Legal Question in Real Estate Law in California

You can homestead it, but it will have no effect on prior liens. Everything is based on date of recording. Also, homestead declarations do not have any effect on the exemptions allowed or the amounts thereof. Those are automatic. The only effect of a homestead declaration is to create a presumption that the homestead exemption applies to that property, which of course makes no difference unless you own multiple properties and there would be advantage to removing doubt as to which is your principal residence.

While I don't necessarily agree with everything Mr. McCormick has said about declared homesteads, it is for sure true that declaring a homestead will not provide you with any protection against liens already in place against your house.