California Consumer Protection, Prohibited Conduct, and Foreclosure Rules
Homeowner Bill of Rights
The HBOR (Civil Code Section 2923.5 and following) protects first-lien mortgages on owner-occupied residential property of one to four units. Before recording a Notice of Default, the servicer must make contact - in person or by telephone - at least 30 days earlier, or make a diligent effort, to assess the borrower's financial situation and discuss alternatives. The Notice of Default must carry a declaration of compliance. Dual tracking is prohibited: no Notice of Default, Notice of Trustee's Sale, or trustee's sale while a complete first-lien loan modification application is pending, and after a denial the servicer generally must wait at least 31 days before recording.
Foreclosure timeline
A Notice of Default may not be recorded until the borrower is at least three months delinquent. A Notice of Trustee's Sale may not be published until three months after the Notice of Default, and the sale may not occur until at least 20 days after the Notice of Trustee's Sale. A nonjudicial trustee's sale extinguishes the debt: no deficiency judgment and no post-sale right of redemption.
Prohibited conduct
Beyond HBOR, California prohibits unlicensed origination, misrepresentation and concealment, kickbacks and unearned fees, and advance fees for loan modification or foreclosure consulting services. The DFPI also enforces UDAAP standards under the California Consumer Financial Protection Law, and the Rosenthal Act governs debt collection conduct.
Traps
HBOR does not cover investment property or junior liens. Questions often confuse judicial foreclosure (redemption rights, possible deficiency) with nonjudicial trustee's sale (neither). Another trap: treating the 30-day borrower-contact rule and the three-month delinquency rule as the same requirement - they are separate.
Rule of thumb: contact 30 days, delinquency 3 months, publication 3 months after the NOD, sale 20 days after the notice.