Your First Seven Days
If you are behind on your mortgage, or afraid you are about to be, start here. Falling behind is not a character flaw, and there is real help available. This guide is written for California homeowners, in plain language, with free tools that run on your own device.
It is education, not legal, tax, or financial advice. Nothing here promises that any option will be open to you, and nobody can honestly promise to stop a foreclosure. What this guide can do is show you where you stand, explain the rules, give you better questions to ask, and point you to the people who can legally help.
Do These Five Things This Week
You do not need to solve everything at once. You need to learn your dates, talk to the right people, and gather your papers. These five steps do that.
- Open and read every letter and notice, including the ones you dread, and put them in date order.
- Call your servicer, the company named on your mortgage statement, and say you are having trouble paying. Ask what help it offers.
- Call the HUD housing counseling line the CFPB lists, (800) 569-4287. Callers enter a ZIP code and are referred to a counselor nearby.
- Gather your two most recent mortgage statements, proof of your income, and a list of your monthly expenses.
- Keep a log of every call: the date, the name of the person, and what was said.
Who Is Who
Four names show up in a foreclosure. Your servicer collects your payments and handles requests for help. Your lender or the investor who owns the loan may be a different company, and the servicer follows that owner's rules. The trustee is the party named in your deed of trust who records the notices and conducts the sale. You are the borrower, which the law also calls the trustor.
Your requests for help go to the servicer, so learn its name and its phone number. If you have an FHA or VA loan, or one owned by Fannie Mae or Freddie Mac, special programs may apply, and the options chapter shows how to find out.
Do Not Pay Anyone to Rescue Your Home
Scams aimed at people who are behind on a mortgage exist, and the CFPB says an advance charge is a red flag. The Consumer Financial Protection Bureau says there is free foreclosure help, that a request to pay in advance is a red flag, and that help that guarantees it can stop your foreclosure is not legitimate.
California law backs that up. A person who represents, for pay, that they will stop or postpone a foreclosure sale generally cannot collect anything until the work is finished. The scams chapter explains the rules and gives you a checker you can use on any offer.
Why Waiting Costs You
It is tempting to stop opening the mail when the news is bad. But every notice carries dates, and the dates decide which options are still open. Some protections depend on when you turn in a complete application, and the right to catch up on the loan ends five business days before a sale. Learning your dates early gives you choices. Learning them late removes them.
Asking for help early also helps the arithmetic: fewer months of missed payments means a smaller amount to catch up.
The best time to ask for help is before the next missed payment. The next best time is today.
How a California Foreclosure Actually Works
In California a lender can foreclose without a lawsuit. It uses the power of sale written into your deed of trust and follows the steps in Civil Code section 2924 and the sections after it, which is called a nonjudicial foreclosure. Those steps are a calendar, and the calendar gives you time and rights.
This chapter walks the calendar for a first mortgage on a home you live in. The Foreclosure Timeline at the end turns your own notice dates into your cutoffs.
Step by Step
The order below is the sequence the statutes set out. Not every borrower reaches every step, and each step has rules the servicer must follow. The contact and written notice steps are California protections for a first lien loan on an owner occupied home of one to four units, described under Who These Rules Cover below.
- You miss payments. The servicer sends late notices and may call.
- Under the federal servicing rule, a servicer generally may not make the first foreclosure notice or filing until a loan on your principal residence is more than 120 days past due.
- Before recording a notice of default, the servicer must contact you, or show it tried with due diligence, and wait 30 days. It must give you the HUD toll free number for finding a counselor.
- The notice of default is recorded with the county recorder. A servicer that offers foreclosure prevention alternatives must send you a written communication about them within five business days.
- At least three months must pass from the filing of the notice of default before the notice of sale, although a notice of sale may be recorded up to five days early if the sale itself is no earlier than three months and 20 days after the notice of default. The notice of sale is posted and published, and the first publication is at least 20 days before the sale.
- The sale is held. A sale cannot take place earlier than three months and 20 days after the notice of default was recorded.
The Deadline That Matters Most: Reinstatement
You may reinstate a monetary default, meaning pay what is past due plus permitted costs, from the day the notice of default is recorded until five business days before the sale date in the first recorded notice of sale. If the sale does not happen on that date and a new notice of sale is recorded, the right revives. If the sale is postponed for longer than five business days, the right revives from the date of the postponement.
There is no right to reinstate during the last five business days before a sale. That is why the timeline tool counts back from the sale date, and why you should treat the date it shows as the latest possible day, never as a target. Aim to act well before it. A holiday in that window moves the real deadline earlier.
What a Postponement Does
A sale can be postponed. When a sale is postponed for at least 10 business days, the servicer must send you written notice of the new date and time within five business days. A postponement is not a cancellation, and it does not mean your problem is solved. Treat any postponement as a bonus window to finish whatever you were working on.
Who These Rules Cover
The California protections in the next chapter apply to a first lien mortgage or deed of trust on owner occupied residential property of no more than four units. Owner occupied means it is your principal residence and the loan was for personal, family, or household purposes. A rental, a second home, or a second mortgage may not be covered by those sections. The federal loss mitigation rules apply to a mortgage on your principal residence.
Some small servicers are exempt from some of the California rules, and small servicers have their own, narrower duties under the federal rule (12 CFR 1024.41(j)). Do not guess. Ask the servicer, in writing, which rules it says apply to your loan.
