argument for negotiating an exit rather than letting it go to auction. And one correction: the FHA "Back to Work" programme, which let borrowers qualify 12 months after a foreclosure, expired September 30, 2016 and has not been revived. A great deal of currently-ranking content still promotes it. The only surviving relief is the ordinary extenuating-circumstances exception in Handbook 4000.1, which is narrower than a general downturn.

After the sale, you do not have to leave that day

The new owner cannot change the locks. Under Code of Civil Procedure § 1161a, a former owner holding over after a sale under a power of sale may be removed only after a three-day written notice to quit, and only if "the title under the sale has been duly perfected" — which means the trustee's deed properly executed, delivered and recorded. After that it is a court process, not a self-help one.

Realistically, an uncontested unlawful detainer in Los Angeles County runs 30 to 60-plus days from notice to sheriff lockout, and a contested one considerably longer. The tenant response deadline in California is now 10 court days, not the five days you may have read; and in the City of Los Angeles the Right to Counsel Ordinance, effective August 20, 2025, requires notices that, if omitted, can delay or dismiss a case. Bona fide tenants get much more than three days — § 2924.8's notice to residents and federal law give them a 90-day floor, and a fixed-term lease generally has to be honoured.

None of that is a plan. It is breathing room, and it is worth knowing so that nobody can frighten you into signing something on the strength of a deadline that is not real.

The zombie second mortgage, and a brand-new statute

If the thing threatening to foreclose is a second mortgage you have not heard from in a decade, read this carefully, because the law changed in mid-2025 and it is strongly in your favour.

Civil Code § 2924.13, added by AB 130 and effective from mid-2025, applies to a subordinate mortgage — one that was junior to another security interest when it was recorded. It declares six practices unlawful, including: no written communication about the loan to the borrower for at least three years; failing to give a required notice of a transfer of loan servicing or of loan ownership; conducting or threatening a foreclosure sale after sending you a form such as an IRS 1099 showing the debt was written off or discharged; conducting or threatening a sale after the statute of limitations expired; and failing to send required periodic account statements. "Mortgage servicer" includes prior servicers, not just the current one.

The mechanism is unusually strong. Before conducting or threatening a nonjudicial foreclosure, the servicer must record a certification under penalty of perjury, simultaneously with the notice of default, either stating that no unlawful practice occurred or listing every instance of one — and must mail you, by certified mail with return receipt, a notice that you may petition the court for relief before the sale plus a copy of that certification. On your petition, the court "shall enjoin" the proposed sale until it decides the petition. The court may strike all or part of the arrears claim, bar the foreclosure outright, or allow it only subject to a corrected arrearage. You may also petition to set aside a completed sale where the certification was never recorded, shows a violation, or misrepresented the compliance history.

If a servicer you have never heard of is threatening a sale on a 2006 second, this is the statute to put in front of a lawyer. It is new enough that a lot of people on the other side of these files do not know about it yet.

Your options, honestly ranked

Roughly in the order worth trying, and the first four do not pay us anything:

1. Call your servicer and ask for loss mitigation in writing. Then demand a single point of contact under § 2923.7. A complete application filed at least five business days before a scheduled sale stops the process under § 2923.6(c). There is no application fee, and late fees are barred while it is pending.
2. Call a HUD-approved counsellor, or LA County DCBA at (800) 593-8222. Free, and on your side rather than on anyone's deal. Do this in parallel with everything else, not instead of it.
3. Reinstate if you can reach the arrears. You have until five business days before the sale date in the initial notice of sale, and the costs and fees they may add are capped by § 2924c(c) and (d). Check their figure against the payment history you are entitled to request.
4. If you have equity and time, list it. An agent will usually net you more than we will, and AB 2424 was written for exactly this: a listing agreement to the trustee buys 45 days, and a qualifying purchase agreement buys another 45. On a Valley house with real equity this is frequently the best outcome available, and it is the first thing we tell people who have enough runway.
5. Sell to a cash buyer. Right when there is equity but no time, or the house needs work you cannot fund, or a retail escrow will not finish before the sale date. Speed is the product; you give up some price for it.
6. Short sale, if you are underwater. Slower and lender-dependent, but CCP § 580e bars a deficiency after a lender-approved short sale of a one-to-four unit dwelling, including for junior lienholders that consent, and any purported waiver of that protection is void. Watch the 3 1/3% withholding point above.
7. Deed in lieu. Four years to a conventional loan instead of seven. Negotiated, not automatic.
8. Bankruptcy. A filing stays the sale, and Chapter 13 can cure arrears over time. That is a conversation with a bankruptcy attorney, and the fact that we are a buyer is exactly why we are not the ones to advise you on it.

What we do, and what we will not do

We buy Valley houses for cash, as they sit, and we can move quickly. On a property with a recorded notice of default we use contract forms built for the Home Equity Sales Contract Act: the written contract with the total consideration and every promised term on its face, the 14-point notice above your signature, the attached notice of cancellation with the date and time filled in, your five business days to cancel, and no money and no signed document moving until that period has fully elapsed — because the statute requires exactly that and because a deal that cannot survive you thinking about it for five days is not a deal worth having.

What we will not do:

• We will not tell you we can stop your foreclosure. We cannot promise that, and making the promise would make us a foreclosure consultant under § 2945.1(a) — which, under § 2945.4(e), would bar us from buying your house at all. Any buyer who leads with "we'll stop the sale" is either describing a crime or does not know the law they are operating under.
• We will not charge you anything. Not a fee, not a deposit, not for "processing." Money moves toward you through escrow.
• We will not take a deed from you with a promise that you can rent it back and buy it later. Civil Code § 1695.12 presumes that is a disguised loan, and the regulators warn about it for good reason.
• We will not ask you for a power of attorney, and we will not offer to recover surplus funds for you after a sale.
• We will not tell you to stop talking to your servicer. Keep talking to them.
• We will not tell you to sell when listing nets you more. If you have 90 days and equity, go read the AB 2424 section again and call an agent. We would rather say that on the first call than take your afternoon.

What helps us price accurately: the notice of default and the notice of sale if one has issued, the servicer's name and loan number, whether there is a second or a line of credit, and the sale date if there is one. And take any purchase agreement to your own attorney before you sign it. A legitimate buyer will wait a day for that. We will.

Sources for the above: California Civil Code §§ 1695–1695.17, 2923.5, 2923.55, 2923.6, 2923.7, 2924, 2924b, 2924c, 2924f, 2924g, 2924.8–2924.19, 2924m, 2929.3, 2944.7–2944.10 and 2945–2945.11, and Code of Civil Procedure §§ 580b, 580d, 580e and 1161a, as current through January 1, 2026; AB 2424 (Stats. 2024, Ch. 311), SB 1146 (Stats. 2024, Ch. 601), AB 130 (2025), AB 1521 (Stats. 2025, Ch. 200) and AB 1957 (Stats. 2026, Ch. 279); 12 C.F.R. § 1024.41; IRC § 108 and IRS Publications 4681 and 5550 and Information Letter 2014-0018; FTB Publication 1016 and the 2026 Form 593 instructions; Fannie Mae Selling Guide B3-5.3-07 and HUD Handbook 4000.1; the Los Angeles County Registrar-Recorder/County Clerk, Treasurer and Tax Collector, and Department of Consumer and Business Affairs; and California Department of Real Estate, Attorney General and Department of Financial Protection and Innovation consumer alerts. Figures and programme deadlines change — confirm anything you are about to act on, and confirm it with a lawyer rather than with a buyer.