Traditionally, Louisiana law has provided few protections to homeowners in foreclosure. But a new law, the Louisiana Home Protection Act, helps Louisiana residents going through foreclosure by requiring foreclosing lenders to provide more information to homeowners about their options to avoid foreclosure.
(For more articles on Louisiana foreclosure law, visit our Louisiana Foreclosure Law Center.)
How Foreclosures Happen in Louisiana
The most common method of foreclosure in Louisiana is called “executory process.” In this type of foreclosure, the foreclosing lender does not have to sue the borrower in court. Instead, if the borrower defaults, the lender merely files a foreclosure petition with the mortgage attached and the court summarily orders the property seized and sold. The homeowner can fight the foreclosure only by appealing or bringing a lawsuit.
In order to use executory process, the mortgage document must have a clause where the borrower agrees or “confesses” to a judgment if he or she defaults. Most residential mortgages in Louisiana have this clause. If the mortgage document doesn’t have this clause, then the lender must sue the homeowner in court – this is called a judicial foreclosure. (To learn more see Summary of Louisiana’s Foreclosure Laws.)
The Louisiana Home Protection Act
Recently, the Louisiana legislature passed, and the governor signed into law Act No. 339, also referred to as the Louisiana Home Protection Act. This new law amends existing foreclosure law to add more protections for homeowners in foreclosure.
60 Days Notice
Under the new law, the foreclosure sale date cannot be earlier than 60 days after the court signs the order allowing the sale.
Information in Foreclosure Sale Notice
When the sheriff serves notice of the sale date on the homeowner in a residential foreclosure, the notice must include specific language about the homeowner’s rights and available assistance, including that:
- the sale date may change and that the borrower can get information about this from the sheriff’s office
- the homeowner may be able to avoid foreclosure by contacting the lender and entering into a loss mitigation agreement
- the homeowner may be able to avoid foreclosure by reinstating the loan (bringing the account current and paying certain costs and fees), and
- housing counseling services are available free of charge through the U.S. Department of Housing and Urban Development and the Louisiana Housing Corporation.
Effective Date of the Louisiana Home Protection Act
The Act went into effect on August 1, 2013, so it applies to foreclosures filed on or after that date.
Getting More Information
The law is found in Louisiana Revised Statutes § 13:3852 and the Louisiana Code of Civil Procedures, § 2293(B)(1). You can find the text of The Louisiana Home Protection Act on the website for the Louisiana State Legislature at www.legis.la.gov/legis.