AB 2424: How California's New Law Can Buy You Time to Sell Before Foreclosure

If your home is scheduled for a foreclosure sale in California, a law that took effect on January 1, 2025 may give you something you badly need: time. Assembly Bill 2424 (AB 2424) lets many homeowners postpone a trustee sale so they can sell the home themselves and keep their equity, instead of losing the home at auction.

Here's what it does, who it helps and how to use it.

The short version

• If you list your home for sale with a licensed real estate broker and get the listing agreement to the trustee at least 5 business days before the sale date, the sale must be postponed at least 45 days.
• If you then get a signed offer from a buyer and deliver the purchase agreement to the trustee at least 5 business days before the (new) sale date, you can get another postponement of at least 45 days to close escrow.
• Together, that can mean 90 days or more to sell on the open market.

Who it applies to

AB 2424 covers foreclosures on residential property with one to four units. Some parts of the law are limited to first mortgages or owner-occupied homes, so it's important to look at your specific loan and property.

Why it matters

At a foreclosure auction, a home often sells for far less than it's worth, and the owner can walk away with nothing. When you sell on the open market instead, buyers compete, the home is more likely to sell near market value, and any equity after the loan and costs are paid goes to you, not to an auction buyer.

AB 2424 also added protections at the auction itself. In many cases the lender must get a fair market value estimate before the first sale, and the property can't sell at the first auction for less than 67% of that value. If no one bids at least that much, the sale has to be postponed at least seven more days.

How to use it: step by step

1. Don't wait for the sale date. Find your trustee sale date on the Notice of Trustee's Sale. You need time to sign a listing and deliver it at least 5 business days before that date.
2. Sign a listing agreement with a licensed California real estate broker. The home should actually be marketed for sale, typically on the MLS.
3. Deliver the listing agreement to the trustee (the company named on your Notice of Trustee's Sale) in a way you can prove, such as tracked mail or confirmed email, and keep copies.
4. Market the home and accept an offer. A short sale may also be possible if you owe more than the home is worth, but that needs the lender's approval.
5. Deliver the signed purchase agreement to the trustee at least 5 business days before the postponed sale date to get the second postponement.
6. Close escrow within the extended time.

Each postponement is generally available once per foreclosure, so timing and paperwork matter.

What AB 2424 doesn't do

• It doesn't stop the foreclosure permanently or erase the debt.
• It doesn't replace a loan modification, reinstatement or bankruptcy, which may be better options for some homeowners.
• It doesn't apply if the paperwork arrives late or doesn't meet the law's requirements.

Can I still keep my home?

Possibly. If you can catch up, refinance or qualify for a modification, those can still be options. Selling is the right choice for many families, but not all. A HUD-approved housing counselor (free) or a real estate attorney can help you compare every option.

How I can help

I'm a licensed California broker and a Certified Short Sale Expert. If you have a sale date, I can list your home quickly, help you get the listing agreement to the trustee on time, and work to sell for the best price, including a short sale if you owe more than the home is worth. The sooner you call, the more options you have.

Call or text 949-306-9260 or send me a confidential message. Hablo español.

This article is general information, not legal advice. Foreclosure laws are complex and your situation may be different. Talk with a real estate attorney about your rights.