A foreclosure is a calendar. Know the dates and you know your options.
Your Rights: The Homeowner Bill of Rights and Federal Rules
California and federal law give a borrower in trouble specific, enforceable rights. In California the core of them is called the Homeowner Bill of Rights, and the federal servicing rule known as Regulation X adds more. Laws change, so confirm the current text before you rely on any of this, and use it to ask better questions rather than to argue from memory.
This is a plain language summary, not legal advice. If you think a rule was broken, a lawyer can tell you whether it was and what to do.
A Single Point of Contact
When you request a foreclosure prevention alternative, your servicer must promptly set up a single point of contact and give you direct ways to reach that person or team. The contact explains how to apply and the deadlines, coordinates your documents and tells you what is missing, knows the status of your request, makes sure you are considered for every alternative the servicer offers, and has access to someone who can stop a foreclosure when that is warranted.
The contact stays assigned until the servicer has exhausted its options or your account is current. Ask for the name and number in writing. The letter builder below does that for you.
No Dual Tracking
Dual tracking is when a servicer keeps moving toward a sale while it is still deciding on your request for help. California limits it. If you submit a complete first lien loan modification application at least five business days before a scheduled sale, the servicer may not record a notice of default or notice of sale, or hold the sale, while the complete application is pending.
The pause continues until the servicer makes a written determination that you are not eligible and your appeal period ends, or until you fail to accept an offer within 14 days, or until you accept a modification and then default on it. The federal rule is similar: a complete application received more than 37 days before a sale blocks the sale on the same kinds of conditions.
What the Servicer Owes You in Writing
Within five business days after recording a notice of default, a servicer that offers foreclosure prevention alternatives must write to you about them. Within five business days of receiving a complete application, or any document in connection with one, it must acknowledge receipt in writing and explain its process, any deadlines, expiration dates, and anything missing. The federal rule requires an acknowledgment within five days, not counting holidays, Saturdays, and Sundays, and a written evaluation within 30 days of a complete application received more than 37 days before a sale.
A complete application is one where you have supplied all the documents the servicer required within the reasonable timeframes it set. That makes the servicer's list important: ask for it, send everything, and keep proof of what you sent and when.
If You Are Denied
A denial must come in writing with the reasons. If the denial was based on a net present value calculation, the letter must state the monthly gross income and property value used, and you may request every input. You have at least 30 days from the date of the written denial to appeal in California, and the servicer may not record a notice of default or notice of sale, or hold the sale, until 31 days after you were notified, or longer if you appeal. Under the federal rule, where the application arrived 90 or more days before the sale, you may appeal a loan modification denial within 14 days after the servicer's written notice of the options it will offer, and a different person must review the appeal.
Put the denial date in the Foreclosure Timeline. Dates are everything here.
No Fees, No Late Fees While You Are Being Considered
A servicer may not charge any application, processing, or other fee for a first lien loan modification or other foreclosure prevention alternative. It also may not collect late fees while a complete application is under consideration, an appeal is pending, you are making timely modification payments, or an alternative is being evaluated or used.
If a foreclosure prevention alternative is approved in writing and you comply with a trial or permanent modification, forbearance, or repayment plan, the servicer may not record a notice of sale or hold the sale. If your loan is transferred to a new servicer, the new servicer must honor an approved alternative.
If You Are a Servicemember
If you are a servicemember, or a dependent of a servicemember, federal law may give you extra protections. The Servicemembers Civil Relief Act can apply to the servicemember's interest rate and to the risk of foreclosure, and counseling for covered servicemembers is available from agencies such as Military OneSource and Armed Forces Legal Assistance. California requires your servicer to tell you this in writing before it records a notice of default.
Tell your servicer, your counselor, or a lawyer at the start if this applies to you, and ask which protections cover your loan.
If the Rules Are Broken
Before a trustee's deed is recorded, a borrower may sue for an injunction against a material violation, and the sale stays enjoined until the violation is corrected. After a trustee's deed is recorded, a borrower may recover actual economic damages for a material violation that was not corrected. If the violation was intentional or reckless, the court may award the greater of three times the actual damages or $50,000. A prevailing borrower may also recover attorney's fees.
These cases are time sensitive. The California Attorney General's office takes reports of violations and cannot give legal advice. The Consumer Financial Protection Bureau says a complaint forwards your issue to the company for a response but won't automatically stop or delay a foreclosure. A lawyer can act in court.
The rules are most useful when you ask for each protection in writing and keep the proof of when you asked.
Fill in the fields above to build your letter.
Catching Up: Reinstatement, Repayment Plans, and Forbearance
If your hardship is behind you, whether you went back to work, a bill was settled, or a lump sum is coming, the simplest fix is to bring the loan current. Three tools do that, and they differ in how much you must pay at once and how long the fix takes.
The right choice depends on your income now, not on how you feel about the past few months. Use the calculator at the end to see what catching up would cost.
Reinstatement: Pay What Is Past Due
Reinstating means paying everything in default that is shown in the notice of default, plus the permitted costs and expenses the notice of default describes, so the loan is current again. In California you may do this from the day the notice of default is recorded until five business days before the sale date in the first notice of sale, and the right revives if a new notice of sale is recorded or a sale is postponed for more than five business days.
