Private Lenders: A Missing Certification Could Undo the Entire Foreclosure
California Civil Code Section 2924.13(g) gives borrowers a new path to set aside completed sales
What happens if a foreclosure sale closes—but the certification was never recorded?
From 23+ years of representing lenders in real estate litigation and foreclosures, one trend is clear: post-sale challenges are only going to increase. With the enactment of Civil Code § 2924.13(g), borrowers now have a statute-backed method to unwind a completed trustee sale—but only for subordinate deeds of trust secured by residential property. (For more, see earlier posts on subsections (a) through (f).)
“A borrower may also petition the court to set a nonjudicial foreclosure sale aside when a certification required by subdivision (c) was never recorded or when a certification recorded pursuant to subdivision (c) indicates that the mortgage servicer engaged in an unlawful practice described in subdivision (b) or misrepresented its compliance history.”
Post-Sale Risk Now Explicitly Recognized
Before this statute, borrowers already had the ability to sue to invalidate a foreclosure based on defects in servicing or recording. But this section now codifies that ability and explicitly invites courts to set aside a completed sale if:
The required certification under § 2924.13(c) was never recorded, or
The certification was inaccurate or misleading
That creates new post-sale exposure for lenders.
Retroactive or Not? There’s Room to Push Back
Because the statute is silent on timing, it applies retroactively. That ambiguity may lead some borrowers to challenge Notices of Default recorded before July 1, 2025. But when a Notice of Default was recorded prior to that date—at a time when no certification was required—there’s a strong argument that the statute does not apply and the foreclosure remains valid.
Lenders with pending sales should review whether the Notice of Default was recorded before the effective date of July 1, 2025, and ensure files are defensible if challenged.
Stay Vigilant Before and After the Sale
The best way to avoid post-sale litigation is to ensure compliance up front. Lenders should confirm that a clean, accurate certification under penalty of perjury is recorded with the Notice of Default.
Follow for the final post in this series as we complete the full breakdown of California’s new foreclosure statute.