Foreclosure  ·  October 31, 2026

Wrongful Foreclosure in California and the Tender Rule

The short answer

California treats a properly conducted nonjudicial foreclosure sale as final, but a sale can be set aside, or support damages, in limited circumstances. To set aside a trustee's sale, a borrower generally must show:

1. An illegal, fraudulent or willfully oppressive sale;
2. Prejudice or harm to the person attacking it; and
3. Tender of the secured debt, or a reason tender is excused.

(Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89.)

Tender is a significant hurdle, but the courts recognize exceptions, including where the sale or the assignment behind it was void rather than voidable. Separately, the Homeowner Bill of Rights gives borrowers statutory remedies for certain servicer violations, most of them limited to owner-occupants, including an injunction before the trustee's deed is recorded. A sale to a bona fide purchaser is much harder to undo than a sale back to the lender, so timing matters.

What makes a foreclosure wrongful in California?

The elements

Lona v. Citibank states the three elements of an action to set aside a trustee's sale: "(1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale"; (2) "the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed"; and (3) "the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering."

Damages as well as unwinding

Wrongful foreclosure can also support a tort claim for damages. In Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, the court held that "the measure of damages is the familiar measure of tort damages: all proximately caused damages," and that wrongful foreclosure "may also result in emotional distress." The court also cautioned that "mere technical violations of the foreclosure process will not give rise to a tort claim."

A strict statutory scheme

The courts start from the premise that the statutes control. "The comprehensive statutory framework established to govern nonjudicial foreclosure sales is intended to be exhaustive." (Moeller v. Lien (1994) 25 Cal.App.4th 822, 834.) The scheme is designed in part "to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser." (Id. at p. 830.) Our article on judicial versus non-judicial foreclosure explains how that framework works before the sale.

Do I have to pay off the loan to challenge a foreclosure sale?

The rule

Generally, yes. "A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust." (Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112.) The tender must be real: if the person offering it "is without the money necessary to make the offer good and knows it," then "the tender is without legal force or effect." (Ibid., quoting earlier authority.) In Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, the court held that borrowers claiming irregularities in the sale procedure "are required to allege tender of the amount of United's secured indebtedness."

The reasoning, as FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018 explained, is that a party who could not have paid the debt even under a proper sale process cannot show damage caused by the irregularities. (The plaintiff there was a junior lienholder.)

The exceptions

Lona identifies four situations in which tender is not required:

1. "First, if the borrower's action attacks the validity of the underlying debt."
2. "Second, a tender will not be required when the person who seeks to set aside the trustee's sale has a counterclaim" that offsets the amount due.
3. "Third, a tender may not be required where it would be inequitable to impose such a condition."
4. "Fourth, no tender will be required when the trustor is not required to rely on equity to attack the deed," because the deed is void on its face.

Lona itself reversed a summary judgment for the lender and servicer. The borrower alleged the loans were unconscionable, an attack on the validity of the debt, and the motion did not address that exception to the tender rule.

Void versus voidable

In Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, the Supreme Court held that a borrower whose home has been sold "has standing to claim a nonjudicial foreclosure was wrongful" where an assignment of the deed of trust "was not merely voidable but void, depriving the foreclosing party of any legitimate authority to order a trustee's sale." The Court called its ruling "a narrow one" and expressly declined to decide whether the borrower must allege tender.

The Court of Appeal answered the tender question for void sales in Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552: "Because Sciarratta properly alleged the foreclosure was void and not merely voidable, tender was not required to state a cause of action for quiet title or for cancellation of instruments." The court also held that a homeowner foreclosed on "by one with no right to do so—by those facts alone—sustains prejudice or harm."

The distinction cuts both ways. In Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, the court held that a borrower could not bring a challenge to an assignment before any sale, observing that "Yvanova's ruling is expressly limited to the post-foreclosure context," and that the late securitization assignment at issue was "merely voidable" under New York law. A defect of that kind makes an assignment voidable at most, which leaves the borrower to the tender rule.

Can a sale to a third-party buyer be undone?

The bona fide purchaser rule

Once the property is sold at auction to an outside buyer who paid value without notice of a problem, setting the sale aside becomes much harder. Civil Code section 2924(c) makes the trustee's deed recital of compliance with the notice requirements "prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and without notice."

The courts have read that protection in context. In Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, the court said the presumption "applies only to challenges to statutory compliance with respect to default and sales notices," but began from "the general proposition," quoting a leading treatise, that a trustor cannot set aside a sale to a bona fide purchaser "based on irregularities in the foreclosure sale process, except in the case of fraud." In Moeller, the court held that a trustor could not use the relief-from-forfeiture statute (Civ. Code, § 3275) to set aside a sale to a bona fide purchaser, and noted that a trustor precluded from setting aside a sale "may recover damages from the trustee." And in Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, the Supreme Court, quoting Moeller, reiterated that "the conclusive presumption does not apply until a trustee's deed is delivered," and held that a trustee could void a sale before delivering the deed.