The notice of default carries a statement of the amount as of a stated date and says that it will increase until your account becomes current. So the number is a moving target. Ask the servicer for a written reinstatement quote with an itemized list and the date through which it is good. While your property is in foreclosure you still must pay the other obligations your loan requires, such as taxes and insurance.
Repayment Plan
A repayment plan adds part of the overdue amount to your regular monthly payment over a set period, until you are caught up. HUD describes it for FHA loans as adding part of the overdue amount to regular monthly payments over a set period, and VA describes paying an extra amount each month to cover the payments you missed. Your payment goes up for a while, so a repayment plan only works if your income has recovered enough to carry it.
Forbearance
In a forbearance the servicer temporarily pauses or lowers your payments, and you repay the missed or reduced amounts afterward. VA describes a special forbearance that gives you extra time to repay missed payments without adding them to the end of the loan. The terms differ by loan, so ask three questions: when does it end, how is the missed amount repaid, and does interest keep running?
Get It in Writing, Then Follow It
An approved foreclosure prevention alternative protects you when it is approved in writing. If a trial or permanent modification, forbearance, or repayment plan is approved in writing and you comply with it, the servicer may not record a notice of default or notice of sale or hold the sale. Making each payment on time, in the amount stated, is the part that is yours.
If a promise is only on the phone, write it down, then email or mail the servicer asking it to confirm in writing. Do not stop other steps because someone said it would be fine.
Catching up is a number, a date, and a written quote. Get all three before you plan around any of them.
Staying Home: Loan Modifications and Other Retention Options
If your income has dropped for good, or you cannot catch up and keep paying, a change to the loan itself may be what keeps you in the house. These are called home retention options or foreclosure prevention alternatives, and which ones exist depends on who owns or insures your loan.
This chapter describes the categories as the agencies describe them, tells you how to find out which apply to you, and ends with a matcher and a budget worksheet. It does not list payment targets or approval rates, because those change and differ by loan.
What a Loan Modification Is
A loan modification is a permanent change to your loan terms. HUD describes a standalone modification for FHA loans as adding past due amounts to the principal balance and extending the term at a fixed rate. A modification can lower the monthly payment while raising the total you pay over time, so ask for the new payment, the new term, the new balance, and the total cost in writing.
If You Have an FHA Loan
HUD lists these home retention options for FHA loans: repayment plans, forbearances, a standalone partial claim, a standalone loan modification, a combination loan modification and partial claim, and a Payment Supplement, which uses a partial claim to resolve delinquent payments and lowers the monthly payment for three years. A partial claim puts the past due amount in an interest free subordinate lien that is generally repaid when certain events occur, which your servicer can list for you.
You may be required to complete a trial payment plan before approval. You can receive only one permanent home retention option within any 24 month period, unless you are affected by a Presidentially Declared Major Disaster. HUD also lists home disposition options: a pre-foreclosure sale and a deed in lieu of foreclosure.
If You Have a VA Loan
VA lists special forbearance, a repayment plan, a traditional loan modification, a 30 year modification, and a VA partial claim, which lets VA work with your servicer to pay your missed payments and bring the loan current. You repay a partial claim when you pay off your loan or sell your home, and you must first complete a 3 month trial payment plan.
VA launched the partial claim program on June 15, 2026. It is new, so ask your servicer whether it offers it yet. VA provides counseling to any Veteran or surviving spouse, even when the loan is not VA guaranteed, and it assigns a loan technician to a VA loan that is 61 days past due.
If You Have a Conventional Loan
A conventional loan may be owned or guaranteed by Fannie Mae or Freddie Mac, and their relief programs can matter. This guide does not list their terms. Use the loan lookup on each company's own site to learn whether either owns your loan, then ask your servicer which relief options apply. A lookup may ask for personal details, so use only the official sites linked in this guide.
A Complete Application, Without the Guessing
Your protections can turn on the date your application is complete, and complete means you have supplied all the documents the servicer requires within the reasonable timeframes it sets. So the first call is simple: ask for the complete list and the deadlines in writing. Expect the servicer to ask about your hardship and your finances. The hardship letter template and the budget worksheet below help you assemble them.
The federal rule tells servicers to remind you to contact the servicers of any other loans secured by the same property, so call those lenders too.
You are not asking for a favor. For a loan the California rules cover, the law makes your servicer's contact responsible for seeing that you are considered for every option the servicer offers.
Selling Before the Sale
Sometimes the right answer is to sell the home yourself, on your own terms, before a trustee's sale decides the date for you. If your home is worth more than you owe plus the cost of selling, a sale can protect your equity and end the debt cleanly. If it is worth less, the next chapter explains the short sale.
Either way the first job is the same: find out the real numbers. The calculator at the end turns your own estimates into a net figure, and it will tell you plainly if there is a shortfall.
Do You Have Equity?
Equity is what is left of the sale price after you pay every lien on the home and every cost of selling. Liens include your first mortgage, any second mortgage or home equity line, and any other recorded debt against the property. Ask each lender for a payoff quote, which includes interest and fees and is more accurate than the balance on your statement.
For the value, ask a licensed agent for a market analysis based on recent MLS sales near your home, and ask to see the sold comparables behind any number. Treat an online estimate as a starting point only. The calculator uses whatever price you enter, so test a low case as well as a hopeful one.
