How Long Will Your House Be at Risk From Foreclosure? 

The heart of a family is its home, but it’s easy for a home to start feeling like a jail when mortgage payments are overdue. Louisiana homeowners in danger of losing their homes should educate themselves as soon as possible on the Louisiana foreclosure process.

Because Louisiana is a judicial foreclosure state, the length of time for foreclosing on a Louisiana home might differ depending on the court schedule, just like in other judicial foreclosure states. Most of the time, it takes a lender between six and nine months to foreclose a Louisiana property.

Short Summary:

  • Foreclosure in Louisiana is a legal process that allows lenders to take back and sell a property if the borrower defaults on their mortgage. The foreclosure timeline in Louisiana can vary depending on the court schedule, but it generally takes six to nine months for a lender to foreclose on a property. There are two main types of foreclosure in Louisiana: executory process and judicial foreclosure. 
  • The foreclosure process in Louisiana starts with the first missed mortgage payment. The lender will then contact the borrower to urge them to resume making payments. If the borrower cannot resume making payments, the lender will start the foreclosure process. The foreclosure process includes a notice of default, a trustee sale, and an auction. If the property is not sold at auction, it becomes REO (real estate-owned) by the lender. The lender will then evict any tenants from the property.
  • The executory process is the most common type of foreclosure in Louisiana. It is a faster process than judicial foreclosure because the borrower has already agreed to it in the loan documents. In an executory foreclosure process, the lender files a request with the court, along with proof of the debt. If the court approves, the lender can seize the property and sell it. The borrower has the right to challenge the foreclosure in court.

What Is Foreclosure?

Foreclosure happens when a lender seizes property backed by a mortgage loan after the debt has gone unpaid for a certain time. The time varies by jurisdiction, although usually no less than 120 days. 

Mortgage loans need collateral in the form of the house being purchased, which means the lender has the right to seize and sell the house to recover lost money if the borrower fails to pay the loan.

In a Louisiana Foreclosure, You Will Almost Certainly Be Granted the Following Rights:

  • Receive a breach letter informing you before the foreclosure
  • Apply for loss mitigation
  • Receive notification of the foreclosure
  • If you’re in the military, you can get special protections, 
  • Pay off your loan to stop a foreclosure sale, 
  • Keep any extra money after the foreclosure sale.

So, if you’re a Louisiana homeowner behind on your mortgage, don’t get caught off guard. Learn what happens when you miss your first payment in Louisiana and how the foreclosure auction works. Once you know what to expect, you can make the best of the situation and figure out how to avoid losing your house altogether, if not at least get through the process with little stress.

How Long Will You Wait for a House Foreclosure in Louisiana?

Facing foreclosure can be stressful, and understanding the timeline in Louisiana can help you navigate your options. The foreclosure timeline varies significantly, but the stages are consistent.

  • First missed payment: Following the first missed mortgage payment, the lender contacts the borrower to urge them to resume making their payments.
  • Mortgage default: A mortgage is said to be in default when it is 90 days past due, or when the borrower has been in arrears for four consecutive months.
  • Notice of default: When a debt is 90 days past due, the lender normally serves a notice of default, announcing its intention to foreclose. Unless the borrower gets their payments up to date, the letter usually implies that judicial foreclosure will begin in 90 days. (This signals the beginning of the preforeclosure stage.)
  • Start of foreclosure: If the borrower cannot resume making payments, the lender asks the appropriate court to start foreclosure. The court names a trustee to run the auction of the property. 
  • Notice of trustee sale: In line with local laws, the trustee displays signs in public locations and publishes notices in local publications several weeks before the auction, defining the property and its location and indicating when it will be auctioned.
  • Auction: The trustee auctions off the property, establishing a minimum offer based on the appraised value, the outstanding mortgage payment, other liens linked with the property, and any unpaid tax bills. The property is awarded to the highest bidder who meets or surpasses the minimum bid.
  • Real estate-owned (REO): If the minimum bid is not met, the foreclosed property becomes REO, or in the lender’s ownership. REO homes are sold as-is and are often available at below-market prices.
  • Notice of eviction: If the property is sold at auction or taken over as REO by the creditor, the tenants are given the notice to vacate the property if they have not already done so. If they don’t leave within a certain amount of time (say, 72 hours), police enforcement will usually escort them from the property, confiscate any possessions they leave behind, and padlock the property on behalf of the new owners.

What Is the Most Common Type of Louisiana Foreclosure?

In Louisiana, there are two ways for a lender to take back property if a borrower stops making payments on a loan. An executory process is a special court proceeding quicker than a regular foreclosure. That’s why it’s the most common type of foreclosure in Louisiana.

How Do Executory Proceedings in Louisiana Foreclosure Work?

In Louisiana, most foreclosures happen through an “executory proceeding.” It’s a faster way for lenders to take back and sell your property if you miss loan payments.

Here’s how it works:

  • The lender files a request with the court, along with proof of the debt (like your loan documents).
  • If the court approves, the lender can seize your property and sell it.

Why is this process faster?

The reason is that you most likely agreed to it when you first signed your loan papers.  These documents often include a clause that gives the lender the right to a “confession of judgment” if you don’t repay the loan. In simpler terms, you agreed that the lender would automatically win a foreclosure case if you stopped making payments.

This “confession of judgment” saves time because the lender doesn’t have to go through a long court battle. They need to file the request with the court, along with some documents like your mortgage agreement, and the court can order the sale of your home.

Sheriff’s Sale: What It Means for Your Home

If the court decides your property can be sold to pay off a debt, the sheriff can take it and sell it to someone new. The sheriff will personally hand you a notice with the date, time, and location of the sale. They can also leave it with a responsible adult living at your address. This is called domiciliary service.

If the sale is online, you’ll get another notice at least three days before it commences. This notice will tell you the website where you can bid and when the bidding starts.

You have at least 60 days from the court order before the sheriff’s sale happens. The sheriff will also advertise the sale in a newspaper at least twice, but they must wait a few days after giving you the notice first. If you want to stop the sale, you must challenge the foreclosure in court.

Speak With Our Monroe Bankruptcy Attorney Today!

The intricacies of Louisiana foreclosure law can make navigating the foreclosure process extremely challenging for homeowners facing financial hardship. Without a foreclosure lawyer, you may unknowingly waive your rights or agree to unfavorable terms. 

Do you worry about losing your home? If you are going through foreclosure or believe you will soon lose your house, you do not have to go through it alone. At E. Orum Young Law, our Monroe bankruptcy attorney knows the defenses that can help you keep your house while also saving you money. 

We’re here to help you get back on solid financial ground and get your head above water. We can assist you with both Chapter 7 and Chapter 13 bankruptcy. Our Louisiana bankruptcy lawyers provide top-rated representation, personal attention, and reasonable rates. Call us now for a free case review!Â