By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.
Most California foreclosures are nonjudicial: the lender’s trustee sells the home at a public auction after recording a notice of default and a notice of sale, without a court case. Under the steps described by the California Courts self-help guide, the minimum time from the notice of default to the sale is about four months, and in practice it’s often much longer. This page walks through each stage, what an owner can still do at each one, and what changes for 1-4 unit homes on January 1, 2027.
If you’re behind on payments, talk to your servicer and a HUD-approved housing counselor now. The CFPB lists free counselors and the HOPE Hotline, (888) 995-4673. This page is general information, not legal advice; a California attorney can tell you how the rules apply to your loan.
The stages of a California foreclosure
| Stage | What happens | Timing under the court guide |
|---|---|---|
| Contact before default | The lender must contact the borrower to discuss options to avoid foreclosure. If the borrower asks for another meeting, it must be scheduled within 14 days. | At least 30 days before the notice of default |
| Notice of Default (NOD) | Recorded with the county and mailed by certified mail within 10 business days of recording. | Starts a 90-day period to cure the default |
| Notice of Trustee’s Sale (NOTS) | Recorded, mailed, posted on the property and in a public place, and published weekly for three consecutive weeks. | No earlier than 90 days after the NOD; the sale is set at least 21 days out |
| Reinstatement deadline | The owner can stop the sale by paying the past-due amounts and fees. | Up to 5 days before the scheduled sale |
| Redemption | The owner can pay off the entire loan plus fees. | Up to the day of the sale |
| Trustee’s sale | Public auction; the winning bidder pays immediately in cash or by cashier’s check and receives a trustee’s deed. | The scheduled date, unless postponed |
Sales are postponed often, for negotiations, bankruptcy filings, paperwork or the lender’s own reasons, so the real timeline is usually longer than the minimum. Nationally, ATTOM reported that foreclosures completed in the second quarter of 2026 took an average of 563 days from the first public notice (ATTOM, July 2026).
What happens before the notice of default?
Missed payments come first, then late fees, then letters from the servicer. Before recording a notice of default, the lender has to contact the borrower to assess their finances and explore alternatives. This is the cheapest time to act: a repayment plan, forbearance or loan modification is easier before foreclosure costs start adding to the balance.
The notice of default and the 90-day cure period
The notice of default is recorded in the county records, so it becomes public. From recording, the owner has 90 days to cure by paying what’s overdue, plus permitted fees and costs. Investors and agents watch these recordings, which is why owners in default often start getting mail and calls from strangers. Be careful whom you deal with; California bans upfront fees for loan modification services (Civil Code §2944.7), and HUD-approved housing counselors are free.
The notice of trustee’s sale
If the default isn’t cured, the trustee can record a notice of sale no sooner than 90 days after the notice of default. The notice must be mailed, posted on the property and in a public place, and published once a week for three weeks. The sale date is at least 21 days after the notice.
Can you still stop a foreclosure?
Yes, at several points:
- Reinstate the loan by paying the past-due amount and fees, up to 5 days before the sale.
- Agree on an alternative with the lender: a loan modification, repayment plan, forbearance, short sale or deed in lieu of foreclosure.
- Sell the home before the sale date. If there’s equity, a regular sale usually leaves the owner with more than an auction would.
- Pay off the loan in full, up to the day of the sale.
- File in court with an attorney’s help, where there are legal grounds.
A pending short sale doesn’t stop a foreclosure by itself. Only the lender can postpone the sale, so a short sale has to keep moving and keep the lender informed. Our guide to the California short sale process explains the steps, and owners who want help can read about our short sale listing services.
The trustee’s sale
The auction is public, usually at the county courthouse or another posted location. The lender typically makes an opening credit bid up to what it’s owed plus costs. Outside bidders must pay in full immediately, in cash or by cashier’s check, and buy without an interior inspection. If nobody outbids the lender, the property goes back to the lender and becomes bank-owned real estate, called REO.
If the auction brings more than the debt and costs, the surplus goes to junior lienholders and then to the former owner. When it’s unclear who is owed the money, the trustee deposits it with the Superior Court.
For buyers, the auction and the later bank-owned sale are very different purchases. We compare them in foreclosure auction vs REO.
