Will a Short Sale Stop Foreclosure in LA?

Posted by Denise Connor on April 20th, 2025

Foreclosure. Just the word can make your stomach drop, right?

If you’re a homeowner in Los Angeles and you’ve fallen behind on your mortgage payments, it might feel like you’re standing on a ticking time bomb. The good news? There is a way to defuse it before it goes off—and that’s where a short sale comes into play.

But here’s the big question: Will a short sale actually stop foreclosure in LA? Let’s break it down in plain English.

For those looking for more info or listings to get started, take a look at https://losangelesshortsaleblog.weebly.com/blog/los-angeles-short-sale-listings-how-to-score-a-deal-in-a-red-hot-market. It has some solid insight into how to work with short sales in the LA area, whether you’re trying to avoid foreclosure or even looking to scoop up a deal as a buyer.

What Exactly Is a Short Sale?

Before we dive into how it works, let’s make sure we’re on the same page.

A short sale happens when you sell your home for less than what you owe on your mortgage, and the bank agrees to accept the lower amount as full payment. It’s kind of like cutting your losses and walking away before things get worse.

Unlike foreclosure, which can wreck your credit and leave a permanent scar on your financial history, a short sale is more of a soft landing. It’s not ideal—but it’s way better than the alternative.

Can a Short Sale Really Stop Foreclosure?

Yes, it can. But there’s a catch—you have to start the short sale process before the foreclosure is finalized.

That means time is of the essence. Once your lender files a Notice of Default (that’s the first official step in California’s foreclosure process), the clock starts ticking. You’ll have roughly 120 days to work something out before the sale date is set.

If you initiate and pursue a short sale during this window—and your lender agrees to it—the foreclosure process will usually be paused. Think of it like hitting the “pause” button on a fast-moving train.

How Does a Short Sale Prevent Foreclosure in Los Angeles?

Here’s a simplified version of how it works:

1. You list your home for a price that reflects current market conditions.

2. A buyer submits an offer.

3. You send a short sale package (that’s a bundle of documents including your hardship letter, financials, and the buyer’s offer) to the lender.

4. The lender reviews the package.

5. If they approve it, you sell the home, pay off part of the mortgage, and walk away without a foreclosure on your record.

As long as the lender is actively reviewing your short sale file, they’ll typically hold off on finalizing the foreclosure. They’d much rather settle the debt than go through the messy, expensive process of foreclosing and reselling the home themselves.

Timing Is Everything

One of the biggest mistakes people make? Waiting too long to act.

It’s easy to get overwhelmed, ignore the letters piling up, or assume you’ll “figure it out later.” But in foreclosure, every day counts.

Here’s a quick look at California’s non-judicial foreclosure timeline (which is what most LA homeowners go through):

• Day 1: Notice of Default filed

• Day 90: Pre-foreclosure period ends

• Day 111: Notice of Trustee’s Sale can be recorded

• Day 120+: Your home can be sold at auction

To stop this process with a short sale, your agent needs enough time to find a buyer, submit the short sale package, and get lender approval—all before the foreclosure sale date.

How a Short Sale Benefits You Over Foreclosure

Still wondering if a short sale is worth the trouble? Let’s compare:

Short Sale Pros:

• Stops the foreclosure process

• Less damage to your credit (compared to a foreclosure)

• You may qualify for relocation assistance

• You may be able to buy another home sooner

• You avoid eviction

Foreclosure Cons:

• Severe credit damage (can drop your score by 200+ points)

• You lose your home with nothing to show for it

• Public record of foreclosure

• Harder to rent or buy in the future

• Potential tax or legal consequences

So yeah… short sale wins this round.

What If My Foreclosure Date Is Already Set?

You still might have time.

If you have a buyer and the lender is reviewing your short sale file, your agent or attorney can often request a postponement of the sale date. Lenders don’t always grant it, but they’re often willing to delay if they believe the short sale will go through.

It’s definitely not a guarantee, but it’s 100% worth trying.

You’ll also find examples of how short sales work in real-time, what banks are approving, and how to move forward before it’s too late. Bookmark https://all4webs.com/jessierandolph/realestateshortsa.htm?16888=44961 if you’re serious about navigating this space.

Do You Need a Special Agent to Handle It?

Absolutely. Not every real estate agent knows how to handle short sales—especially when foreclosure is looming.

You want someone who:

• Has experience negotiating with lenders

• Knows how to submit a complete short sale package

• Understands LA’s local real estate laws and foreclosure timelines

• Has a proven track record of successful short sale closings

This isn’t the time to work with your friend’s cousin who just got their license. Get a short sale expert—your financial future depends on it.

Key Takeaways

Here’s what you should remember:

• Yes, a short sale can stop foreclosure in LA—if you act fast enough.

• You need to initiate the short sale before your home is sold at auction.

• Lenders often prefer short sales over foreclosure, but you have to present a complete, compelling case.

• Working with an experienced short sale agent is crucial to success.

• If your foreclosure date is near, you still might be able to request a delay.

Conclusion: Don’t Wait—Take Action Now

If you’re underwater on your mortgage and worried about foreclosure, don’t wait until it's too late. A short sale could be the solution you’ve been looking for—and in many cases, it’s the smartest way out.

Remember: foreclosure is not your only option. With the right help, you can stop it in its tracks and start moving forward again.

If you need more help or guidance, feel free to reach out, and I can even help draft a hardship letter, list the required documents, or recommend a short sale agent in your area.

You're not alone—and you’ve still got options. Let’s take advantage of them while there’s still time.