- Who sends it
- Your mortgage servicer, if it is one of the larger servicers covered by Civil Code section 2924.9
- What it starts
- Nothing by itself, but your application now decides whether the sale can go forward
- Do this first
- Ask for the application in writing and send it back complete, in a way you can prove
What this letter is in California
Civil Code section 2924.9 says that within 5 business days after recording a Notice of Default, a mortgage servicer that offers one or more foreclosure prevention alternatives must send you a written letter. It must say that you may be evaluated for an alternative, whether you need to submit an application to be considered, and how to get the application.
It applies only to a first mortgage on a home of 1 to 4 units that is your principal residence (Civil Code section 2924.15). Smaller servicers, those that foreclosed on 175 or fewer California homes in the past year, do not have to send it. If you have already gone all the way through the servicer's first lien loan modification process, the servicer does not have to send it either.
What it does and does not mean
- It is not an offer. It tells you how to ask. The servicer does not have to approve any option.
- It does not stop the foreclosure. The 3-month clock from the Notice of Default keeps running.
- If you send a complete first lien loan modification application at least 5 business days before a scheduled sale, the servicer cannot record a Notice of Sale or hold the sale while it is pending (Civil Code sections 2923.6 and 2924.18).
- If you do not get this letter, you can still ask for an application. Call your servicer and ask in writing.
Deadlines and how to count them
- The servicer has 5 business days after recording the Notice of Default to send the letter. Business days skip weekends and holidays.
- When you send any document for a first lien loan modification, the servicer must acknowledge it in writing within 5 business days. The first acknowledgment must give an estimate of when it will decide, any deadlines for missing papers, and any expiration dates for documents you sent (Civil Code section 2924.10).
- Your application counts as complete when you have supplied every document the servicer asked for within the reasonable time it set (Civil Code section 2924.10(b)).
- The California cutoff for the sale pause is at least 5 business days before the scheduled sale. The federal review rule is more protective if your complete application arrives more than 37 days before the sale, so aim for that.
What to do this week
- Call the number in the letter and ask for the application package, or download it if the letter gives a website.
- Gather proof of income, bank statements, tax returns and a hardship letter, and send everything the servicer lists.
- Keep copies and proof of delivery. Write down the date of every call and the name of the person you spoke with.
- With larger servicers you get a single point of contact, one person or team who must know your file (Civil Code section 2923.7). Ask who it is.
- Get free help filling out the forms from a HUD-approved housing counselor at (800) 569-4287.
If the servicer gets it wrong
If a servicer breaks these rules in a material way, you can ask a court to stop the sale before the trustee's deed is recorded (Civil Code section 2924.12). That takes a lawsuit, so talk to legal aid through LawHelpCA or a licensed attorney. You can also complain to the Department of Financial Protection and Innovation (DFPI) at 1-866-275-2677 or report a Homeowner Bill of Rights problem to the California Attorney General. See California foreclosure help and how to stop a foreclosure in California.
The rest of the California process
See how foreclosure works in California, the timeline, ways to stop it and free help in California, or read the national guide to this letter.
Common questions
Does every California servicer have to send this letter?
No. Civil Code section 2924.9 does not apply to smaller servicers that foreclosed on 175 or fewer California homes in the past year, and it covers only first mortgages on owner-occupied homes of 1 to 4 units. You can still ask any servicer for an application.
What is the deadline to apply so my California sale is paused?
A complete first lien loan modification application must reach the servicer at least 5 business days before a scheduled sale for the California pause to apply (Civil Code sections 2923.6 and 2924.18). Apply much earlier if you can.
How do I know my California application is complete?
It is complete when you have sent every document the servicer asked for within the reasonable time it set (Civil Code section 2924.10). The servicer must tell you in writing within 5 business days what it received and what is missing.
Other California letters
- Notice of DefaultIn California, a recorded Notice of Default is the formal start of a trustee (out of court) foreclosure. It is not a sale and not an eviction. At least 3 months must pass before a Notice of Sale can set an auction, and you can catch up until 5 business days before the sale date.
- Notice of SaleA California Notice of Sale sets the date, time and place of the trustee's sale (auction) of your home. It must be mailed, posted on your door, recorded and published at least 20 days before the sale. You may still have options, and most end 5 business days before the sale.
- Notice of surplus proceeds after a trustee's saleIf your home sold at a trustee's sale for more than the sale costs and the foreclosed loan, the trustee must mail a notice within 30 days of signing the trustee's deed. Your signed written claim must reach the trustee within 30 days after the notice is sent. You can file it yourself for free.
- 3-day notice to quit after a foreclosure saleAfter a trustee's sale, the new owner cannot change the locks. It must first serve a former owner with a written 3-day notice to quit. If you stay past it, the owner must file an eviction (unlawful detainer) case in court, and only the sheriff can remove you after a judgment.
- Summons, Unlawful Detainer, Eviction (form SUM-130)If you stayed after the 3-day notice, the new owner can sue to evict you in an unlawful detainer case. You usually have 10 court days after you are served to file a written response. If you do nothing, the owner can win by default and the sheriff can lock you out after a 5-day notice.
Sources
- Cal. Civ. Code § 2924.9 (letter after a notice of default)
- Cal. Civ. Code § 2924.10 (written acknowledgment)
- Cal. Civ. Code, Mortgages in General, §§ 2920 to 2944.10 (includes §§ 2923.6, 2923.7, 2924.12, 2924.15, 2924.18)
- California Attorney General: California Homeowner Bill of Rights
- California Courts Self-Help Guide: Your rights in a nonjudicial foreclosure