Louisiana Foreclosure Laws

In the state of Louisiana there are no non-judicial foreclosures allowed, and the judicial process entails two different methodologies. The executory process is fast and can take as little as 60 days to finalize. Whereas the ordinary processes takes a longer time for finalization of the foreclosure. Generally this is quite a long time and depends very much on how busy the courts are. It can take between 180 – 270 days and even longer. Law in this state is very similar in nature to the laws of Europe, rather than the British common law system used by most of the states in the US.

The underlying loan is secured by the property and this makes Louisiana a lien theory state. The legal agreement for the loan is known as a mortgage note, and a mortgage note cannot contain a power of sale clause. This is why the non-judicial method of foreclosure is not available to lenders.

The borrower is allowed no rights of redemption after the foreclosure has taken place, and lenders are allowed to pursue a deficiency judgment. However this must take place outside of the executory foreclosure process.  

The executory foreclosure process takes place according to the Louisiana statute of "authentic act that imparts a confession of judgment". This is included into mortgage agreements as a matter of course, and it indicates that the borrower knows the meaning of and acknowledges all obligations of the mortgage. The ordinary process is slightly different in that is serves as a contested litigation. The executory process makes things easier for the lender, in that the documents were signed in the presence of a notary public and two witnesses, and serves as a pre-existing confession by the borrower which has been authenticated; in some ways this actually does mimic the “power of sale” clause used in Deeds of Trust.

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