Legal Question in Real Estate Law in California

Do you have anything from them in writing stating that they would modify the loan and not foreclose?

Roach's question is the right one. Unless they promissed in writing not to foreclose, you ignored the foreclosure notices at your own risk. If they did promise in writing, then you have been defrauded and should hire an attorney.

Maybe my answer will be more helpful to what to do next (maybe not). What happened to you is a familiar approach of most institutional lenders right now. You can read all about Wells, BofA, Countrywide, etc., all doing exactly what you have described. Essentially, by foreclosing on your home, the lender will get, at a minimum, 130% of the loan value back in "stimulus" funds - ie - your tax dollars that are "bailing out" the banks. There is some lee-way in the prior responses above. If you were in a HAMP program, or a forebearance program - even if not in writing - there is some room for you to have a case against your lender. HOWEVER, be forewarned, this type of litigation is not for the weary. You should only proceed on principle, as you will never ever get exactly what you think you ought to get out of the litigation - including the ability to tell your story to the court. For starters, you will have to overcome the issue of why you are harmed if at all by the foreclosure vs. short sale. Just because the bank made $$ on the foreclosure doesn't mean you lost money (or were injured). You will pay thousands to an attorney while having to deal with the reality of living in a home you aren't sure you can keep, and only want to keep so you can sell. So, when the AC goes out, you gonna fix it? If the weeds grow, you gonna cut them? More likely you will get to the point where you despise your home because it is keeping you from moving on with your life. Now is a great time to start over. You cannot start over until you get past this house issue. If you haven't already rec'd, you will get a notice to quit the premises. It will be followed with an eviction summons (unlawful detainer). If you were working with a broker, you may want to have that broker contact the title holder (yes, you are reluctant to call anyone else but yourselves the "owner" - that's okay, I get it), and request a cash-for-keys trade. You move out in return for some cash $2500 to $3500 for leaving the home in broom-swept condition. You keep your pride and move on. The UD plaintiff gets you out without having to do an eviction. In short, if you already came to the decision to leave your home - you should trust that decision. I get that the way it happened isn't fair - especially when your tax dollars are supporting the fraudulent activities of the lenders. But, you were ready to move on. My advice would be to stick with that plan and leave the lenders to their own demise.

Good luck.