Timing: the Sale Has to Close First
A sale on the market does not by itself stop a scheduled trustee's sale. If you plan to sell, the closing generally needs to happen before the sale date, unless the sale is postponed or canceled, with the buyer's lender and the escrow officer told the date at the start. Ask your servicer in writing whether it will postpone the sale while the home is under contract, and do not assume that it will.
When a normal sale closes, escrow pays off the lenders from the proceeds and you keep what is left. If a notice of sale has been recorded, tell your agent the sale date on day one and ask whether any offer can close in time.
Choosing an Agent and Reading the Agreement
Interview more than one licensed agent. Ask how many short sales they have closed, who negotiated them with the lender, and how long those took. Ask for references, and read the listing agreement before you sign it. Ask what you will owe, if anything, before the home sells.
Be careful about any fee that comes due before the work is done. California does not allow a person who negotiates a mortgage loan modification or forbearance for pay to collect any compensation until the work is fully performed, and a licensee is held to the same rule on residential property of up to four units.
Offers That Sound Too Easy
A buyer who promises a fast cash close, or a company that offers to buy your home and rent it back to you with a promise that you can buy it back, is working in a field with its own rules. For a home of one to four units that you occupy as your principal residence, with a recorded notice of default, California's equity purchaser rules require the contract to carry a conspicuous right to cancel, and you should have a lawyer read it first. Run the offer through the net proceeds calculator and compare it with a market sale.
Money Left Over
If your home sells for more than every lien and cost, the money is yours. Someone who offers to recover leftover sale money for a fee or an assignment is another warning sign. California forbids a foreclosure consultant from agreeing to arrange the release of surplus funds after a trustee's sale for compensation.
Selling is a decision about numbers and dates. Get both before you decide anything else.
How a Short Sale Works in California
A short sale is a sale for less than you owe, completed with your lender's written consent. It is a negotiated exit, so it takes more steps than a normal sale, and it ends only when the lender agrees in writing and the sale closes as agreed.
California gives short sales a specific protection, and it comes with conditions. This chapter explains how a short sale runs and what the protection does and does not cover.
The Steps
No two short sales run the same, and nobody can honestly tell you how long yours will take. The usual sequence is below.
- Decide with a counselor or a lawyer that a short sale is the right exit, and learn every lien on the home.
- Hire a licensed agent who has closed short sales, and ask for references.
- List the home for sale and receive an offer.
- Send the offer and your financial package to the servicer, with a hardship letter and the documents it asks for.
- Wait for the servicer's decision, and keep every date and every request in a log.
- Get the lender's approval in writing, including any terms about the balance.
- Close the sale, with the deed recorded and the proceeds paid as agreed.
- Collect written confirmation from each lender that the loan is released and nothing more is owed.
Your Key Protection: Code of Civil Procedure 580e
When you sell a dwelling of up to four units for less than the debt, with the written consent of the holder, no deficiency is owed or collected on a note secured solely by a deed of trust or mortgage on that dwelling. Two things must have happened: title is voluntarily transferred to a buyer by a recorded deed, and the sale proceeds are paid to the lender as agreed.
The lender may not require you to pay anything extra, aside from the proceeds of the sale, in exchange for its written consent. Any waiver of these protections is void. The protection does not cover fraud or waste, and it does not apply when the borrower is a corporation, limited liability company, limited partnership, or political subdivision.
Second Mortgages and Other Liens
The statute speaks of the holder of the deed of trust or mortgage, so treat each lender's written consent as required. If you have a second mortgage, a home equity line, or another lien, ask each lender to agree to release for its share. Ask each lender for a written release, or a written statement that nothing more is owed, as part of its approval.
What a Short Sale Does to a Scheduled Sale
For loans the Homeowner Bill of Rights covers, California requires the cancellation of a pending trustee's sale once a short sale has been approved by all parties and proof of funds or financing has been provided. Before that point nothing is guaranteed, so ask the servicer in writing whether it will postpone the sale while it reviews the offer, and do not rely on a verbal yes.
FHA and Deed in Lieu
For FHA loans, HUD describes a Pre-Foreclosure Sale, which lets the servicer accept less than the full amount owed, and a Deed in Lieu of Foreclosure, which lets a borrower give the property to HUD in exchange for release from the mortgage obligation. HUD says you may be eligible for relocation expenses if you meet certain conditions, and it refers to a marketing period for the pre-foreclosure sale.
The deed in lieu is a different legal route from a short sale. Statute 580e covers a sale for less than owed, so read any deed in lieu agreement for what it says about the balance and about second liens before you sign.
Traps to Avoid
Do not sign a paper that says you owe the difference after a short sale without a lawyer reading it first, because California says a lender cannot require extra payment for its consent and that any waiver is void. Do not pay anyone up front to negotiate for you. A person who represents, for pay, that they will stop a foreclosure may be a foreclosure consultant, who cannot collect until the work is done. And be honest in every document: fraud or waste takes away the protection.
