Louisiana Foreclosure Process

Link to Louisiana Foreclosure Laws

Under Louisiana foreclosure laws, only judicial foreclosure are permitted.

Foreclosure Overview

Under Louisiana foreclosure law, only judicial foreclosures are permitted. That said, there are two types of judicial foreclosure in Louisiana: Executory and Ordinary.

Louisiana foreclosure can take from 180 to 270 days, depending on whether the foreclosure is ordinary or executory and whether the borrower contests the foreclosure.

Executory foreclosures are technically judicial foreclosures but permit lenders to avoid many of the steps typically considered part of a judicial foreclosure.

Ordinary judicial foreclosures follow the conventional process where a lender sues a homeowner for mortgage loan delinquency. Once they prove their case, they are awarded a foreclosure judgment by the court. The ordinary process is more extensive and costly, and it works more like a lawsuit. This foreclosure process usually lasts about nine months.

Most Louisiana foreclosures are executory in nature, and most mortgages and notes in Louisiana are written to reflect this preference.

 

Pre-foreclosure Period

In Louisiana, federal law discourages the initiation of foreclosure proceedings until the borrower has fallen at least 120 days past due on their mortgage loan payments.

When a Louisiana borrower misses a payment on their loan, the servicer has the option to extend a “grace period”.  During the grace period, the borrower may simply make the missed payment without incurring fees, fines, or penalties. In most cases, this period is about 15 days. However, Louisiana foreclosure law does not set a definite length.

Lenders are required to contact the homeowner by phone or in person to discuss foreclosure alternatives and loss mitigation options no more than 36 days after each payment is missed.

No more than 45 days after each payment is missed, the servicer must provide information about these options in writing and assign an individual within their organization to the case.

Often, Louisiana property loans include provisions requiring lenders to send a “breach letter” to the borrower letting them know that they will face foreclosure if the debt remains unpaid and containing verbiage that the lender may (or does if the mortgage and note are written that way) have the option to accelerate the mortgage to foreclosure if the delinquency goes unaddressed.

 

Executory Foreclosure

If a borrower has agreed in the terms of their loan that the lender may obtain a judgment “On Default”, also called a “Confession of Judgment,” the lender may file a foreclosure petition in court after pursuing all required pre-foreclosure actions. The lender must attach the mortgage to the foreclosure petition in order.  The court then orders the property seized and then sold. A borrower can stall or halt this process by appealing the petition or bringing suit against the lender.

The executory foreclosure process involves the lender using a mortgage that includes an “authentic act that imparts a confession of judgment” clause which is where the borrower accepts the obligations under the mortgage. The lender is not legally required by state law to send any notification to the borrower before beginning the foreclosure process; however, the deed of trust or mortgage may and often does, include such a requirement. Regardless, once the petition is filed, the borrower is served with a demand for the defaulted amount. If the borrower does not provide the amount within three days, the court orders a Writ of Seizure and sale, and the court clerk delivers it to the parish sheriff. The sheriff then serves the Writ of Seizure to the borrower.

  • Louisiana foreclosure law requires the notice of seizure to include:
  • information about avoiding foreclosure,
  • availability of free housing counseling,
  • the time, date, and location of the sheriff’s sale.

The initial sale date cannot be sooner than 60 days from the date that the court signs the foreclosure order.

Once the parish sheriff serves the Writ of Seizure, they also must publish a Notice of Sale, (NOS). The sale is a public auction, and the Notice of Sale must be published at least twice in a newspaper in the parish where the property is located. The sheriff conducts the sale. Anyone may bid on the property, including the borrower. The winning bidder must pay the sale price in cash on the day of the sale, (or in some cases, within 30 days of the sale if a 10-percent deposit is made). This is at the discretion of the Sheriff and the court. T

The sheriff then issues a sheriff’s deed to the winning bidder.

In the event that the foreclosure sale does not bring in enough money to cover the money owed on the property, the lender may file suit for a deficiency judgment against the borrower. This is only an option if the property was appraised before the sale. In order to obtain a deficiency judgment, the lender must:

  • File another separate suit after the executory foreclosure or
  • Convert the executory procedure to an ordinary procedure, through the court. 

 

 

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