Louisiana is one of the southern states of USA. Baton Rouge is the capital and the biggest city is New Orleans. The foreclosure crisis has not spared the state and the downturn in the economy is all too evident as the state tries to stand up after the ravages of Hurricane Katrin and also the oil spill. The realtors of Louisiana contend that in the real estate market in generally followed the pan American trend during the last one year but the employment situation is better than the national statistics.
In Louisiana foreclosures have to go through courts and non-judicial foreclosure is not available. The mortgage is the main security instrument. Generally it takes 60 days for the process to be completed.
In Louisiana State the judicial foreclosure is of two kinds – executory and the ordinary.
The foreclosure method is easier and faster for the banks in the executory process. The mortgage that the lender uses is an “authentic act that imparts a confession of judgment”. It is included in Louisiana laws. It means that the borrowers inked and admitted to it in the mortgage in front of a public notary and two other witnesses. With the filing of the suit and the original mortgage note together with the mortgage’s certified copy the court issues an order for the kicking off of the process. As per state law the lending entity does not have to notify the troubled house owner before starting the foreclosure.
The borrower is then served with a notice demanding payments that have become due. The borrower is given three days time to clear arrears. If the borrower fails to pay, the court orders the seizure and sale of the unit after proper advertisement. It generally takes six months for foreclosure process to be completed.
The sheriff personally serves the foreclosure notice. This notice has to be published once per week for thirty days. The sale is conducted by the sheriff and all have the right to bid – including the previous house owner – the borrower. The winner has to pay the price in cash on the sale day. In some cases it is 30 days from the date of sale if a deposit of 10% is made. The sheriff hands over a deed to the winner.
The ordinary foreclosure process is relatively more costly and elaborate as well as time consuming. It runs along the line of a lawsuit. It generally takes nine months to run its full course.
In Louisiana lenders have the right to file a case for deficiency judgment if the sale proceeds are less than the loan due amount but the borrower has no redemption rights.
Thus Louisiana State is an alien theory one. It is founded on the civil legal system prevailing in Europe and that of English common law; the latter is the foundation of most of the laws in USA. The prevailing foreclosure system is known as ajudicial having two formats – the ordinary and the executory. The latter makes use of a confession that is pre-existing and authenticated by the court.
The foreclosure process may be delayed if the borrower files for bankruptcy protection.
The laws governing foreclosure process in Louisiana are Louisiana Revised Statues, Title 10:9-629.