New California Law Gives Homeowners Facing Foreclosures Extra Time

Foreclosures in California have started to rise again, and many families are feeling the pressure. If you recently received a notice, it is easy to assume you are out of time. But a new rule that took effect early this year may give you a real chance to slow things down and make a plan.

What is California Assembly Bill 2424? Known as AB 2424, this new bill gives homeowners an added 45-day window if the home is listed correctly and the right paperwork is sent. It also adds pricing protections and requires clearer communication from lenders.

Here is a simple breakdown of what the law covers:

You may get a 45-day pause when your home is listed. If your home is on the MLS and you send the signed listing agreement to the trustee at least five business days before the sale date, the trustee must postpone the auction for 45 days.

This must go to the trustee, not the lender. It must also be sent by certified or trackable delivery. Your home must be listed on the MLS for at least five days before the scheduled sale.

If you get a buyer, you can delay the sale again. If a buyer submits an offer and you send the signed purchase agreement, the trustee must postpone the sale again to allow escrow to close. This gives you time to complete a normal transaction instead of rushing.

The lender must share the fair market value before the sale. At least ten days before the auction, the lender must provide a fair market value. That number matters because the home cannot be sold for less than 67% of that amount at the first auction.

If there are no bids during that first week, the rule changes. One week later, the home can be sold to the highest bidder.

You can add a backup contact. You can choose a family member, attorney, or real estate professional to also receive foreclosure notices. This helps prevent missed mail or overlooked deadlines during a very stressful time.

Lenders must communicate more clearly. AB 2424 now requires lenders to present possible alternatives in simple terms, such as loan modification or forbearance. They must provide an easy-to-access website link and a phone line for borrowers who want help understanding their options.

What is forbearance? It’s a temporary break or reduction in payments due to hardship. You still owe the full amount, and interest usually continues to build, but it can give you time to recover from a temporary setback.

No one wants to face foreclosure, but it is helpful to know what protections exist. AB 2424 gives you added time, clearer pricing, and better communication. If you have questions or want guidance, reach out. Contact me at (818) 903-5854 or [email protected]. You do not have to navigate this alone.