Your Rights During Foreclosure in California
Facing foreclosure is frightening, but you have more power than you might think. California has some of the strongest homeowner protection laws in the nation. Understanding your rights can help you fight back, delay the process, and potentially save your home.
This guide covers every right you have as a California homeowner facing foreclosure, from initial notices through the sale and beyond.
You Have Rights - Know Them
California's Homeowner Bill of Rights and other laws provide significant protections. Lenders must follow specific procedures, and violations can be grounds to challenge the foreclosure.
California Homeowner Bill of Rights
The California Homeowner Bill of Rights (HBOR) provides crucial protections for homeowners facing foreclosure. Here are your key rights:
Single Point of Contact
Your lender must provide you with one person (or team) who:
- Has access to your complete loan file
- Can communicate with you about your options
- Ensures you receive timely information
- Coordinates with other departments on your behalf
Why it matters: You're not bounced between departments. One contact is accountable for your case.
No Dual Tracking
Your lender cannot:
- Proceed with foreclosure while reviewing your loan modification application
- File a Notice of Default if you've submitted a complete application before the NOD
- Record a Notice of Sale while your application is pending
- Conduct a foreclosure sale until they make a written decision on your application
Why it matters: You have time to explore alternatives without the clock running.
Written Decision on Modification
If your loan modification is denied, your lender must provide:
- Written explanation of the reasons for denial
- Description of other foreclosure alternatives
- Information about your right to appeal
- Deadline for appealing the decision
Why it matters: You understand why you were denied and can address the issues or appeal.
Right to Appeal
If your loan modification is denied, you can:
- Request an appeal within 30 days of denial
- Provide additional documentation
- Have your application reviewed by different personnel
- Receive a written decision on your appeal
Why it matters: Initial denials aren't final - you get a second chance.
Accurate Foreclosure Documents
Before recording a Notice of Default or Notice of Sale, the lender must:
- Verify the accuracy of all information
- Ensure a competent person has reviewed the documents
- Confirm the borrower is actually in default
- Ensure proper chain of title
Why it matters: Errors in documentation can be grounds to challenge the foreclosure.
Additional California Foreclosure Rights
Right to Reinstate Your Loan
You can reinstate your loan by paying all past-due amounts:
- Available up to 5 business days before the foreclosure sale
- Stops the foreclosure process completely
- Returns your loan to current status
- Lender must provide accurate reinstatement quote on request
Right to Proper Notice
Your lender must provide proper notice at every stage:
- 30 days before NOD: Contact attempt to discuss options
- Notice of Default: Mailed within 10 days of recording
- Notice of Sale: Mailed 20+ days before sale, posted 20+ days before sale
- All notices must be in writing and contain required information
Right to Stay in Your Home
You have the right to remain in your home until:
- The foreclosure sale is complete
- A new owner takes possession
- You are legally evicted (requires court process)
Important: Do not move out early. You have legal rights to remain until the proper process is complete.
Right to Sell Your Home
You can sell your home at any time before the foreclosure sale:
- Traditional market sale
- Cash buyer sale (faster)
- Short sale (if underwater)
When Your Rights Are Violated
If your lender violates California foreclosure law, you may have remedies:
Dual Tracking Violation
Example: Lender proceeds with foreclosure while your complete modification application is pending.
Your recourse: You can seek an injunction to stop the sale and may be entitled to damages.
Improper Notice
Example: You didn't receive proper notice of default or sale.
Your recourse: The foreclosure may be voidable. Consult an attorney.
Robo-Signing
Example: Foreclosure documents were signed without proper review or by someone without authority.
Your recourse: May be grounds to challenge the validity of the foreclosure.
No Single Point of Contact
Example: You're bounced between multiple contacts with no one taking responsibility.
Your recourse: Document the violation and report to your lender and regulators.
If You Believe Your Rights Were Violated
- Document everything - dates, names, what was said
- Save all correspondence and notices
- File a complaint with the lender's complaint department
- Report to the Consumer Financial Protection Bureau (CFPB)
- Consult with a foreclosure defense attorney
Rights Regarding Deficiency Judgments
California has important protections against deficiency judgments (when you're sued for the difference between what you owe and what the home sells for):
California Anti-Deficiency Protections
- Purchase Money Loans: No deficiency allowed on loans used to buy your home
- Non-Judicial Foreclosure: Generally no deficiency after non-judicial foreclosure
- One-to-Four Units: Protected if owner-occupied during origination
Note: Refinanced loans, HELOCs, and investment properties may have different rules. Consult a professional.
Your Rights After Foreclosure
Even after a foreclosure sale, you have rights:
- Right to formal eviction process: The new owner must go through proper legal channels to remove you
- Right to claim surplus funds: If the sale exceeds what you owe, you're entitled to the excess
- Right to proper accounting: You can request an accounting of what was owed and what was collected
- Protection from harassment: New owners cannot intimidate or harass you to leave
Resources to Protect Your Rights
Free Housing Counseling
HUD-approved housing counselors can help you understand your rights for free:
- Call HUD at 1-800-569-4287
- Visit the HUD website to find local counselors
Legal Help
If you believe your rights were violated:
- Contact a foreclosure defense attorney for consultation
- Reach out to legal aid organizations if you qualify
- Contact your local bar association for referrals
File Complaints
- Consumer Financial Protection Bureau (CFPB): consumerfinance.gov
- California Department of Real Estate: dre.ca.gov
- California Attorney General: oag.ca.gov
Need Help Understanding Your Rights?
As licensed California real estate professionals, we can help you understand your options and connect you with the right resources. Schedule a free consultation.
Licensed: DRE #02076038 | NMLS #2033637
Frequently Asked Questions
Can my lender foreclose while I'm applying for loan modification?
No. Under California law (no dual tracking), your lender cannot proceed with foreclosure while reviewing a complete loan modification application.
Do I have to leave my home immediately after foreclosure?
No. The new owner must go through a formal eviction process. You cannot be locked out or removed without proper legal proceedings.
Can I sue if my lender violated the law?
Yes. Depending on the violation, you may be able to seek an injunction to stop foreclosure, actual damages, and possibly statutory damages. Consult an attorney.
What if I never received a Notice of Default?
Proper notice is required by law. If you didn't receive proper notice, this may be grounds to challenge the foreclosure. Document the lack of notice and consult an attorney.