A short sale is only a short sale when the lender's consent is in writing. A promise on the phone protects nothing.
| Exit | Who must agree | What happens to the balance | Wait for a new Fannie Mae loan |
|---|---|---|---|
| Sell for more than you oweA normal sale | The buyer. Each lender is paid at closing. | Paid from the proceeds. You keep what is left. | The Fannie Mae table lists none for a sale that pays the loan in full. |
| Short sale (preforeclosure sale)Sold for less than you owe | The buyer, and the lender in writing. Treat each lienholder's consent as required. | No deficiency is owed on a note secured solely by a dwelling of up to four units when title passes by recorded deed and proceeds are paid as agreed. Fraud and waste are excepted. (Code Civ. Proc. 580e) | 4 years, or 2 with extenuating circumstances. |
| Deed in lieu of foreclosureYou give the home to the lender | The lender must agree. | Read the agreement. It should say what happens to the balance and to any second lien. | 4 years, or 2 with extenuating circumstances. |
| ForeclosureA trustee's sale | No agreement is needed. The lender follows the foreclosure steps. | No deficiency is owed or collected on the note after a trustee's sale. A guarantor may still be liable. (Code Civ. Proc. 580d) | 7 years, or 3 with extenuating circumstances and added requirements. |
Taxes and Credit Afterward
When a loan is modified, sold short, or foreclosed, two questions follow you: do you owe tax on any forgiven debt, and how long until you can borrow again? Both have specific rules, and both are worth settling with a professional before you file or apply.
This chapter explains the rules the IRS, the California Franchise Tax Board, and Fannie Mae publish. It is not tax advice.
Why Forgiven Debt Can Be Income
The IRS says you must report canceled debt as income even if you did not receive a Form 1099-C, unless an exclusion applies. A foreclosure is treated as a sale of the property. For recourse debt, the forgiven amount above the property's value may be ordinary income. For nonrecourse debt, the IRS says a foreclosure does not produce ordinary income from the cancellation of debt. Whether a loan was recourse or nonrecourse is a question for your tax professional and your loan papers.
The Federal Main Home Exclusion Has a Date Limit
The IRS lists an exclusion for cancellation of qualified principal residence indebtedness that is discharged before January 1, 2026, or discharged under a written arrangement entered into and evidenced in writing before January 1, 2026. A discharge on or after that date, outside such an arrangement, is not covered by that exclusion, and the IRS page lists no extension as of October 16, 2026. Tax law can change, so confirm the current rule on the IRS page before you rely on it.
California Does Things Differently
The California Franchise Tax Board says that, as of October 1, 2025, California law remains out of conformity with the federal exclusion for discharges of qualified principal residence indebtedness on or after January 1, 2025, and that forgiven debt may be required to be included in your California income. It lists two common exclusions: a discharge in a Title 11 bankruptcy and insolvency. Ask your tax professional how both governments treat your situation.
Insolvency in Plain Language
You are insolvent when your total debts are more than the fair market value of everything you own, measured immediately before the debt was canceled. The IRS excludes canceled debt only to the extent you were insolvent. If you were insolvent by 70,000 dollars and 80,000 dollars was canceled, 70,000 dollars is excluded and 10,000 dollars may remain taxable. The worksheet below follows the Publication 4681 rule: the excluded amount is the smaller of the canceled debt or the amount of insolvency.
Credit and Waiting Periods
A foreclosure, short sale, deed in lieu, or bankruptcy can limit when you can get a new mortgage. Before a new mortgage that Fannie Mae will buy, its Selling Guide lists a waiting period of 7 years after a foreclosure and 4 years after a deed in lieu or a preforeclosure sale (a short sale). With extenuating circumstances those become 3 years and 2 years, and a foreclosure carries added requirements. A Chapter 7 or 11 bankruptcy is 4 years, or 2 with extenuating circumstances. Other loan types have their own rules.
This guide does not predict credit score changes.
Forgiven debt can be taxable income. Whether yours is depends on dates, the type of debt, and your finances.
Lawyers, Bankruptcy, and Where to Get Help
You do not have to work this out alone. The CFPB says there is free foreclosure help. This chapter says when a lawyer is worth calling immediately, what bankruptcy does and does not do, and where to look for help.
Every number and link in the finder below was checked on October 16, 2026.
Call a Lawyer Now If
Some situations are too time sensitive to wait for a second opinion. Contact a lawyer or legal aid at once if any of these is true.
- A sale date is set, especially if it is close (this guide treats 30 days or less as urgent).
- You submitted a complete application and the servicer is still moving toward a sale.
- You were denied with no reasons, or told a protection does not apply to you and you are not sure it is true.
- Someone has asked you to sign a deed, a power of attorney, or a contract to sell your home.
- You are thinking about bankruptcy.
- The sale has already happened, or you received an eviction notice.
Bankruptcy and the Automatic Stay
Filing a bankruptcy petition operates as a stay that applies to all entities, and it covers any act to create, perfect, or enforce a lien against property of the estate. That is why a filing can pause a foreclosure. The stay lasts until the property is no longer property of the estate, or until the case is closed or dismissed, or, in certain cases, a discharge is granted or denied. A court can grant relief from the stay on the request of a party in interest, after notice and a hearing.
Bankruptcy has serious, lasting effects on your finances and your credit, and the right chapter depends on your income, debts, and goals. It is a decision to make with a bankruptcy lawyer, not from a guide.
Legal Aid and Lawyer Referral
LawHelpCA is a California legal help site. It lists legal aid and legal help near you, and its housing topics include foreclosure. The State Bar of California certifies lawyer referral services, and its page says they offer a first consultation at a reduced fee or no fee.
