California Foreclosure Report 2026

Updated October 2026. Foreclosure activity in California is rising, though the state’s rate remains slightly below the national average. ATTOM counted 21,543 California properties with a foreclosure filing in the first half of 2026, up 12.8% from a year earlier, and 2,565 new foreclosure starts in August 2026 alone. ATTOM also found that 45.6% of mortgaged California homes were equity-rich in Q2 2026, so many owners who fall behind still have substantial value to protect. This report covers the numbers, the trustee-sale process and the options owners generally have before a sale.

How much foreclosure activity is California seeing in 2026?

California is seeing more foreclosure activity than a year ago, but a moderate amount for its size. ATTOM ranked California 18th among states by foreclosure rate in the first half of 2026, with a filing on 1 in every 680 housing units versus 1 in 632 nationally, and the state’s 12.8% annual increase was smaller than the national 21.3%.

Because the state is large, its raw counts are high. According to ATTOM, lenders started foreclosure on 16,040 California properties in the first half of 2026, the third-most of any state, and completed 2,644 foreclosures (REOs), up 47% from 1,799 a year earlier. A filing marks a stage, not an outcome: owners who receive a notice of default can still reinstate, modify the loan or sell.

Where in California is foreclosure activity highest?

ATTOM’s public releases name only the worst-ranked metros, and two California metros made those lists in its midyear and July 2026 reports. Bakersfield had a filing on 1 in every 616 housing units in Q2 2026, the fourth-worst rate among 110 metros with at least 500,000 residents, and Vallejo ranked fourth among metros with at least 200,000 residents in July 2026, at 1 in 1,432. Equity cushions vary too: according to ATTOM, San Jose had the highest equity-rich share of any large U.S. metro in Q2 2026 (59.1%), while Fresno had one of the lowest (18.1%) and the second-highest seriously underwater share (10.9%), so owners there who fall behind may have fewer options.

How does foreclosure work in California?

When the deed of trust contains a power of sale, the lender can foreclose without going to court; the notice of default warns that the home “may be sold without any court action” (Civil Code §2924c). Key steps:

Sale dates can move: postponements can come from a court order, a legal stay such as bankruptcy, an owner-lender agreement or the trustee’s discretion (§2924g), and a postponement of 10 or more business days requires written notice of the new date to the borrower within five business days (§2924).

What did AB 2424 change?

AB 2424, signed in September 2024 and in effect since January 1, 2025, made these changes for residential property with one to four units:

• Listing postponement. If the trustee receives a listing agreement with a California-licensed broker for a publicly marketed listing, by certified mail or tracked overnight courier, at least five business days before the sale, the sale is delayed an additional 45 days, once; the reinstatement deadline moves with it (§2924f).
• Purchase-agreement postponement. A signed purchase agreement, delivered the same way at least five business days before the new date, postpones the sale to at least 45 days after receipt, once. The price must at least equal all recorded liens, and the agreement must name the buyer, price and closing date and show escrow’s acceptance (§2924f).
• Price floor. For first-lien loans, the home cannot be sold at the first sale where bids are taken for less than 67% of a fair market value estimate the lender must give the trustee; if it does not sell, the sale is postponed at least seven days and can then go to the highest bidder (§2924f, as clarified by AB 1521 from January 1, 2026).
• Third-party copies. Servicers must tell borrowers that a relative, HUD-certified counselor or attorney can record a request for copies of the default and sale notices (§2923.5, §2923.55).

Because the price must cover every recorded lien, the purchase-agreement rule mainly helps owners with equity.

What can owners do before the trustee’s sale?

Several things, and more options stay open the earlier an owner acts. A HUD-approved housing counselor, often available at little or no cost through the CFPB’s counselor search, can help compare them.

• Reinstate. Pay the missed payments plus permitted costs, generally until five business days before the sale; the lender will itemize the amount on written request (§2924c).
• Modify the loan. A complete application for a covered first-lien modification, submitted at least five business days before a scheduled sale, generally pauses the foreclosure during review (§2923.6, §2924.18).
• Refinance. Possible for some owners with enough equity and income.
• Sell. The notice of default says the owner may sell “provided the sale is concluded prior to the conclusion of the foreclosure” (§2924c). Escrow pays the liens, and the owner keeps the remaining equity.
• Short sale. If the home is worth less than the debt, the lender may accept less than the full balance.
• Bankruptcy. A bankruptcy stay postpones the sale until the stay ends (§2924g); talk with a bankruptcy attorney first.

Be wary of anyone charging up front to negotiate a loan modification; California generally bars such fees until every promised service is performed (Civil Code §2944.7).

Why does equity matter in a foreclosure?

Equity decides who keeps the home’s value. After a trustee’s sale, the proceeds go first to sale costs, then to the foreclosing lender, then to junior lienholders, and only then to the former owner (Civil Code §2924k), and bidders, not the owner, set the price. ATTOM found 45.6% of mortgaged California homes were equity-rich in Q2 2026 (loans of no more than half the home’s value), versus 41.1% nationally, and 2.3% were seriously underwater (loans at least 25% above value), versus 3.2%. The cushion is thinner than a year earlier, when ATTOM put those California shares at 56.9% and 1.4%. Owners with substantial equity generally keep more by reinstating or selling before the auction.

How does selling before the trustee’s sale work?

Like any California home sale, with a hard deadline:

• Get the numbers. Confirm the sale date with the trustee and have escrow request a payoff demand. Under Civil Code §2943, the lender generally must deliver one within 21 days of a written request, but after a notice of default that applies only to requests received before the notice of sale is first published, and a request does not move the sale date.
• Open escrow early. Escrow and title identify every lien and pay lienholders at closing.
• Choose how to sell. Listing with an agent reaches the most buyers, and the AB 2424 postponements may add time. Selling as-is to a cash buyer is another option that skips financing contingencies, often at a lower price than a fully marketed listing. Compare net proceeds.
• Ask about a postponement. The lender may agree to one (§2924g) but does not have to.

If you live in the home and a notice of default is recorded, the Home Equity Sales Contract Act generally lets you cancel a sale contract with an investor buyer until midnight of the fifth business day after signing or 8 a.m. on the scheduled sale day, whichever comes first (Civil Code §1695.4). Our selling a house in foreclosure page explains how a direct sale works.

Frequently asked questions

Methodology and sources

Foreclosure data come from ATTOM’s Midyear 2026, July 2026 and August 2026 U.S. Foreclosure Market Reports and its July 31, 2026 #figuresfriday post (REO change). ATTOM counts properties with at least one filing in a period (default notices, scheduled auctions or bank repossessions); its public releases omit California’s August rate and most California metro rates. Equity data come from ATTOM’s Q2 2026 Home Equity & Underwater Report and seriously underwater state ranking. Legal rules were read on the California Legislature’s official site in October 2026: Civil Code §2923.5, §2923.55, §2923.6, §2924, §2924c, §2924f, §2924g, §2924k, §2924m, §2924.15, §2924.18, §2943, §2944.7 and §1695.4; Code of Civil Procedure §580d and §580e; and the chaptered texts of AB 2424 (2024) and AB 1521 (2025). Counselor search: CFPB.

Related research: all Cash Home Buyers CA reports, plus our reports on free-and-clear homes, mortgage rate lock-in, all-cash home buyers and as-is home sales. If you are weighing a sale, see selling a house in foreclosure, selling during bankruptcy, how our process works and where we buy.