Levy on a homestead that is subject to a lien or encumbrance is not by itself grounds for acceleration of the obligation secured by the lien or encumbrance, notwithstanding any provision of the obligation, lien, or encumbrance and if the homestead is sold pursuant to court order under this article the amount payable to satisfy a lien or encumbrance shall not include any penalty for prepayment.
§ 704.810.Amount Payable to Satisfy Lien Or Encumbrance Not to Include Prepayment Penalty
Title 9. Enforcement of Judgments · Division 2 · Chapter 4. Exemptions · Article 4. Homestead Exemption · Enacted 1982 · no amendments on record · Last verified July 28, 2026
In one sentenceSection 704.810 prevents a levy on a homestead from accelerating any loan or lien secured by the property, and bars a prepayment penalty from being charged against sale proceeds if the homestead is sold under a court order.
Full Text of § 704.810
Plain-English Summary
A homeowner facing a levy doesn't need a second problem stacked on top: a lender racing to call the entire loan balance due. This section says a levy on a homestead is not, by itself, grounds to accelerate whatever obligation is secured by a lien or encumbrance on the property, no matter what the loan documents themselves say.
It also protects the sale proceeds if a forced sale under this article does go forward. Whatever amount is needed to pay off a lien or encumbrance from those proceeds cannot include a prepayment penalty, even if the underlying note would otherwise charge one for an early payoff.
Frequently Asked Questions
Can a lender call a loan due just because the home was levied on?
No. Section 704.810 says levy on a homestead is not by itself grounds for acceleration, regardless of what the loan or lien documents provide.
If the home is sold under a court order, does the lender get a prepayment penalty from the proceeds?
No. The amount paid to satisfy a lien or encumbrance from the sale proceeds cannot include any prepayment penalty.
Amendment History
Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: homestead levy loan acceleration californiaprepayment penalty forced home sale california