Foreclosure activity in Los Angeles has been on the rise in early 2025, drawing attention from homeowners, investors, and industry experts alike. Understanding the factors driving this trend can help property owners navigate potential challenges ahead.
Current Foreclosure Trends in Los Angeles
During the first quarter of 2025, Los Angeles reported 619 new foreclosure filings, ranking among the top 10 metropolitan areas in the United States (ATTOM Data Solutions). Although this marked a slight decrease from January's 652 foreclosure starts, the overall trend suggests heightened financial distress among homeowners.
Nationally, foreclosure starts increased 14% from the previous quarter and showed a slight 2% rise year-over-year. However, overall foreclosure filings across the U.S. were down 2% compared to the same period in 2024, indicating mixed signals nationwide.
Impact of January 2025 Wildfires
The devastating wildfires in January 2025 significantly impacted many Los Angeles homeowners. In response, the U.S. Department of Housing and Urban Development (HUD) issued a foreclosure moratorium on FHA-insured mortgages in Los Angeles County through July 7, 2025.
Additionally, Fannie Mae and Freddie Mac offered affected homeowners 12-month mortgage forbearance plans, allowing reductions or pauses in mortgage payments without penalties. Despite these relief measures, homeowners still remain responsible for property taxes and mortgage obligations, even for destroyed homes.
California’s New Foreclosure Protections
California recently enacted Assembly Bill 2424 (AB 2424), effective January 1, 2025, which enhances protections for homeowners facing foreclosure. This legislation requires lenders to clearly communicate foreclosure alternatives, such as loan modifications and short sales. Borrowers can also now designate a family member, attorney, or HUD-approved counselor to receive foreclosure notices, ensuring better support and awareness during financial hardships.
Foreclosure Auctions Reflect Ongoing Distress
Los Angeles County continues scheduling tax-defaulted property auctions, with the next online auction set for June 7–10, 2025 (LA County Treasurer). The ongoing auction activity highlights persistent financial struggles among some property owners.
What Los Angeles Homeowners Can Do
Homeowners facing foreclosure should proactively seek assistance from housing counselors or legal professionals. Exploring available relief options early can help mitigate financial stress and prevent potential property loss. Additionally, homeowners can assess their property's current market value to make informed decisions using tools like this home valuation tool, Click Here.