The short answer: The Federal Housing Finance Agency's latest report, released November 5, shows early-stage late payments on Fannie Mae and Freddie Mac loans rose to 1.03% of loans in August, and foreclosure starts jumped 18% from July. If you're one of the homeowners falling behind, the most important thing to know is that you have more time and more options than it feels like: federal rules generally bar a foreclosure filing until you're at least 120 days behind, and California law adds its own contact requirements and waiting periods. The homeowners who keep their homes are almost always the ones who call their servicer early.

As of November 8, 2026. National figures cover Fannie Mae and Freddie Mac loans only and come from FHFA's August 2026 Foreclosure Prevention report. This is general information, not legal advice.

What did the new report show?

FHFA publishes a monthly report on the loans Fannie Mae and Freddie Mac back, which is a large share of all U.S. mortgages. The August numbers, published November 5, show more borrowers slipping (FHFA, August 2026 report):

  • 30 to 59 days late: 313,254 loans, or 1.03% of loans, up from 292,965 (0.96%) in July.
  • 60 or more days late: 256,999 loans (0.84%), up from 249,816 (0.82%).
  • Serious delinquency: 0.60%, up from 0.59%.
  • Foreclosure starts: 8,930, up 18.0% from 7,569.

The same report shows servicers are also doing more to help. Loan modifications and payment deferrals both rose in August:

Fannie Mae and Freddie Mac loans: help vs. foreclosure starts, July and August 2026

  • July 2026
  • August 2026
7,5037,675Loan modifications4,9935,233Payment deferrals9,7989,776Forbearance plans started7,5698,930Foreclosure starts
National counts for loans backed by Fannie Mae and Freddie Mac. Not California-specific. Source: FHFA Foreclosure Prevention, Refinance, and Federal Property Manager's Report, August 2026 (published November 5, 2026)

National Mortgage News, reporting on the release, tied the rise to inflation, higher energy costs, and rising insurance and property tax costs (National Mortgage News, November 6, 2026). That matches what I'm hearing from California homeowners this fall, especially the ones who just opened an escrow shortage letter or a FAIR Plan renewal.

What options can my servicer offer?

Your servicer is the company you send your payment to. For loans owned by Fannie Mae, these are the main ways to stay in the home (Fannie Mae, "We're here to help"):

  • Forbearance: an agreement "to pause or reduce monthly mortgage payments for a certain period" while you resolve a short-term hardship. After a disaster, Fannie Mae says forbearance can last up to 12 months.
  • Repayment plan: for a temporary hardship that's now resolved. You repay the missed amounts over up to twelve months, on top of your regular payment.
  • Payment deferral: missed principal and interest are moved to the end of the loan as a non-interest-bearing balance, due when you sell, refinance or pay off the loan. Your regular payment then continues as before.
  • Loan modification: a permanent change to the original terms, "such as monthly payment amount, loan term, or interest rate."
  • Reinstatement: if you can catch up all at once, you pay the missed amounts and the loan is current again.

If keeping the home isn't realistic, a short sale or a mortgage release (voluntarily transferring the home to the loan's owner) can avoid a foreclosure. FHA, VA, jumbo and private loans have their own menus, so ask your servicer exactly which options apply to your loan.

What does California law require before a foreclosure?

California has some of the strongest borrower protections in the country, much of it from the Homeowner Bill of Rights that took effect in 2013. According to the Attorney General's office, it restricts "dual tracking" (foreclosing while a loan modification is under discussion) and guarantees "a single point of contact with knowledge of their loan" (California Attorney General).

A few specifics from the Civil Code:

  • Contact first. Before recording a notice of default, the servicer must contact you by phone or in person to assess your finances and explore ways to avoid foreclosure, tell you that you can ask for a follow-up meeting within 14 days, and give you the HUD number for finding a housing counselor. It then generally has to wait 30 days (Civil Code § 2923.5).
  • No foreclosure steps while a complete application is pending. If you submit a complete first-lien loan modification application at least five business days before a scheduled sale, the servicer can't record a notice of default or notice of sale, or hold the sale, while it's under review. If you're denied, you get at least 30 days to appeal (Civil Code § 2923.6).
  • Built-in waiting periods. At least three months must pass after a notice of default is recorded, and the sale date can be no earlier than three months and 20 days after it (Civil Code § 2924).
  • A right to catch up. You can generally reinstate the loan until five business days before the sale date in the first recorded notice of sale (Civil Code § 2924c).

