What options may help me avoid foreclosure in California?

What options can I ask about?

These are starting points to discuss, not recommendations or decisions about what you qualify for.

• Able to pay the overdue amount: ask the servicer or trustee about reinstatement.
• A temporary hardship: ask the servicer about a repayment plan or forbearance.
• Ongoing trouble making payments: ask about available loan modifications. A refinance requires qualifying for a new loan.
• Thinking about moving: compare a regular sale, a short sale, and a deed in lieu, including their costs and effects.
• A scheduled sale, a dispute about the foreclosure, or questions about bankruptcy: contact a qualified attorney right away.

Serve First Realty discusses services within its licensed brokerage role. Ashlar LDA, Inc. does not choose legal options or recommend legal strategies.

What is a repayment plan?

A repayment plan generally adds an agreed amount to your regular payment for a set time until you catch up on missed payments. The extra amount can be large. For loans and servicers covered by California's rules, keeping up with a written, approved repayment plan generally prevents certain foreclosure notices and a trustee sale while you keep up. Federal rules also protect borrowers who are keeping up with some plans. Get the payment terms, and how the plan affects any scheduled sale, in writing.

Can a loan modification stop foreclosure?

A loan modification changes agreed terms of your existing loan. Depending on the program, changes may include the interest rate, the length of the loan, or how missed payments are handled. A lower payment or a smaller balance is not guaranteed. Adding missed amounts to the balance or making the loan longer may increase the total you pay.

Applying does not always stop foreclosure. For a covered first mortgage, if your servicer receives a complete application for a modification it offers, directly or through another party, at least 5 business days before a scheduled sale, California law generally stops certain foreclosure steps while the application is pending. Coverage and exceptions depend on the loan and the servicer. Your application is complete only when you have sent every document the servicer asks for, by its reasonable deadlines. Sending papers to us or to this website is not the same as your servicer receiving them. Applying again does not always restart the protection.

Federal rules have their own deadlines, and some protections require a complete application more than 37 days before a sale. Federal rules also recognize certain applications that look complete and require the servicer to make reasonable efforts to get missing information, so a request for one more document does not always end your protection right away.

If you are denied, a borrower with a covered loan generally has at least 30 days from the written denial to appeal under California Civil Code section 2923.6. Rules differ for some servicers and under federal law. Your servicer decides whether to approve, and approval is not guaranteed.

Watch out: California generally prohibits charging you for loan modification help before every promised service is fully done. Federal law adds more conditions, including that you have signed a written agreement with your lender or servicer that includes the relief obtained. Free help is also available from HUD-approved housing counselors.

Paid loan modification help described on this site is provided by Serve First Realty within its licensed brokerage role, not by Ashlar LDA, Inc.

Should I sell my house before foreclosure?

Selling before foreclosure may let you receive the money left after the required loan payoffs, other liens and charges, and selling costs are paid. Ask for an estimated closing statement instead of relying only on the difference between the home's value and your first mortgage balance.

A foreclosure auction may leave less money, but any surplus does not automatically disappear. California law sets the order for paying out sale money, and any money left over goes to the person legally entitled to it.

A sale that pays your mortgage in full generally avoids a foreclosure on your credit report. It does not erase earlier late payments or other accurate negative information. Credit effects vary, and we cannot promise a particular score or future loan approval.

More time to sell: For homes with 1 to 4 units, a California law called AB 2424 allows a listing delay. The trustee must receive a qualifying listing agreement with a California-licensed real estate broker at least 5 business days before the scheduled sale, and the home must already be publicly marketed the way the law requires by then. If all the conditions are met, the sale cannot happen until at least 45 days after the scheduled sale date. A qualifying listing delay also extends your right to catch up on payments, counted from the new sale date.

More time when you have a buyer: After the listing delay has been used, the trustee must receive a qualifying purchase agreement at least 5 business days before the new sale date. It must be a real, fully signed contract, with a price at least equal to the unpaid balance of all recorded loans and liens on the home. It must name the buyer, the price, and the closing date, and be accepted by the escrow company. If all the conditions are met, the new sale date must be at least 45 days after the trustee received the agreement. That is not necessarily another 45 days added to the already-postponed date. A short sale offer for less than you owe does not qualify.

Each delay can be used only once. The papers must be sent by certified mail or a tracked overnight courier, with the required tracking, signature, and receipt information. Simply listing the home, getting an offer, or emailing documents does not give you a delay. Always confirm the sale status with the trustee.

Real estate brokerage services: Serve First Realty, DRE license 02298264.

What is a deed in lieu of foreclosure?

A deed in lieu is a voluntary transfer of ownership to the lender, under an agreement, instead of finishing the foreclosure. The lender has to agree. Applying does not by itself stop a scheduled sale.

Before you sign or transfer the title, have a lawyer review whether the agreement clearly releases you from the rest of the mortgage debt, and how other liens or debts will be handled. Do not assume transferring the deed wipes out every debt. Some programs offer moving help, but it is not guaranteed. There may be credit and tax effects.

Good to know

We cannot guarantee any foreclosure outcome. Loan modifications and short sales need the required approvals. Some foreclosure protections and postponements happen by law when their requirements are met; others need an agreement or a court order. We do not control the lender, servicer, trustee, or court.

Contacting us, booking a call, sending documents, or listing your home does not by itself stop a foreclosure or extend a deadline. Check a scheduled sale's status with the trustee. If you believe a legal protection applies but the sale is going ahead, get legal help right away.

This page covers California nonjudicial mortgage foreclosure. Reverse mortgages, homeowner association liens, tax sales, court foreclosures, and other cases may follow different rules. It is general information, not legal or tax advice.

Sources: California Civil Code sections 2923.6, 2924c, 2924f(e) (AB 2424), 2924k, 2924.11, 2924.15, and 2944.7; Code of Civil Procedure section 580e; Regulation X, 12 CFR 1024.41; Regulation O, 12 CFR 1015; federal bankruptcy code, 11 U.S.C. 362 and 1322. Last reviewed October 2026.