HUD Approved Counselors
A counselor reviews your whole situation, develops a plan of action with you, and can speak to your servicer for you. California lets you designate a HUD certified housing counseling agency, an attorney, or another adviser, with your consent in writing, to discuss your finances and options with the servicer on your behalf. For legal questions, ask a lawyer. Nobody can promise a result.
The CFPB lists (800) 569-4287 as HUD's housing counseling line: call, enter your ZIP code, and you are referred to a counselor near you. You can also search HUD's list of participating agencies at hud.gov/findacounselor, or use the CFPB's finder, which says the agencies on its list are approved by HUD.
Reporting a Problem
If you think your servicer broke a rule, you can report it to the California Attorney General's office, which cannot give you legal advice, and to the Consumer Financial Protection Bureau. The CFPB says a complaint forwards your issue to the company for a response but won't automatically stop or delay a foreclosure. A lawyer can act in court.
A counselor and a lawyer do different jobs. Some people need both.
The CFPB lists this as HUD's housing counseling line. Call, enter your ZIP code, and you are referred to a counselor near you.
The Consumer Financial Protection Bureau's counselor finder. It says the agencies on its list are approved by HUD, and that counselors can offer independent advice, often at little or no cost to you.
California's legal help site. It lists legal aid and legal help near you, and its housing topics include foreclosure.
The State Bar certifies lawyer referral services, and its page says they offer a first consultation at a reduced fee or no fee.
Look a lawyer up on the State Bar's attorney search before you hire one or sign anything they give you.
Plain language summary of the California law, plus where to report a violation. The office cannot give you legal advice.
Free foreclosure help, scam warning signs, and how to submit a complaint. A complaint forwards your issue to the company but does not automatically stop or delay a foreclosure.
VA loan technicians counsel any Veteran or surviving spouse. They are available Monday through Friday, 8 a.m. to 6 p.m. Eastern.
HUD's description of FHA repayment plans, forbearance, partial claim, modification, pre-foreclosure sale and deed in lieu.
Check whether Fannie Mae owns your mortgage. Use only this official site. It asks for personal details.
Check whether Freddie Mac owns your mortgage. Use only this official site, and be careful with the personal details a lookup asks for.
The federal rule for forgiven mortgage debt, the date limit and the insolvency and bankruptcy exclusions.
California's position on forgiven mortgage debt, which differs from the federal rule.
Scams and Bad Advice
The CFPB calls a request to pay in advance a red flag and says help that guarantees it can stop your foreclosure is not legitimate. VA warns Veterans who are behind about third party companies trying to take advantage of them. This guide adds two more warning signs: a request that you stop talking to your servicer, and a paper that moves your home into someone else's name.
California and federal law draw clear lines around this kind of help. Knowing them lets you test any offer in a minute.
The Legal Lines
California defines a foreclosure consultant as someone who, for pay, represents they will stop or postpone a foreclosure sale, obtain forbearance, help you reinstate, save your home, or help you recover sale proceeds. Attorneys, licensed real estate brokers and salespeople acting under their license, people acting under the written approval of HUD or another government agency, and certain other licensed people are excluded from that definition. A consultant may not collect any pay until every promised service is done, may not take a power of attorney, may not take a lien or an interest in your home, and may not arrange the release of surplus sale funds for compensation.
Anyone who negotiates a loan modification or forbearance for a fee paid by the borrower may not collect any pay until the work is fully performed, take a lien, or take a power of attorney, and a licensee on residential property of up to four units is held to the same rule. Under the federal rule for mortgage assistance relief services, a provider may not take a fee until you hold a written agreement with your servicer that includes the offer the provider obtained.
Warning Signs
A fee or deposit asked for before the work is done. A vow to stop the foreclosure or to get you a modification. A request to sign a deed, a quitclaim, or a paper that adds someone to your title. An offer to buy your home and rent it back to you with a promise you can buy it back later. An offer to recover leftover sale money for a fee or an assignment. A request to send your mortgage payments to someone other than your servicer.
VA warns Veterans who are behind to be careful of third party companies trying to take advantage of them, and to work only with trusted organizations.
How to Check an Offer
Look up any counseling agency on HUD's list or the CFPB's finder. Look an attorney up on the State Bar of California's attorney search. Ask the issuing agency to confirm any license number you are given. Read every paper before you sign it, and take it to a lawyer or counselor first when it involves your title, your money, or your signature. The Scam Checker below walks through ten questions.
What This Page Will and Will Not Do
This guide and its tools are free. Nothing on this page asks you for money, a deposit, a deed, or a power of attorney. The tools run on your device and do not send what you type. This page is education: it does not offer loan modification or foreclosure rescue services, and it does not claim anyone can stop your foreclosure.
If You Already Paid
Do not be embarrassed. Gather your contract and receipts, stop any payments you can lawfully stop, and talk to a lawyer or legal aid about the contract and about your rights to cancel or recover your money. You can report a problem to the California Attorney General's office and to the Consumer Financial Protection Bureau.
Real help can wait for you to get a second opinion. A scam cannot.
The Homeowner's Glossary
Common terms you will hear from a servicer, a counselor, a lawyer, or a tax professional, in plain language. Use the filter to jump straight to a word.
A lender demanding the entire loan balance because of a default, instead of only the missed payments. A breach or acceleration letter may warn that this can happen. In California you may still reinstate by paying what the notice of default shows is in default, plus permitted costs, until five business days before the sale.
