Louisiana Foreclosure Laws

Questions

Answers

How are mortgage liens treated in Louisiana?

Louisiana is generally known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. Louisiana law is based on the civil law system prevalent in Europe--as opposed to the English common law system which forms the basis for most of the law used in the United States.

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How are Louisiana mortgages foreclosed?

In Louisiana, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. There are two formats to this procedure known as the ordinary process which serves as a contested litigation and the executory process which uses a pre-existing confession of judgment that is authenticated through the judicial process. The property is then sold as part of a publicly noticed sale.

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What are the legal instruments that establish a Louisiana mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in Louisiana?

Depending on the court schedule, it usually takes approximately 180-270 days to effectuate an uncontested foreclosure through the ordinary process. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. The executory process usually takes no more than six (6) months. Typically a borrower whose foreclosure action is brought under the executory process receives a three (3) day notice upon default. If the loan is not brought current the property is advertised once a week for thirty (30) days ands then sold.

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Is there a right of redemption in Louisiana?

Louisiana has no statutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs.

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Are deficiency judgments permitted in Louisiana?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures but only through the ordinary process or a separate lawsuit outside the executory process. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan.

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What statutes govern Louisiana foreclosures?

The laws that govern Louisiana foreclosures are found in Louisiana Revised Statutes, Title 10:9-629


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