How to Stop Foreclosure in Los Angeles & Orange County: The Complete 2026 Guide
If you're facing foreclosure in Southern California, you have more options than you might think. This guide covers everything from loan modifications to a California law most homeowners don't know about that can give you up to 90 extra days to sell at full market value. No matter where you are in the process, there's likely a path forward.
Quick Answer: Your Main Options
- Keep your home: Loan modification, forbearance, repayment plan, or bankruptcy
- Sell and preserve equity: AB 2424 gives you 90 extra days to sell at full market value (requires a licensed realtor)
- Exit with less damage: Short sale or deed in lieu of foreclosure
- Fight the foreclosure: Legal defense if your lender violated your rights (requires an attorney)
Not sure which option fits your situation?
Quick conversation. No pressure. We'll figure out your best path forward.
What This Guide Covers
Understanding the California Foreclosure Timeline
California uses a non-judicial foreclosure process, which means lenders don't need court approval to foreclose. This makes the process faster but also means you need to act quickly. Here's what typically happens:
🔑 Key Insight
The earlier you take action, the more options you have. Many homeowners wait until they receive the Notice of Trustee Sale, but by then, some options (like loan modifications) become much harder. Even if you're close to auction, you still have options including AB 2424.
For a detailed breakdown of each phase and what actions to take, see our complete guide: California Foreclosure Timeline 2026: Including AB 2424 Delays.
Your Foreclosure Options Explained
There's no one-size-fits-all solution to foreclosure. The right option depends on your financial situation, how much equity you have, whether you want to keep your home, and how far along the foreclosure process has gone.
Options to Keep Your Home
Loan Modification
Change your loan terms to make payments affordable
A loan modification permanently changes your mortgage terms. Your lender might lower your interest rate, extend your loan term, or even reduce your principal balance to make payments affordable.
- Best for: Homeowners who want to stay and can afford modified payments
- Timeline: 30-90 days for review
- Equity preserved: 100% (you keep your home)
Important: Under California law, your lender cannot foreclose while reviewing a complete modification application (no "dual tracking").
Forbearance
Temporary payment pause or reduction
Forbearance temporarily reduces or pauses your payments during a hardship. It doesn't erase what you owe. You'll need a plan to catch up afterward.
- Best for: Temporary hardships (job loss, medical emergency)
- Timeline: Usually 3-12 months
- Catch-up options: Lump sum, repayment plan, or loan modification
Chapter 13 Bankruptcy
Court-supervised repayment plan
Filing for Chapter 13 bankruptcy immediately stops foreclosure (automatic stay) and lets you catch up on missed payments over 3-5 years while keeping your home.
- Best for: Homeowners with regular income who can catch up over time
- Timeline: 3-5 year repayment plan
- Requires: Bankruptcy attorney, court approval
Options to Sell and Preserve Equity
AB 2424 Market Sale
90 extra days to sell at full market value
California's AB 2424 law gives homeowners facing foreclosure up to 90 additional days to sell their home on the open market at full value. This can preserve tens of thousands in equity compared to auction.
- Best for: Homeowners with equity who want to sell
- Equity preserved: Typically 95-100%
- Requires: Licensed real estate broker
Traditional Market Sale
Sell before foreclosure if you have time
If you're early in the foreclosure process, you may have time to sell traditionally without needing AB 2424. This preserves your equity and avoids foreclosure on your record.
- Best for: Early-stage foreclosure with equity
- Timeline: 30-90 days typical in LA/OC market
- Equity preserved: 90-95% after selling costs
Options to Exit with Less Damage
Short Sale
Sell for less than owed with lender approval
If you owe more than your home is worth, a short sale lets you sell with your lender's permission and forgive the remaining balance. You won't keep any equity, but it's less damaging than foreclosure.
- Best for: Underwater homeowners who can't afford payments
- Credit impact: Less severe than foreclosure
- Requires: Lender approval, financial hardship documentation
Deed in Lieu of Foreclosure
Transfer property to lender voluntarily
You voluntarily transfer your property to the lender to satisfy the debt. This avoids the foreclosure process but requires lender agreement and usually means you have little or no equity.
- Best for: Homeowners who want a clean exit
- Credit impact: Similar to foreclosure but may allow faster recovery
- Note: Lenders often reject if other liens exist on property
For a detailed comparison of all alternatives with equity preservation estimates, see: 7 Foreclosure Alternatives Compared: Which Saves the Most Equity?
📊 Equity Preservation Ranking
Most equity preserved → Least: Loan Modification (100%) → AB 2424 Market Sale (95-100%) → Traditional Sale (90-95%) → Short Sale (0%, but debt forgiven) → Deed in Lieu (0%) → Foreclosure Auction (often lose 30-50% of potential value)
Not Sure Which Option Is Right for You?
Every situation is different. The best option depends on your equity, income, timeline, and goals. Sometimes a quick conversation can help you see your situation more clearly.
(213) 444-2225 • No obligation. Just clarity on your next step.
AB 2424: The Option Most Homeowners Don't Know About
Here's something important that most foreclosure resources don't tell you: California law gives you a way to postpone foreclosure specifically so you can sell at full market value.
