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Louisiana 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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