Louisiana foreclosure law tends to favor the lender. It is based on the prevalent European civil law system as opposed to the English common law system. The state does not have a right of redemption statute, which would give the defaulting borrower a chance to reclaim their property by paying off their debt in full, nor does it allow deficiency judgments to be passed, which would allow the lender to sue the borrower for any outstanding debt left over after a property has been sold.
Foreclosures usually take 60 days to complete in Louisiana; however, they may finalize faster or take more time. Those who have been issued a foreclosure notice are able to legal help to protect their rights and try to save their homes from repossession.
Types of Foreclosures Allowed in Louisiana
Judicial Foreclosure
Louisiana foreclosure law allows for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
To start the process, the lender must file a lawsuit against the borrower and the court will then issue a final judgment of foreclosure. There are two ways a foreclosure in Louisiana can be carried out. One is by what is known as the ordinary process, which is a form of contested litigation, and the other form is known as the executor process, which uses a pre-existing confession of judgment authenticated through the judicial process.
With the confession of judgment, a borrower executes a legal document allowing for immediate judgment to take place in the event of default. This makes for faster foreclosure proceedings because once the lawsuit against the borrower has been filed and the original note and certified copy of the mortgage has been provided, the foreclosure process will begin right away.
A confession of judgment serves the same purpose as a power of sale clause in other states. The borrower will receive a three (3) day notice upon default. If the loan is not satisfied, then the property will be advertised once a week for thirty (30) days and will then be sold at auction.
