Behind on Your Mortgage in California? Every Option, Explained

If you’ve missed mortgage payments or just received a Notice of Default, it can feel like the house is already gone. It isn’t. California’s process has several steps between a missed payment and a trustee’s sale, and you have real options at each one. This guide explains the timeline, then walks through every option, including the ones that let you keep the house.

How much time you have

Most California home loans are secured by a deed of trust, so lenders usually foreclose without going to court. The law sets minimum waiting periods at each step:

Step	Minimum timing
Missed payments before the servicer can start foreclosure	More than 120 days
Servicer’s contact about options before a Notice of Default	At least 30 days
Notice of Default to Notice of Trustee’s Sale	At least 3 months
Notice of Trustee’s Sale to the sale	At least 20 days
Last day to reinstate the loan	5 business days before the sale

The 30-day contact rule applies to first mortgages on owner-occupied homes of one to four units. The servicer has to reach you, or make a real effort to, to discuss your situation and options before recording the Notice of Default. Altogether, at least three months and 20 days pass between the Notice of Default and the sale. Sale dates are often postponed, but don’t plan around that.

Reinstate the loan

Reinstating means paying everything you’re behind on, plus the fees and costs the law allows, so the loan continues as if you’d never missed a payment. You can reinstate any time from when the Notice of Default is recorded until five business days before the sale. Ask the servicer for a reinstatement figure in writing, since it grows each month.

Repayment plan or forbearance

If you can afford your regular payment again but can’t pay the arrears in one lump sum, a repayment plan spreads the past-due amount over several months on top of your normal payment.

Forbearance works for a temporary hardship, like a gap between jobs. The servicer pauses or reduces your payments for a set period. It isn’t forgiveness: the skipped amount still has to be repaid, and how depends on the plan you agree to.

Loan modification

A modification permanently changes the loan’s terms, such as the interest rate, the length of the loan or how the missed payments are handled, to make the payment affordable. Many start with a trial period of reduced payments.

Apply early, with every document the servicer asks for. Under federal rules, if your servicer receives a complete application more than 37 days before a scheduled sale, it generally can’t hold the sale until it has decided on your application. That protection ends if you’re turned down and any appeal is over, if you reject the options offered or if you don’t keep up with an agreed plan.

Short sale

If you owe more than the house is worth, a short sale lets you sell for less than the loan balance with the lender’s approval. In California, when the lender agrees in writing to a short sale of a home of one to four units, it can’t come after you for the shortfall later. Every lender with a lien has to approve, which takes time. Our guide to short sales versus foreclosure covers the tradeoffs.

Deed in lieu of foreclosure

With a deed in lieu, you give the house back to the lender voluntarily, and in return it releases you from the mortgage. The lender has to agree. It avoids a public sale, and for a conventional loan the wait to buy again is four years instead of seven.

Bankruptcy

Filing for bankruptcy triggers an automatic stay that halts most collection actions, including a foreclosure, as soon as the petition is filed. Chapter 13 lets you catch up on missed mortgage payments through a plan that lasts three to five years, as long as you also make each new payment on time. Bankruptcy has costs and lasting effects, including up to ten years on your credit report, so talk with a bankruptcy attorney before deciding.

Sell the house

If you have equity and can’t realistically catch up, selling usually beats waiting. You own the house until the trustee’s sale, so you can sell any time before it. The sale pays the loan off at closing and keeps a foreclosure off your record. Whatever is left after the payoff goes to you.

Since 2025, California law also gives owners who list with an agent more time. If the trustee receives a listing agreement with a California-licensed real estate broker for a public listing of the house at least five business days before the sale, sent by certified mail or a tracked overnight courier, the trustee must postpone the sale at least 45 days. After that, a signed purchase contract delivered the same way at least five business days before the new date can earn one more postponement, to at least 45 days after the trustee receives it, but only if the price covers all the loans and liens recorded against the house. Each postponement can be used once, and a housing counselor or attorney can help you get the details right.

A cash sale is faster but usually pays less than a listing. EZ Home Offer buys houses as-is across Alameda County, with a written offer usually within 24 hours and closing in as little as 3 days once title is clear. Signing with any buyer doesn’t move the sale date by itself, so the closing has to happen before the sale. Our page on selling a house in foreclosure explains how a cash sale fits.

Your rights if you sell to an investor

California’s Home Equity Sales Contract Act protects you if a Notice of Default has been recorded on the home you live in and you sell it to an investor. You can cancel the contract until midnight of the fifth business day after you sign, or until 8 a.m. on the day of the trustee’s sale, whichever comes first. Under this law, Saturdays count as business days. Until that cancellation period ends, the buyer can’t have you sign a deed, record any document you signed or pay you anything.

Watch out for foreclosure scams

HUD warns about companies that promise a quick fix and then get homeowners to sign over their title. In California, a foreclosure consultant can’t collect any fee until it has fully performed every service it promised, and can’t take a power of attorney or an interest in your home. HUD-approved housing counselors can’t charge you to help you explore your options.

Where to start

Open every letter and write down the dates on any Notice of Default or Notice of Trustee’s Sale.
Call a HUD-approved housing counselor for free help at (800) 569-4287, or find one at hud.gov/findacounselor (opens in a new tab).
Ask your servicer for a loss mitigation application and send it back complete, as early as you can.
If selling might make sense, find out what the house is worth and what you owe now, while you have the most time.

If you’re weighing what a foreclosure would mean for your credit and taxes, see how a foreclosure affects you in California.

Sources

General information about California rules as of October 3, 2026, not legal, tax or financial advice. Laws change and every situation is different, so check the details with an attorney, CPA or other professional.