The amount you are behind: the missed payments plus any late fees, advances, and permitted costs the servicer is charging. Ask for the exact figure in writing, because it grows until the loan is current.
The effect of filing a bankruptcy petition. It stops many collection actions, including acts to create, perfect, or enforce a lien against property of the estate. It can end when the case is closed or dismissed or, in certain cases, a discharge is granted or denied, and a court can grant relief from it (11 U.S.C. 362).
The lender or holder of the loan under a deed of trust. The beneficiary elects to sell the property after a default, and its agents record the notices.
When a lender forgives all or part of a debt. The IRS treats canceled debt as income that must be reported, even without a Form 1099-C, unless an exclusion applies, such as insolvency or a bankruptcy discharge.
In California, a first lien loan modification application is complete when you have supplied all the documents the servicer required within the reasonable timeframes it set. The date it becomes complete decides which protections apply, so ask for the servicer's list and keep proof of what you sent.
Giving the property to the lender, or for an FHA loan to HUD, instead of going through a foreclosure sale. HUD lists it as an FHA home disposition option, describes it as an exchange for release from the mortgage obligation, and says relocation expenses may be available under stated conditions. Read it for what it says about the balance and about second liens.
The document that secures a California home loan with the property. It names a trustee and gives a power of sale if the borrower defaults, which is what allows a foreclosure without a court case.
Failing to meet the terms of the loan, for example by missing payments. A monetary default, such as missed payments, can be cured by reinstatement until five business days before a sale in California.
The part of a debt left unpaid after a property sells for less than is owed. California bars a deficiency after a trustee's sale (Code of Civil Procedure 580d) and, under stated conditions, after a short sale made with the lender's written consent (580e).
A servicer moving toward a foreclosure sale while it is still deciding on your request for help. California limits it when you submit a complete first lien loan modification application at least five business days before a scheduled sale.
What is left of a home's sale price after every lien and every cost of selling is paid. Negative equity means you owe more than the home would sell for.
A neutral third party that holds money and documents during a sale and pays off the loans from the proceeds at closing. The word also names the account a servicer may keep for your taxes and insurance.
A temporary pause or reduction in your payments, followed by repayment of the missed or reduced amounts. Ask when it ends, how the missed amount is repaid, and whether interest keeps running.
In California, a person who, for pay, represents they will stop or postpone a sale, obtain forbearance, help you reinstate, or save your home. Attorneys and licensed brokers acting under their license are excluded, and a consultant may not collect pay before the work is done.
A tax form a lender may file to report canceled debt. Not receiving one does not remove the duty to report canceled debt as income unless an exclusion applies.
The California laws that regulate servicer conduct before and during foreclosure on a first lien loan secured by owner occupied residential property of no more than four units: contact before a notice of default, a single point of contact, limits on dual tracking, and remedies.
A counselor at an agency approved by the U.S. Department of Housing and Urban Development. The CFPB's counselor finder says counselors can offer independent advice, often at little or no cost to you. Look an agency up on HUD's list or the CFPB's finder before you commit.
Having total liabilities greater than the fair market value of your total assets, measured immediately before a debt is canceled. Canceled debt is excluded from income only to the extent you were insolvent.
A recorded claim against a property that secures a debt. A first mortgage, a second mortgage, and a home equity line are each liens, and each lender must be paid or must agree to a release when you sell.
A permanent change to the terms of your loan. It may lower the monthly payment while raising the total cost over time, so ask for the new payment, term, balance, and total in writing.
The servicer's process for helping a borrower who is behind: repayment plans, forbearance, modification, partial claim, short sale, deed in lieu, and similar options. Federal rules set deadlines for acknowledging and deciding on a complete application.
The company that collects your payments, manages your account, and handles requests for help on behalf of the loan's owner. It may not be the company that made the loan.
Debt for which the lender can look only to the property. Under IRS rules a foreclosure on nonrecourse debt does not produce ordinary income from the cancellation of debt. Ask a tax professional how your loan is treated.
The document recorded with the county recorder that starts the nonjudicial foreclosure. Three months must pass before the notice of sale, which may be recorded up to five days early if the sale is no earlier than three months and 20 days after the notice of default. You may reinstate until five business days before the sale.
The notice, posted and published, that sets the date of the trustee's sale. It must be posted at least 20 days before the sale, and the first publication must be at least 20 days before the sale.
An option for FHA and VA loans that puts the past due amount into a separate balance, FHA describes it as an interest free subordinate lien generally repaid when certain events occur. VA says you repay it when you pay off the loan, refinance or sell, and requires a 3 month trial payment plan first.
A lender's written statement of exactly what it takes to pay a loan off on a given date, including interest and fees. It is more accurate than the balance on a monthly statement and is what a sale needs.
A clause in a deed of trust that lets the trustee sell the property after a default without going to court, following the steps in California Civil Code section 2924 and the sections after it.
A federal tax term for certain debt secured by a main home, as the IRS defines it. The IRS exclusion for its cancellation applies to discharges before January 1, 2026, or under a written arrangement made before then. The Franchise Tax Board said, as of October 1, 2025, that California does not follow it for discharges on or after January 1, 2025.
Debt for which the lender can pursue the borrower personally, not only the property. The IRS says forgiven recourse debt above the property's value may be ordinary income. California limits deficiencies after a trustee's sale and after a qualifying short sale.
