Foreclosure laws in Louisiana (LA)Topic: Foreclosure
Louisiana is a state where the only way a bank can foreclose is by using the courts. This is referred to as a judicial foreclosure. There are two types of in-court foreclosure that can be used, executor process and ordinary process. Executory foreclosure occurs when the bank has used a mortgage that includes in its language 'an authentic act that imparts a confession of judgment'.?? Basically, this means that the home owner signed and acknowledged the obligations of the mortgage in the presence of a notary public and two witnesses. This type of mortgage makes the foreclosure process a lot easier for the bank. It speeds up the process.
Once the suit has been filed along with the original note and a certified copy of the mortgage, the court automatically issues an order for the process to begin. Once this order is issued, the home owner will then be served with a demand for the back payments. Louisiana gives the home owner only three days to pay the money. Following these three days, if the money is not paid, the court will issue a Writ of Seizure and Sale. The date, time, and place of the sale must be advertised for thirty days before it can be held.
Banks may seek a deficiency judgment. This means they can try to get the former homeowner to pay them the difference between what the house sold for and what the amount owed was. This doesn't occur very often, but the bank can sue for that money if they want to. The former home owner has no right of redemption in this state. A right of redemption is a time period, allowed in most states, during which the person who lost their home to foreclosure can regain ownership of the house by paying either the amount of the loan or the price paid at the sale for the house. This option is not available in Louisiana. Even though judicial foreclosure usually takes a lot longer than non-judicial foreclosure, Louisiana has streamlined the process and it is one of the quickest states in which the bank can move towards the sale of the home. Sixty days is the average length of the foreclosure process in this state.
The ordinary foreclosure process works more like a lawsuit, and is more costly and time consuming. Consequently, ordinary foreclosure is rarely used by the banks. In executory foreclosure, the bank is required to send any notification to the home owner, prior to starting the foreclosure process. The mortgage or deed of trust may have language requiring this notification. If it does not, no prior warning will be given to the homeowner. A notice of sale must be personally served upon the homeowner in default, by the sheriff. This notice of sale must also be advertised in a newspaper with general circulation in the parish where the home is located. The sheriff is required to conduct the foreclosure sale. Anyone may bid for the home at the sale.
The person making the highest bid will be deemed the winning bidder. This winning bidder must be able to pay the price the offered in cash. The same day as the sale occurred. Some exceptions are allowed occasionally. That exception would be that 10% of that winning bid price must be paid the day of the sale in cash and the remaining money to complete the purchase must be paid in the next thirty days following the sale, when the total price of the winning bid is paid, the sheriff will issue a deed to the winning bidder.