California Defaults Are Rising: Fall 2026 Foreclosure Update

California defaults are rising again. Not at 2008 levels, and not everywhere at the same pace, but the direction has been the same all year: more homeowners falling behind, more foreclosure filings and more completed foreclosures than a year ago.

Here is what the latest data shows across the state, and what it means for homeowners, servicers and buyers.

Filings are up every way you measure it

According to ATTOM, 21,543 California properties had a foreclosure filing in the first half of 2026, up 12.8% from the first half of 2025. That includes 16,040 foreclosure starts, the third most of any state, and 2,644 completed foreclosures (REOs), the second most of any state.

The monthly numbers kept climbing through the summer. California had 4,573 properties with a foreclosure filing in July, up 4% from July 2025, and 4,450 in August, up 8% from August 2025. In August alone, lenders started foreclosure on 2,565 California properties and completed 589 REOs, second only to Texas.

Where it's rising fastest

The increases are concentrated. ATTOM's first-half 2026 figures, as reported by CalHomeNews, show:

Los Angeles: 5,193 filings, up 31.4%

Riverside: 4,024 filings, up 6.7%

San Francisco: 2,044 filings, up 7.6%

Sacramento: 1,603 filings, up 10.9%

San Diego: 1,210 filings, up 2.8%

Bakersfield: 890 filings, up 21.4%

Bakersfield also had one of the highest foreclosure rates of any large metro in the country in the second quarter, with one filing for every 616 housing units. Not every market is rising. Fresno and San Jose were both slightly down from a year ago.

California's rate is low. The volume isn't.

California's overall delinquency rate remains one of the lowest in the nation. ICE's September 2026 data puts California's non-current rate at 2.39%, among the five lowest states, and California ranked 15th by foreclosure rate in August.

But California is a big state with a lot of mortgages, so even a low rate produces large numbers. That is why California ranks near the top in total foreclosure starts and REOs even while its percentage stays low.

The national pipeline is still growing

ICE's First Look at September 2026 mortgage data, released October 27, shows the national trend:

The national delinquency rate rose to 3.66%.

About 579,000 loans were 90 or more days past due, up 102,000 from a year earlier.

Active foreclosure inventory reached about 303,000 properties, up roughly 37% year over year.

Foreclosure sales rose 14.5% from a year ago.

What this means

For homeowners: A Notice of Default is the start of the process, not the end. In California, at least three months must pass after the Notice of Default is recorded before a Notice of Trustee Sale can be given, and in most cases you can reinstate the loan until five business days before the sale date. Those deadlines move fast. Talk to a HUD-approved housing counselor or a real estate attorney early, and ask about every option, including a loan modification, a traditional sale or a short sale.

For servicers and asset managers: Rising starts today mean rising REO volume in the months ahead, especially in Los Angeles, the Inland Empire and the Central Valley. Local pricing, vacant-property oversight and a clean path to closing matter more as volume grows.

For buyers and investors: More homes moving through the process means more trustee sales and more bank-owned listings ahead. Defaults lead REO inventory by months, so the defaults recorded now are next year's REO listings.

What to watch next

ATTOM's September and third-quarter foreclosure report is expected soon, and we will update these numbers when it is released.

Talk to REO California

Whether you are a homeowner trying to understand your options, a servicer assigning REO or a buyer looking for bank-owned homes, the conversation is free. REO California is led by Joe Iuliucci, Broker, Keller Williams Realty. Over 36 years, Joe and The Iuliucci Team have sold more than 15,000 homes.

Call 888-980-9820 or 949-630-0650.

Sources: ATTOM Mid-Year 2026, July 2026 and August 2026 U.S. Foreclosure Market Reports; CalHomeNews, July 21, 2026 (citing ATTOM); ICE First Look at September 2026 Mortgage Data (released October 27, 2026); California Civil Code 2924 and 2924c. This article is general information, not legal or financial advice.