Louisiana Foreclosure Laws
When a borrower is unable to meet the financial terms of a mortgage contract, the lender has the right to reclaim the property for auction to the highest bidder. This is referred to as a foreclosure process. In the state of Louisiana two foreclosure procedures are used, the ordinary and executory methods.
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Ordinary Foreclosure
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An ordinary foreclosure requires the lender to file a lawsuit against the homeowner for failure to meet his financial obligations. Once this is filed, a court order may be issued mandating that the home be sold to the highest bidder. This process tends to be more time consuming than the executory method.
Executory Foreclosure
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Under the Louisiana executory foreclosure procedure, the lender may require that the obligations from the mortgage be signed by the homeowner in front of a notary and two witnesses. This serves as an "authentic act that imparts a confession of judgment," according to Louisiana's statutes. With this type of documentation, the lender simply files the suit, along with a original signed and notarized document and a certified copy of the mortgage. At this point, the court will automatically issue the necessary court order, instead of holding a hearing, and the foreclosure process may begin.
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Process
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Once the court order has been issued, a demand for the payments that are in arrears must be provided to the homeowner. Once this is served, the homeowner has three days to make the necessary payments before the court orders a writ of seizure and sale. This allows the property to be sold. Prior to the auction, a noticed must be published in local newspapers for a minimum of 30 days.
Deficiency
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A deficiency occurs when the auction of the home does not yield enough money to pay off the entire mortgage. When this happens in Louisiana, the lender may request another judgment against the former homeowner requiring him to pay the remaining balance that is due.
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