5 Ways to Stop A California Foreclosure In 2026
(AB 2424)
Protect Your Equity and Your Credit With
CA Assembly Bill 2424 (AB 2424)
The 2026 Foreclosure Landscape
Facing a foreclosure is not just stressful but also overwhelming. However, we'll discuss 5 ways California homeowners facing a 2026 foreclosure can stop or postpone it. We'll go over loan modifications and forbearances as well as how using your California Assembly 2424 Rights (CA AB2424) can postpone the process by up to 45 days.
The Final Step: Moving From Knowledge to Action
Facing a California foreclosure in 2026 can fees like a stressful race against a 111-day clock, especially when you don’t know the timeline, your rights or ways to stop it.
Don’t worry we’ve got you covered. This is Part 3 of our 2026 California Foreclosure Authority Series. In Part 1 we broke down the California Foreclosure Timeline. In Part 2 we detailed your “dual shield” of federal and state laws like AB 2424 that protect California homeowners from unfair foreclosure practices.
Today in Part 3 the rubber meets the road as we’ll discuss 5 actionable steps you can use to save your house and equity from being foreclosed.
I. Loan Modification Agreement
This option is best suited for homeowners looking to keep their property. A loan modification occurs when the bank changes the original terms that the homeowner and bank agreed to. This can include changes such as:
- Interest Rate Reductions
- Past-Due Balance Forgiveness
- Length of Loan Extensions
Loan Modifications Benefits Include:
- Lower monthly payments
- Lower interest rates
- Chances of keeping your house are greatly improved
Homeowners interested in loan modifications must request, fill out and submit a loan modification application. The bank will then review the loan modification application and either approve or deny it.
California law mandates that if homeowners are denied a loan modification or forbearance then the bank must state their denial reasons.
II. Forbearance
Another option for homeowners looking to keep their house. A forbearance occurs when a bank agrees to temporarily pause or reduce a homeowner’s monthly payment due to a financial hardship. Homeowner’s seeking forbearance must contact their bank and request, fill out and submit a forbearance application.
Hardships that may help homeowners qualify for forbearance:
- Job loss
- Income reduction
- Medical emergency
- Financial stress
Remember banks must review and approve or deny your forbearance application. If you’re denied then they must state their reasons for denying your application.
III. Reinstating the Loan
This option is also for homeowners looking to keep their house and who have the financial means to catch up on missed payments and fees. This is because reinstating the loan requires the homeowner to make a lump sum payment in order to “reinstate” or bring the loan back to good standing.
As a result the homeowner may be required to pay some, most or all of the following:
- Pay back all missed payments
- Pay pre-foreclosure costs
- Pay penalty fees
- Inspection fees (if applicable)
- Attorney fees (if applicable)
As we can see this requires financially burdened homeowners to make a lump sum payment but if you have the means to do so then it is highly recommended for you to do this.
IV. Listing Your House For Sale (AB 2424 Rights)
This option is for homeowners looking to sell or those who’ve tried other solutions but haven’t succeeded. California’s Assembly Bill 2424 (AB 2424) went into effect on January 1, 2025 and this law empowered California homeowners facing non-judicial foreclosures. A big reason why is because it gives homeowners facing non-judicial foreclosures the ability to delay a foreclosure sale for 45 days.
In order to do so the homeowner must list their house for sale with a licensed California real estate broker or agent and submit proof doing so to the the trustee. The 45 day delay is granted as long as the trustee receives the proof 5 or more business days before the scheduled sale date.
This is a literal 45-day life line for homeowners facing a sale date. In essence it shifts the power dynamics between California homeowners and foreclosing banks because prior to this law deadline extensions were almost only granted by the banks. However, as long as homeowners fulfill the two requirements (listing their house for sale & submitting proof to the trustee) the extension is granted without the need of the banks approval.
Benefits of a 45-day delay:
- Ability to market and sell their property
- Additional 6 weeks to attempt other solutions
- 45 days to reconfigure strategies
The law also grants homeowners a secondary 45-day delay if the homeowner finds and goes into escrow with a buyer.
V. Legal or HUD-Certified Housing Counseling
Legal Counseling (Foreclosure Attorneys)
This option is especially recommended for homeowners facing judicial foreclosures because in judicial foreclosures the homeowner is being sued by the bank. Hiring an attorney allows them to file legal responses on your behalf, litigate against the lender and possibly delay or stop the foreclosure altogether.
If any of the following apply, contact an attorney as soon as possible:
- You were served court papers (judicial foreclosure)
- You sense the lender isn’t handling the foreclosure properly (you were denied forbearance/loan modification and weren’t given an explanation)
- The sale date is approaching and you need legal advice
Attorneys can review your case and their search may uncover legal violations committed by the lender. So if you suspect something isn’t right with the foreclosure then contacting a foreclosure attorney is worth a shot.
HUD Counseling
HUD counselors provide free or low-cost advice to homeowners facing foreclosure. They can assist in various ways including:
- Assistance and guidance to properly fill out loan modification and forbearance applications
- Calling and negotiating with the lender on your behalf
- Educating you about the foreclosure process and timeline.
- Reviewing your situation to determine an action plan
Remember HUD counselors offer their service at low costs and sometimes free. To find a certified HUD-Counseling agency near you, click here.
Closing Thoughts
The California foreclosure process can move fast. In fact, non-judicial foreclosures can conclude in as little as 111-days! So don’t get caught off guard. Always be mindful of where you are in the foreclosure process and the timeline. Whether you pursue a loan modification, forbearance or utilize your AB 2424 postponement rights the key is to take action while you still can.
If you need help figuring out:
Where you are in the foreclosure process
Which options you can still take advantage of