When the sale becomes final

Under Civil Code section 2924h(c) as currently written, for purposes of that subdivision a trustee's sale is "deemed final upon the acceptance of the last and highest bid," and is deemed perfected as of 8 a.m. on the date of sale if the trustee's deed is recorded within 21 calendar days after the sale, or within 60 calendar days after the sale when a notice of intent to bid is submitted under section 2924m. For one-to-four-unit residential property, Applegate v. Carrington Foreclosure Services, LLC (2025) 112 Cal.App.5th 356 explained that, under section 2924m as currently written, such a sale is deemed final at the end of the auction only if a prospective owner-occupant is the last and highest bidder, and held that the trustee could rescind (in effect, postpone) the sale at the beneficiary's instruction before it became final. The rules for those post-sale bidding windows change on January 1, 2027; our article on AB 1957 and foreclosure auctions covers them.

The practical point: problems with a foreclosure are easiest to address before the sale, next easiest before the trustee's deed is delivered and recorded, and hardest after the property is in the hands of a bona fide purchaser.

What does the Homeowner Bill of Rights add?

Most of the Homeowner Bill of Rights duties enforced through section 2924.12 apply only to a first lien mortgage or deed of trust secured by owner-occupied residential real property containing no more than four dwelling units (Civ. Code, § 2924.15, subd. (a)). Section 2924.17 is not on that list. For material violations of the sections listed in section 2924.12, including section 2924.17, the statute gives the borrower remedies that do not depend on the common-law elements:

• Before the trustee's deed is recorded, the borrower may seek an injunction for a material violation of sections 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11 or 2924.17. (Civ. Code, § 2924.12, subd. (a)(1).)
• After the deed is recorded, the servicer, mortgagee, trustee, beneficiary or agent is liable for actual economic damages for a material violation not corrected before recording, and if the violation was intentional, reckless or willful, the court may award "the greater of treble actual damages or statutory damages of fifty thousand dollars ($50,000)." (§ 2924.12, subd. (b).)
• No liability for a violation corrected before the trustee's deed is recorded. (§ 2924.12, subd. (c).)
• Attorney fees. "A court may award a prevailing borrower reasonable attorney's fees and costs in an action brought pursuant to this section." (§ 2924.12, subd. (h).)
• Bona fide purchasers are protected. "No violation of this article shall affect the validity of a sale in favor of a bona fide purchaser and any of its encumbrancers for value without notice." (§ 2924.12, subd. (e).)

Section 2924.12 does not, on its face, require tender. In Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, the Court of Appeal held that "a tender of the amount due under the loan is not required to state a cause of action under section 2923.6," the dual-tracking provision, reasoning that "such a requirement would completely eviscerate the remedial provisions of the statute." Entities described in section 2924.18 are subject to a parallel provision, section 2924.19. Our article on the notice of default cure period explains how these protections fit into the pre-sale timeline, including the three-month minimum after a notice of default.

After the sale: eviction and the deadline

Unlawful detainer after foreclosure

A buyer at a trustee's sale who needs to remove the occupants may bring an unlawful detainer action under Code of Civil Procedure section 1161a. Title may be tested there only in a limited way: the Supreme Court described it as "a narrow and sharply focused examination of title" in Vella v. Hudgins (1977) 20 Cal.3d 251, and held that an unlawful detainer judgment did not bar the former owner's later suit challenging the sale, because the title issues had not been fully and fairly litigated in the summary proceeding. But in Malkoskie v. Option One Mortgage Corp. (2010) 188 Cal.App.4th 968, a stipulated unlawful detainer judgment, entered after the borrowers had contested the sale's validity in their answer, barred their later suit to set the sale aside. How an unlawful detainer case is handled can decide whether a wrongful foreclosure claim survives.

How long do I have to sue?

No single statute of limitations governs every wrongful foreclosure claim; the period depends on the theory. In Hatch v. Collins (1990) 225 Cal.App.3d 1104, the court held that "a three-year limitations period applies to any cause of action, however designated, founded upon a fraudulent conspiracy between the trustee and beneficiaries to deprive the Hatches of the best price for their property at the trustee sale," and rejected the borrowers' argument for four years. A fraud-based claim generally runs from discovery of the facts constituting the fraud (Code Civ. Proc., § 338, subd. (d)). Equitable claims to set aside a sale can also be lost to delay. Anyone considering a challenge should act promptly and treat the earliest arguable deadline as the real one. Our statute of limitations guide collects related deadlines, such as the fraud period.

What to do

1. Before the sale, gather the notice of default, notice of sale, and all servicer correspondence, including loan modification applications and responses. Pre-sale HBOR injunctions require that the trustee's deed not yet be recorded.
2. Pull the recorded chain: the deed of trust, every assignment, any substitution of trustee, and the trustee's deed. The void-versus-voidable question turns on those documents.
3. Be realistic about tender. If you can pay or refinance, that may be the strongest position. If you cannot, identify which exception, if any, applies.
4. Find out who bought the property. A sale back to the lender is treated differently from a sale to a bona fide purchaser.
5. Respond to any unlawful detainer summons within the time stated on it. The response period is short, and a default can cost you possession. Do not stipulate to a judgment without considering its effect on your title claims.
6. Record a lis pendens only with a proper claim on file. Our article on lis pendens expungement explains the risks of recording one that does not hold up.

Foreclosure challenges are title disputes as well as lender disputes. Our quiet title and partition practice handles the title side, and our article on how a quiet title action works explains the procedure.

Common questions

This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and case law change, and how they apply depends on the specific facts. Attorney advertising. Prior results do not guarantee similar outcomes. Robert B. Mobasseri, State Bar No. 193193, ROMO Law Group, Encino, California.