Not every protection applies to every loan or servicer; the statutes have their own limits. A HUD-approved housing counselor or a real estate attorney can tell you which apply to yours.

How much time do I have?

Here's the general sequence for a California home loan, based on the federal 120-day rule (CFPB) and the state statutes above:

Falling behind in California: the general timeline

  1. 1

    First missed payment

    Call your servicer

    • Ask about forbearance, repayment or deferral
    • Ask for your single point of contact
  2. 2

    Through 120 days late

    Federal waiting period

    • Foreclosure generally can't start yet
    • Best window to apply for help
  3. 3

    After contact + 30 days

    Notice of default may be recorded

    • Servicer must first contact you or make diligent efforts
    • Complete application pauses this step
  4. 4

    3 months after the notice of default

    Notice of sale

    • Sale no earlier than 3 months and 20 days after the notice of default
  5. 5

    Up to 5 business days before sale

    Right to reinstate

    • Pay the past-due amount and fees to catch up
General timeline only; dates vary by loan, servicer and postponements. Not legal advice. Source: CFPB; California Civil Code §§ 2923.5, 2923.6, 2924, 2924c

How do I avoid foreclosure scams?

Fear is what scammers sell. California's Department of Financial Protection and Innovation is blunt: "Do NOT pay anyone asking for upfront/advance fees for loan modification services or mortgage forbearance services." It says advance fees for loan modifications are illegal in California, warns against anyone who tells you to sign your home's title over to them, and warns against advice to stop paying on purpose to qualify for a modification (DFPI alert). Report suspected scams to the California Department of Real Estate at 877-373-4542.

Free help is real. The CFPB can connect you with a HUD-approved housing counselor at (855) 411-CFPB (2372) (CFPB).

Derek\'s take

The hardest part for most people is making the first call, because falling behind feels embarrassing. It shouldn't stop you. Servicers have real tools, and California law gives you real time and real rights, but those tools work best in the first few months. If your payment jumped because of insurance or property taxes, there may also be options outside your current loan, depending on your equity, credit and income. If you want someone in your corner to look at the whole picture, book a call with me. Thirty minutes, no credit pull, no obligation. And if you're already past 90 days late, call your servicer and a housing counselor first. That comes before any call with me.

Frequently asked questions

How late can I be before foreclosure starts?

The CFPB says that generally, the legal foreclosure process can't start until you're at least 120 days behind. In California, the servicer must also contact you, or make diligent attempts to, and then wait 30 days before recording a notice of default.

Can my lender foreclose while I'm applying for a loan modification?

Under California Civil Code § 2923.6, if you submit a complete first-lien modification application at least five business days before a scheduled sale, the servicer can't record a notice of default or notice of sale, or hold the sale, while it's pending. If you're denied, you have at least 30 days to appeal. The statute has limits, so confirm that it covers your loan.

What's the difference between forbearance and a payment deferral?

Forbearance pauses or reduces payments for a set period during a hardship. A payment deferral, as Fannie Mae describes it, moves missed principal and interest to the end of the loan as a non-interest-bearing balance due when you sell, refinance or pay off the loan.

Can I still catch up after a notice of default?

Generally yes. California Civil Code § 2924c lets you reinstate until five business days before the sale date in the first recorded notice of sale.

Is it legal to charge me upfront for loan modification help?

No. California's DFPI says advance fees for loan modification services are illegal in California. Free help is available from HUD-approved housing counselors.

This article is general education, not legal or financial advice, and not an offer of credit or a commitment to lend. Talk with a HUD-approved housing counselor or a California real estate attorney about your situation.

Sources

This article is general education, not a commitment to lend, an offer of credit, or tax, legal or investment advice. All loans are subject to credit approval, income and asset verification, and property appraisal. Programs, rates, terms and limits change without notice; figures are current as of the publish date. Derek Shao, NMLS #242117, CA DRE #01358261. Financial Dynamics, Inc. DBA Emory Financial, Company NMLS #393986. Equal Housing Opportunity.