California’s foreclosure process legitimizes the large-scale extraction of billions of dollars of wealth from low-income communities. When a homeowner can’t pay back their mortgage loan, the lender often sells the property at an auction, takes back the loan’s remaining balance, and the homeowner receives any surplus funds from the sale. As properties at auction sell for far below value, the defaulted homeowner often loses tens or hundreds of thousands of dollars of accrued home equity. Meanwhile, wealthy cash investors benefit from these oppressive below-market value sales by acquiring properties at bargain rates. Foreclosed homeowners are low-income, often elderly, immigrant, or disabled members of California’s most vulnerable communities. Their home is often their only asset, and home equity their only lifetime savings. SB 1323 requires lenders to sell foreclosed properties at market value using a real estate agent, and to sell the property at its appraised value, so that owners losing their home can receive their full savings in equity after the sale.

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