Louisiana Foreclosure Laws

Louisiana foreclosure laws calls for judicial proceedings which means it is handled in court. Judicial foreclosure laws in Louisiana has two types; namely, ordinary and executory. To begin with the foreclosure, the lender should file a petition in court where the mortgage is a security of instrument. Typical foreclosure timeline is 6-9 months.

Judicial Foreclosure Laws in Louisiana

Ordinary foreclosure resembles that of a lawsuit. Compared to executory proceeding, this process is extensive as well as expensive with a typical timeline of 9 months.

Executory foreclosure is applicable when the mortgage has an ‘authentic act that imparts a confession of judgment.’ This is signed by the borrower in the mortgage agreement in the presence of 2 witnesses and a notary public. This means that the borrower is fully aware of the consequences in case he or she defaults on payments. In Louisiana foreclosure, the lender is not required to notify the borrower before beginning the foreclosure proceedings. However, there are instances that the lender is required to notify the borrower only if this is stated in the mortgage agreement. Typical timeline for this foreclosure process is 6 months. Once the lawsuit is filed, the borrower is given 3 days to pay the default amount owed. If the borrower fails to do so, a Writ of Seizure and Sale will be issued by court and foreclosure sale will be scheduled.

Statutory right of redemption allows the borrower or homeowner to regain ownership of a foreclosed property. As per foreclosure laws in Louisiana, statutory right of redemption is not permitted.

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.

The public auction should be scheduled at least 30 days after the initial court ruling. The foreclosure sale is conducted similar to that of a public auction and presided by the Sheriff.

Notice of Sale

The borrower or homeowner will be personally informed by the Sheriff about the foreclosure sale. A Notice of Sale should be published two times in a local newspaper. At the auction, anyone can bid. Even the borrower can bid.

The winning bidder gets the property and mush pay on the day of the auction. In some instances, the winning bidder is allowed to make a full payment within 30 days if there is a deposit of 10%.