Paying everything in default plus permitted costs so the loan is current again. In California it may be done until five business days before the sale date in the first notice of sale, and the right revives if a new notice of sale is recorded.
Selling a home for less than the debt, with the lender's written consent. In California, when title passes by recorded deed and proceeds are paid as agreed, no deficiency is owed on a note secured solely by a dwelling of up to four units (Code of Civil Procedure 580e).
The person or team a servicer must assign when you request a foreclosure prevention alternative. They coordinate your documents, know your status, and make sure you are considered for every option the servicer offers.
Money left after a trustee's sale pays the debts it must pay. Offers to recover surplus funds for a fee or an assignment are a warning sign, and a foreclosure consultant may not agree to arrange their release for pay.
A set of payments you make to show you can keep up before a modification or partial claim is made final. FHA may require one, and VA requires a 3 month trial plan before a partial claim.
The party named in a deed of trust that records the notices and conducts the foreclosure sale. The trustee's sale is the public sale of the property.
The borrower who signs a deed of trust. California law uses the word trustor for the owner whose property secures the loan.
Questions Homeowners Ask
There is no single answer. In California a sale cannot take place earlier than three months and 20 days after the notice of default is recorded. Enter your notice dates in the Foreclosure Timeline to see your earliest possible sale date and your cutoffs, then confirm each date with the trustee or servicer in writing.
Nobody can honestly promise to. Ways a sale may be paused or stopped include reinstating until five business days before the sale, a complete application for help in time, an approved written alternative you are following, a court order, or a bankruptcy filing. A lawyer can tell you which, if any, fit your case.
Not right away. Under the federal servicing rule a servicer generally may not make the first foreclosure notice or filing until a loan on your principal residence is more than 120 days past due. In California the servicer must also try to contact you and wait 30 days before recording a notice of default, for a first lien on an owner occupied home of one to four units.
Often little or nothing. The CFPB's counselor finder says counselors can offer independent advice, often at little or no cost to you, and the CFPB warns that a charge in advance is a red flag. Call the HUD housing counseling line the CFPB lists, (800) 569-4287, and enter your ZIP code, or search at hud.gov/findacounselor to find a counseling agency. Ask any agency what it charges before you start.
Its core sections apply to a first lien loan on owner occupied residential property of no more than four units, meaning your principal residence. A rental, a second home, or a second mortgage may not be covered, and some small servicers are exempt from parts of it. Ask a lawyer about your specific loan.
It depends. California bars a deficiency after a trustee's sale and, with conditions, after a short sale made with written consent. Before a new mortgage that Fannie Mae will buy, its waiting period is 7 years after a foreclosure and 4 years after a preforeclosure sale (a short sale). A short sale needs the lender's approval and takes work. Compare your own numbers with a counselor or lawyer.
Not if the conditions in Code of Civil Procedure 580e are met: the holder's written consent, title passed by recorded deed, and proceeds paid as agreed, on a note secured solely by a dwelling of up to four units. It does not protect against fraud or waste, or apply to a corporation or LLC borrower.
It depends on the date, the type of debt, and your finances. The federal main home exclusion covers debt discharged before January 1, 2026, or under a written arrangement made before then. The Franchise Tax Board said, as of October 1, 2025, that California has not conformed for 2025 and later. Insolvency and bankruptcy exclusions can apply. Ask a tax professional.
Yes, after a waiting period that depends on the loan type. Before a new mortgage that Fannie Mae will buy, its Selling Guide lists 7 years after a foreclosure and 4 years after a preforeclosure sale (a short sale) or deed in lieu, shorter with extenuating circumstances. Ask a lender about FHA, VA, and other loans.
Yes. You can sell before the trustee's sale, and the closing generally needs to happen before the sale date, unless the sale is postponed or canceled. Tell your agent and the servicer the sale date at the start, and ask the servicer in writing whether it will postpone the sale. Do not assume that it will.
Send everything by a method that proves delivery and keep copies. If the California rules cover your loan, ask for your single point of contact and for the written acknowledgment owed within five business days. If a rule was broken before the sale, a lawyer can seek an injunction. You can also complain to the CFPB or the California Attorney General.
VA provides counseling to any Veteran or surviving spouse, even if the loan is not VA guaranteed. Call a VA loan technician at (877) 827-3702, Monday through Friday, 8 a.m. to 6 p.m. Eastern. The VA partial claim launched June 15, 2026, so ask your servicer whether it offers it yet.
Compare it with a market sale first. Use the Net Proceeds Calculator, get a market analysis from a licensed agent, and have a lawyer read the contract. For a residence in foreclosure, California requires an equity purchase contract to state your right to cancel before a stated date and time.
No, not for this guide or its tools. They are free, nothing on this page asks for money, a deposit, a deed, or a power of attorney, and the tools keep what you type on your own device. Empower is a licensed real estate brokerage. This page does not offer loan modification or foreclosure rescue services.
You now know how a California foreclosure moves, the rights you have while it does, the ways to keep a home or leave one, what a sale does to taxes and credit, and how to spot a bad offer. The next step is a call: to your servicer, to a HUD approved counselor, or to a lawyer if a sale date is set. This guide is for education only. It is not legal, tax, or financial advice, it does not promise that any option is open to you, and it does not offer loan modification or foreclosure rescue services.