🔑 What AB 2424 Does
When you sign a listing agreement with a licensed broker and submit it to your lender at least 5 business days before your scheduled auction, your foreclosure is automatically postponed for up to 45 days. If you haven't sold by then, you can request one additional 45-day extension (90 days total).
Why This Matters for Your Equity
At foreclosure auction, homes typically sell for 50-70% of market value. Cash buyers who approach distressed homeowners often offer similar discounts. Here's what that looks like in real numbers:
| Sale Method | Typical Price | Your Equity (on $800K home with $500K owed) |
|---|---|---|
| Full Market Sale (AB 2424) | $800,000 | ~$260,000 after costs |
| Cash Buyer Offer | $560,000 (70%) | ~$50,000 |
| Foreclosure Auction | $480,000 (60%) | $0 (or surplus if lucky) |
The difference between a full market sale and a cash buyer offer on an $800,000 home could be over $200,000 in your pocket.
How to Use AB 2424
- Find a licensed broker experienced with pre-foreclosure sales
- Sign a listing agreement (this creates the legal protection)
- Submit to your lender at least 5 business days before auction
- Receive postponement (automatic 45 days, extendable to 90)
- Market and sell at full value on the open market
⚠️ Important Limitation
AB 2424 requires a listing agreement with a licensed real estate broker. HUD counselors and attorneys cannot trigger this protection. If you want to use AB 2424, you need a realtor.
For the complete breakdown including eligibility, documentation requirements, and step-by-step instructions, see: AB 2424 California: How to Get 90 Days to Sell at Full Market Value.
To understand why cash buyers offer discounted prices and how to evaluate their offers, see: Cash Buyers Offer 50-70%: Why AB 2424 Changes Everything.
Who Can Help You Stop Foreclosure
Different professionals solve different problems. Understanding what each can and cannot do will help you get the right help.
| Professional | What They Can Do | What They Can't Do |
|---|---|---|
| HUD Counselor | Free advice, help with modifications, lender communication | Legal representation, list your home for sale |
| Foreclosure Attorney | Legal defense, sue for lender violations, bankruptcy filing | List your home, trigger AB 2424 |
| Real Estate Broker | List your home, trigger AB 2424, market sale | Legal advice, court representation |
💡 My Take
There's no competition between these professionals. We solve different problems. Many homeowners work with all three at different stages. Start with a free HUD counselor if you're not sure what you need. If you believe your lender violated your rights, talk to an attorney. If you want to sell and preserve equity, that's where a realtor comes in. The key is knowing which problem you're trying to solve first.
For a detailed comparison of when you need each professional, see: Do You Need a Realtor or Attorney to Stop Foreclosure?
Want to Know Where You Stand?
I'm happy to take a look at your situation and help you understand which options make sense. Sometimes it's a quick call, sometimes it's more involved. Either way, you'll know more than you do now.
(213) 444-2225 • Confidential. No judgment. Real answers.
Free Foreclosure Help in Los Angeles & Orange County
You don't have to figure this out alone. Multiple organizations offer free foreclosure counseling and legal assistance in Southern California.
Los Angeles County
- LA County DCBA: Free foreclosure prevention counseling for property owners of 15 or fewer units
- Neighborhood Housing Services (NHSLA): HUD-certified counseling + Mortgage Relief Program 2.0 (up to $30,000)
- Legal Aid Foundation of LA (LAFLA): Free legal help for low-income residents | 800-399-4529
- Neighborhood Legal Services (NLSLA): Foreclosure defense and housing advocacy
Orange County
- Affordable Housing Clearinghouse: Free foreclosure counseling | (877) 990-5626
- NeighborWorks Orange County: HUD-certified housing counseling
- Fair Housing Council of OC: HUD-approved counseling services
Statewide Resources
- HUD Counselor Hotline: 800-569-4287
- CFPB Counselor Finder: consumerfinance.gov
- California Courts Self-Help: selfhelp.courts.ca.gov
For the complete directory with phone numbers, websites, and eligibility information, see: Los Angeles Foreclosure Help 2026: Free Resources and Your Legal Rights.
Your Rights Under California Law
California's Homeowner Bill of Rights provides important protections for homeowners facing foreclosure:
- 30-Day Contact Requirement: Your lender must try to contact you about alternatives at least 30 days before starting foreclosure
- No Dual Tracking: Your lender cannot foreclose while reviewing a complete loan modification application
- Single Point of Contact: You're entitled to one consistent contact person at your lender
- Written Denial Explanation: If your modification is denied, you must receive a written explanation
If your lender violates these rights: You may be able to stop the foreclosure or sue for damages. Courts can award up to $50,000 in penalties, or triple your actual damages. Talk to a foreclosure attorney if you believe your rights were violated.
Frequently Asked Questions
Ready to Explore Your Options?
Every foreclosure situation is different, but you don't have to figure it out alone. Whether you want to keep your home, sell and preserve your equity, or just understand what's possible, I'm here to help you think through it.
(213) 444-2225 • Confidential conversation. No pressure. Real answers.
