Foreclosure FAQs

A: If you are a tenant and the property you rent goes into foreclosure, the new owner must honor the existing lease. BUT when you have a month-to-month lease, or when the people occupying the property are the owners who are being foreclosed on, the new owner can evict the tenants or former owners. In these cases, the new owner may either (1) offer the existing tenants a new lease agreement or (2) begin eviction proceedings. If the new owner chooses to evict existing tenants, the new owner must give them at least 90 days’ notice before starting eviction proceedings.

Tenants in some California cities may still have a right to stay in their buildings. Cities with eviction or rent control laws prohibit new owners from using foreclosure as a reason for evicting tenants.

There are other rights that tenants have in eviction cases done after a foreclosure. If a tenant is not named in the complaint for the eviction, he or she may be able to challenge the eviction at any time during the case or even after the judgment for eviction is made. 

There are resources for tenants to get more information about their options. Tenants may call the Tenant Rights Hotline at 1-888-495-8020. And read the information and resources at Tenants Together's Law & Resources web pages.

Learn more details and read the federal law protecting tenants in foreclosures.

If you need additional information, talk to a lawyer. Click for help finding a lawyer.

A: Tenants can record, in their county recorder’s office, a form called a Request for Notice, asking that they be notified of any foreclosure proceedings. This way the tenant will receive a copy of the Notice of Default and Notice of Sale and know the status of the foreclosure. You can buy a Request for Notice at stores that sell legal forms or get 1 from the customer service department of a title company.

A: Whoever buys your home cannot just change the locks to the home. The new owner must serve you with a 3-day written notice to “quit” (move out), and then must take you through the formal eviction process in court in order to get possession of the home. That process typically takes several weeks.

Click to learn more about the eviction process.

A: It depends. The new owner must honor the existing lease. BUT in month-to-month tenancies or when you (as the owner/landlord) also live in the building that is being foreclosed, the new owner can evict the tenants or you. In these cases, the new owner may either (1) offer the existing tenants a new lease or rental agreement or (2) begin eviction proceedings. If the new owner chooses to evict existing tenants (other than you), the new owner must give them at least 90 days’ notice before starting eviction proceedings.

Tenants in some California cities may still have a right to stay in their buildings. Cities with eviction or rent control laws prohibit new owners from using foreclosure as a reason for evicting tenants.

There are other rights that tenants have in eviction cases done after a foreclosure. If a tenant is not named in the complaint for the eviction, he or she may be able to challenge the eviction at any time during the case or even after the judgment for eviction is made.

There are resources for tenants to get more information about their options. Tenants may call the Tenant Rights Hotline at 1-888-495-8020. And read the information and resources at Tenants Together's Law & Resources web pages.

If you need additional information, talk to a lawyer. Click for help finding a lawyer.

A: It is the clause in a deed of trust or mortgage in which the borrower pre-authorizes the sale of the property to pay off the balance on a loan if the borrower defaults (fails to make the loan payment when due).

The power given to sell the property is generally given to the trustee who acts on behalf of the beneficiary (lender) by recording and sending Notice of Default and Notice of Sale.

A: It means that the lender can get a money judgment from the court for the difference between the total amount the borrower owed (including penalties, fees, and costs) and the amount that the property was sold for at the auction.

When a lender uses the nonjudicial foreclosure process against a borrower who fails to pay on a mortgage loan for his or her primary residence, the lender gives up the right to collect a deficiency judgment against the borrower. In a judicial foreclosure, the lender may have this right. But most lenders prefer the nonjudicial foreclosure process anyway because it is faster and less costly.

A: ForeclosureInfoCA.org: A project of the Public Interest Clearinghouse and the State Bar of California, this site can direct you to legal assistance, advice on avoiding foreclosure, and information on buying a home.

A Guide to Mortgage Resources in California: This site, by the California Department of Real Estate, provides information on buying and owning a home, as well as how to look for help with a current mortgage.

Housing and Economic Rights Advocates:  Has consumer pamphlets, tips, and information to help you be better informed about foreclosure, preventing foreclosure, working with lenders, and other resources.

Tenants Together's Law & Resources: Information to help you know your rights, answers to frequently asked questions and resources to help you be better informed about foreclosure and your rights as a tenant in a foreclosure.

U.S. Department of Housing and Urban Development (HUD): The Department of Housing and Urban Development’s guide to avoiding foreclosure contains links that can help you find a local HUD-certified housing counselor, learn about refinancing options, and understand the steps homeowners can take to avoid foreclosure.