As a former loan officer, I’ve always been a watchdog for my clients’ financial health. For years, I’ve seen a heartbreaking practice in California: if a homeowner fell behind on property taxes and the county sold the home at auction, the government could keep all the profit—even if the tax bill was only a fraction of the home’s value.
I’m proud to share that as of 2026, AB 418 has officially outlawed “home equity theft” in our state.
What This Means for You
If a property is sold due to unpaid taxes, the county can still collect what is owed (including penalties and fees), but every cent of the remaining equity must be returned to the homeowner. This is a victory for property rights, but it doesn’t mean you should ignore those tax notices. Tax foreclosure is still a reality. If you’re a senior on a fixed income or someone who has inherited a property and is struggling with the tax burden, don’t wait for the auction.
My 2026 Strategy for Homeowners in Distress:
- Don’t Ghost the County: There are postponement programs available for seniors and veterans.
- Sell on Your Terms: A “distressed sale” on the open market will almost always net you more money than a county auction, even with the new protections.
- Know Your Rights: If your home was sold recently, you may have a legal claim to those surplus funds.
My team and I offer confidential consultations for homeowners facing these tough spots. Let’s find a way to save your equity before the county steps in.
