Options When Facing Foreclosure in California

How to Avoid Foreclosure in California

By Baylen Trafton. I'm not a lawyer and this isn't legal advice. These are the strategies I've seen homeowners use successfully over the years to avoid foreclosure, whether that meant keeping the home or selling it on their own terms.

1. Communicate with your lender

Contact your lender as soon as you think you may miss a payment. Explain your situation and ask what options are available. Lenders generally prefer solutions to foreclosure.

Loan modification: changes your loan's terms (rate, term or sometimes balance) to make payments manageable. Expect to submit financial documents, a hardship letter and an application.

2. Forbearance and repayment plans

Forbearance: temporarily reduces or pauses payments, often for three to six months. Afterward you repay the missed amount through a lump sum, repayment plan or modification.
Repayment plan: adds part of the past-due amount to your regular payments until you're caught up.

3. Refinancing

If you have enough equity, income and credit, a refinance into better terms may lower your payment.

4. Know your rights in California

The California Homeowner Bill of Rights gives borrowers protections, including a single point of contact at the lender and limits on “dual tracking” (pursuing foreclosure while a complete modification application is under review).

5. Bankruptcy

Chapter 13 can stop a foreclosure and let you catch up over three to five years under a court-approved plan, if you have enough income.
Chapter 7 triggers a temporary automatic stay but usually doesn't save the home long-term if you can't resume payments. Talk to a bankruptcy attorney.

6. Sell your home

If keeping the home isn't realistic, selling before the foreclosure sale can protect your credit and any equity.

Traditional sale: if you have equity, a regular sale can pay off the loan and put money in your pocket. Time matters, so act early.
Short sale: if you owe more than the home is worth, your lender may approve a sale for less than the balance.
Deed in lieu: you transfer the home to the lender in exchange for release from the loan, with lender approval.
Cash offer: for speed and certainty, see your as-is and cash options.

7. Get free, trusted help

HUD-approved housing counselors offer free or low-cost foreclosure advice. Find one through HUD's website. A foreclosure attorney can advise on your legal rights.

8. Avoid foreclosure scams

Be wary of anyone who guarantees to stop a foreclosure, asks for large upfront fees, or tells you to stop talking to your lender or sign over your deed. Never sign documents you don't fully understand.

Steps to take now

Gather your mortgage statements, bank statements, tax returns and proof of income.
Call your lender and ask about every option.
Talk to a HUD-approved housing counselor.
If selling may be the answer, call us early. Time is your biggest asset.

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Confidential, no-pressure conversation about your options.

Call 559.213.7734 See as-is options

Foreclosure FAQs

How long does foreclosure take in California?

Most California foreclosures are non-judicial. After a Notice of Default is recorded, there's at least about three months before a Notice of Trustee's Sale can be issued, and then at least about 20 days before the sale, so the process often takes several months. Timelines vary, so talk to an attorney about your specific case.

Can I sell my house if it's in foreclosure?

Yes. You can usually sell up until the trustee's sale. Selling early gives you the best chance to protect your equity and credit.

What is a short sale?

A sale for less than what you owe, approved by your lender. It typically affects credit less than a foreclosure.

Will I lose my equity in a foreclosure?

Often, yes. Foreclosure sales and fees can eat into equity, which is why selling on your own terms first is usually better if you can't keep the home.