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Judicial foreclosure available: Yes
Non-Judicial foreclosure available: No
In contrast to the laws of most of the states, which are
based on the English common-law system, Louisiana laws are based on the civil
law system used throughout most of Europe and much of the world. Under
Louisiana's system of laws, judicial foreclosure is the rule and deed of trust
or power of sale type sales are not permitted (though Roman law itself would
have allowed it).
Two Methods of Judicial Foreclosure Louisiana's two
foreclosure methods are (1) ordinary process and (2) executory process.
Ordinary process operates as an ordinary lawsuit in Louisiana.
Executory Process
This is an accelerated procedure of a summary nature by
which the lender uses a mortgage that includes an "authentic act that imparts a
confession of judgment." In practice this means the mortgage is signed before a
notary and two witnesses. The borrower declares and acknowledges the
obligations under the mortgage. Later, when the lender wants to foreclose, the
lender files a suit in court, and attaches the original note and a certified
copy of the mortgage. The court can then enter an order for the issuance of
executory process.
In the past, executory process skipped citation,
contradictory hearings and judgments. The problem with such procedures in the
past has been a constitutional one. The U.S. Supreme Court, in the famous case
of Fuentes V Shevin 1407 U.S. 67 (1972), held that the defendant in any lawsuit
must be given notice of the suit and an opportunity to be heard in court.
Louisiana's current executory process procedures barely comply with these
requirements. Once executory process issues, the borrower is served with a
demand for payments that are due and unpaid on the loan. The borrower has three
days to come up with the money. If the borrower doesn't pay, the court will
issue a writ of seizure and sale, armed with which, the sheriff will seize the
real estate. The borrower gets a notice of seizure. The property is then
advertised once a week for 30 days. The sheriff will then sell the property at
auction to pay down or pay off the loan. Executory process is harsh and
exacting. Executory process would allow a lender to seize possession of the
property prior to reselling it at a foreclosure sale.
Ordinary Process In ordinary process the lender files a
lawsuit to foreclose the mortgage. The borrower is served as a regular
defendant in the lawsuit and the procedures for an ordinary lawsuit are
followed. If the borrower loses, the court will enter judgment in favor of the
lender. After that, a writ of fieri facias will be issued directing the
property to be sold to pay off the loan.
Deficiency Judgments The lender must obtain a deficiency
judgment by an ordinary lawsuit, either in conjunction with executory process
or as a separate suit. A deficiency cannot be obtained by executory process
alone. Executory process will allow seizure and sale of the property, but not a
personal judgment.
Redemption
Louisiana does not recognize a right of redemption.
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