Post-sale bidding on 1-4 unit homes (Civil Code §2924m)
Since 2021, a trustee’s sale of a home with one to four units isn’t final for 15 days. During that period, certain “eligible bidders” can submit a bid or a notice of intent to bid, and then have until day 45 to match or beat the auction price, according to the Senate Judiciary Committee. Eligible bidders include tenants of the property and qualifying nonprofits, community land trusts and public entities. The law runs until January 1, 2031.
AB 1957, signed September 18, 2026 as Chapter 279 of the Statutes of 2026, changes the process from January 1, 2027 (Fortra Law summary):
- Prospective owner-occupants are no longer eligible bidders; the categories become eligible tenant bidders and eligible community bidders.
- The process applies only to sales under a first-lien deed of trust or mortgage.
- A tenant bidder can use it only where the home had a valid certificate of occupancy and a market value at or below the FHA loan limit, and must agree to live there for at least a year under a recorded deed restriction.
- Trustees report sale details to the Attorney General, and an improper bid can bring a civil penalty of one-third of the property’s market value.
After the sale: owners and tenants
A new owner can’t simply change the locks. A former owner who stays must receive a 3-day written notice to quit, and if they don’t leave, the new owner has to file an eviction case, which can take several weeks. Tenants have more protection. Under Code of Civil Procedure §1161b, month-to-month tenants are entitled to 90 days’ written notice, and tenants with a fixed-term lease signed before the sale can generally stay until it ends, unless the new owner will live there or another exception applies. Local just-cause eviction rules can add more.
Will you owe money after a foreclosure?
After a nonjudicial foreclosure, California law generally doesn’t allow the foreclosing lender to pursue the borrower for the shortfall (Code of Civil Procedure §580d). Other liens, such as a second mortgage that wasn’t used to buy the home, can be different. Tax is a separate question: for nonrecourse debt, IRS Publication 4681 says a foreclosure doesn’t create cancellation-of-debt income, but the whole loan balance counts as the sale price for tax purposes. The federal exclusion for forgiven principal-residence debt doesn’t apply to debt discharged after December 31, 2025 (IRS Publication 4681). Ask a tax adviser about your situation.
Judicial foreclosure and HOA foreclosure
Lenders can also foreclose through the courts, which is slower and less common for home loans in California. Homeowners associations can foreclose for unpaid assessments in some circumstances. After an HOA’s nonjudicial foreclosure, the owner has 90 days to pay what’s owed and get the home back, according to the court guide.
Foreclosure activity in California in 2026
Foreclosures are rising from low levels. ATTOM counted 21,543 California properties with foreclosure filings in the first half of 2026, up 12.79% from a year earlier, with 16,040 foreclosure starts and 2,644 bank repossessions. That’s one filing for every 680 housing units. In August 2026 alone, California had 2,565 foreclosure starts, third among states, and 589 completed foreclosures, second only to Texas (ATTOM, September 2026).
Questions owners ask
How long does foreclosure take in California?
At least about four months from the notice of default to the earliest possible sale under the court guide’s timeline, plus the time before the notice is recorded. Postponements commonly stretch it to a year or more.
Will I be notified before my home is sold?
Yes. The notice of default and the notice of sale are mailed by certified mail, and the notice of sale is posted on the property and published in a newspaper.
Can I sell my home during foreclosure?
Yes, until the trustee’s sale. If you have equity, a sale can pay off the loan and let you keep the rest. If you owe more than the home is worth, a short sale needs your lender’s approval.
What happens to my tenants if the home is foreclosed?
They’re protected by state law: at least 90 days’ notice, and often the right to stay until a fixed-term lease ends.
Behind on payments and weighing a sale? Talk to us confidentially about your options. Our guide to negotiating short sale approval covers what lenders ask for, and if the home has already gone back to the bank, REO asset management explains what happens next.
Sources & notes
- California Courts Self-Help Guide: nonjudicial foreclosure
- Senate Judiciary Committee: AB 1957 analysis; Fortra Law: AB 1957 changes; Governor’s legislative update, September 18, 2026
- Code of Civil Procedure §1161b; IRS Publication 4681
- ATTOM: midyear 2026 foreclosure report; ATTOM: August 2026 report; CFPB
Deadlines depend on the facts of each loan and can change with new legislation. This is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.
