When money’s tight, and you've cut down on your other expenses as much as possible, it might still be impossible to keep up with your mortgage payments. Once you fall far enough behind on the loan, your lender (or the subsequent loan owner) will likely foreclose—that is, go through a specific legal process before eventually selling your home to a new owner at a foreclosure sale.
In this article, you'll find a step-by-step explanation of what typically happens in a California foreclosure, as well as what's new in California foreclosure law for 2025.
New California Foreclosure Laws for 2025
California's foreclosure landscape changed in 2025, with new laws taking effect.
Help for Wildfire Victims
In California, a new law (AB 238) provides up to one year of mortgage forbearance and foreclosure relief to wildfire victims. Borrowers experiencing financial hardships due to the wildfire disaster described in the proclamation of a state of emergency that Governor Gavin Newsom issued on January 7, 2025, related to the Eaton Wildfire, the Palisades Fire, and the Straight-line Winds, can request a forbearance on their mortgage loan.
To get the forbearance, borrowers must affirm that they're experiencing a financial hardship due to the wildfire disaster. The law also prohibits a mortgage servicer from starting a foreclosure, asking a court for a foreclosure judgment or order of sale, or conducting a foreclosure-related eviction or foreclosure sale.
Protections for Homeowners Facing Zombie Second Mortgage Foreclosures
Also, a new California law (AB 130) gives important protections to homeowners facing foreclosure of so-called "zombie" second mortgages. These old second loans are often believed to have been settled, forgiven, or included in a modification of the first mortgage. Effective June 30, 2025, AB 130 requires mortgage servicers to provide a signed statement verifying that they and every previous loan servicer complied with all legal requirements before starting foreclosure on a zombie second mortgage.
If the lender doesn't do this certification, admits to noncompliance, or you suspect misrepresentation in their compliance, you can contest the foreclosure in court. Once you challenge the action, the foreclosure process pauses until a judge reviews and rules on the case.
Third Parties Can Get Copies of Foreclosure Notices
In addition, another recent California foreclosure law (A.B. 2424), effective January 1, 2025:
- requires the servicer to let borrowers know that a third party, such as a family member, the borrower's attorney, or a HUD-approved housing counselor, can record a request to receive copies of default and notice of sale
- prohibits a foreclosure sale from being conducted for 45 days if the trustee receives, at least 5 business days before the scheduled date of sale, a listing agreement for the sale of the property (the trustee also has to postpone a foreclosure sale by at least 45 days after getting a copy of a purchase agreement for the sale of the property), and
- says a trustee can't sell a home at the initially scheduled foreclosure sale for less than 67% of the home's fair market value.
When a Foreclosure Can Start in California
If the property is your principal residence, federal law generally requires the servicer to wait until you’re more than 120 days delinquent on the loan before starting a foreclosure. In some cases, however, the process can begin earlier, like if you violated a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder. (12 C.F.R. § 1024.41 (2025).)
California's Homeowner Bill of Rights
The Homeowner Bill of Rights (Cal. Civ. Code § 2923.4 and following) (2025) is a set of California laws that provide protections to homeowners in foreclosure. The law went into effect on January 1, 2013, and on September 14, 2018, Governor Brown signed a bill that permanently reinstated its expired provisions.
Under this law, the servicer can’t officially begin the foreclosure until 30 days after it has contacted you in person or by phone (or satisfied specific requirements for attempting to contact you) to assess your financial situation and explore alternatives to foreclosure, like a loan modification or repayment plan. During the initial contact, the servicer has to tell you that you have the right to ask for a subsequent meeting, which can take place over the phone.
If you ask for a meeting, the servicer has to schedule it to occur within 14 days. However, the servicer may assess your financial situation and discuss foreclosure avoidance options during the first contact rather than at a subsequent meeting. The servicer also has to give you the toll-free telephone number of the United States Department of Housing and Urban Development (HUD) so you can find a HUD-certified housing counselor.
Also, the Homeowner Bill of Rights makes the following activities, among others, illegal:
- dual tracking a foreclosure while a loan modification application is pending (see below) and
- robosigning foreclosure documents.
Under California law, if you didn't previously apply for a modification, or if you've had a material change in your financial circumstances since your previous application, and you send the servicer a complete application at least five business days before a scheduled foreclosure sale, the servicer can’t proceed with the foreclosure (that is, it can't dual track your loan). The foreclosure can only begin after:
- the servicer makes a written determination that you’re not eligible for a modification, and the appeal period has expired
- you don’t accept a modification offer within 14 days, or
- you accept a modification offer, but you default (fail to make the payments) or otherwise breach the agreement. (Cal. Civ. Code § 2923.6 (2025).)
But if you've already applied and your financial circumstances haven't changed, submitting an application won't prevent the foreclosure from going forward.
This California law is more generous than federal law. Federal law requires you to submit your application more than 37 days before the sale to stop the foreclosure.
How Foreclosure Sales in California Work
If you don’t get current on the loan, work out an alternative to foreclosure, or stop the process by filing for bankruptcy, the sale will take place on the set date. California foreclosure sales happen between the hours of 9 a.m. and 5 p.m. on business days, Monday through Friday. (Cal. Civ. Code § 2924g (2025).)
At the sale, the lender will most likely bid on the property using a “credit bid.” With a credit bid, the lender basically gets a credit in the amount of your debt. The lender can bid the total amount you owe on the loan, including foreclosure fees and costs, or it may bid less.
In some states, when the lender is the high bidder at the sale but bids less than the total amount of the debt owed, it can get a deficiency judgment against the borrower. But in California, deficiency judgments aren’t allowed after nonjudicial foreclosures. (Cal. Code Civ. Proc. § 580d (2025).) If the sale results in excess proceeds (money over and above what’s needed to pay off all the liens on your property), you’re entitled to that surplus money.
After the sale, the winning bidder gets a trustee's deed.
Options to Avoid Foreclosure
A few potential ways to avoid a foreclosure include reinstating the loan or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.
Can I Get My Home Back After a Foreclosure Sale in California?
Although the Homeowner Bill of Rights won't let you get your home back after a trustee’s deed is recorded, you might be able to reclaim your home in rare circumstances by making a legal claim like wrongful foreclosure or breach of contract, depending on the facts of your situation.
For example, if you have an FHA loan and the servicer didn't meet FHA’s loss mitigation requirements, you might be able to challenge the foreclosure on the basis of wrongful foreclosure. Or, you might be able to make a claim of breach of contract if, for example, the servicer foreclosed on your home even though you were making payments according to a written loan modification agreement. In either of these situations, as well as some others, you might be able to invalidate the sale.
You can raise a claim of wrongful foreclosure or breach of contract in the unlawful detainer (eviction) action after the foreclosure or by filing your lawsuit.
When Do I Have to Leave My Home After a California Foreclosure?
If you don’t move out after the foreclosure sale, the new owner (usually the lender) has to give you a three-day notice to quit (move out) before starting a formal eviction action in court. Generally, it's better to leave the property before an eviction starts.
Talk to a Lawyer If You're Facing a Foreclosure in California
While this article provides an overview of a typical California foreclosure, keep in mind that state and federal laws are complicated, and servicers often make mistakes in the process. Most of the time, however, servicer errors go unchallenged. If the servicer skipped a step, made a mistake, or violated the law, you could have a defense that could force the servicer to start the foreclosure over or provide you with leverage to work out an alternative.
Also, laws change, so verifying them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney if you’re facing a foreclosure. Talk to an experienced foreclosure lawyer to learn about different options in your circumstances.