California foreclosure starts climb as Los Angeles homeowners get options after a notice of default

California logged 2,540 foreclosure starts in July 2026, making the state one of the hardest hit in the country as homeowners face notices of default. In Los Angeles, a short-sale and foreclosure practice says owners still have time to act before auction and may be able to sell, reinstate or delay a sale at no cost in some cases.

Why it matters: - California homeowners facing a Notice of Default usually still have time to protect equity before a foreclosure sale is scheduled. - July 2026 foreclosure starts reached 2,540 in California, the third-highest total in the U.S., signaling rising pressure on homeowners. - A timely response can preserve credit, prevent auction, or open the door to a short sale when the loan balance exceeds the home’s value.

What happened: - California logged 2,540 foreclosure starts in July 2026, according to ATTOM's July 2026 U.S. Foreclosure Market Report. - Foreclosure filings nationwide rose 10 percent from a year earlier. - Most California foreclosure cases begin with a Notice of Default recorded against the home. - The Los Angeles short sale and foreclosure practice We Sell Houses LA - Short Sale & Foreclosure outlined options for homeowners after a Notice of Default.

The details: - A Notice of Default is the first formal step in California’s nonjudicial foreclosure process, but it is not a sale date. - State law generally creates a waiting period of about three months before a sale can be scheduled. - During that period, homeowners can reinstate the loan by catching up missed payments and fees. - Homeowners can also negotiate a repayment plan or loan modification with the mortgage company. - A homeowner with equity can list the property, sell through escrow, pay off the loan, and keep the difference. - A short sale is available when the mortgage balance is higher than the home’s value. - In a short sale, the lender’s approval allows the homeowner to sell and settle the debt without a foreclosure on the record. - Guidelines for short-sale approval depend on the loan type, including Fannie Mae, Freddie Mac, FHA, or VA. - The lender pays the commission in a short sale, so the seller pays nothing out of pocket. - Nick Hedberg, a licensed California real estate agent with Beverly & Company, offers free, confidential consultations for homeowners from a first missed payment to a scheduled auction. - The practice published a step-by-step guide at the notice-of-default timeline guide covering the 90-day process week by week.

Between the lines: - The message is less about panic and more about timing: homeowners who act during the default window keep more control over the outcome. - Conventional sales remain the simplest exit when equity exists, because the main challenge is speed rather than eligibility. - California’s AB 2424 gives homeowners another lever by postponing a scheduled auction when they list with a licensed agent and deliver the agreement to the foreclosure trustee at least five business days before sale. - If a purchase agreement is later delivered, the law allows an additional postponement. - The law favors early engagement with a licensed agent instead of waiting until the final days before auction.

What’s next: - Homeowners who receive a Notice of Default can still pursue reinstatement, a loan workout, a traditional sale or a short sale before auction. - Los Angeles homeowners can seek a free consultation from We Sell Houses LA - Short Sale & Foreclosure to map out the next step. - The foreclosure timeline will continue to depend on how quickly the homeowner acts and whether the lender approves any workout or sale.

The bottom line: - A Notice of Default is a warning, not an immediate eviction order, and California law still leaves room for homeowners to stop a foreclosure sale if they move fast.