Louisiana Counties

State Auction Process in Louisiana

Louisiana operates as a tax lien state, which means that when property taxes become delinquent, a lien is sold against the property.

Power of Sale Foreclosure Guidelines

Louisiana has a unique tax lien process that allows investors to bid on a percentage of ownership in a property, rather than the entire property. This is called the “ownership interest bid-down method.”

How it Works: At a tax lien auction, investors bid on the percentage of ownership they want in a property. The investor who bids the lowest percentage wins the property. For example, if a property is worth $100,000 and the minimum bid is 1%, the winning bidder would own $1,000 worth of the property.

The Risks: There are two main risks associated with bidding on a percentage of ownership in a property:

The property owner may redeem the property before it is foreclosed. If the property is redeemed, the investor will only receive a 5% penalty plus a 1% per month penalty on their investment.
The investor may own less than 100% of the property after it is foreclosed. If this happens, the investor will need to sue the property owner to force the sale of the property on the open market. This could be a costly and time-consuming process.

The Rewards: The potential rewards of bidding on a percentage of ownership in a property are high. If the property is not redeemed and the investor owns 100% of the property, they will become the full owner of the property. If the investor owns less than 100% of the property, they will still receive a share of the proceeds when the property is sold on the open market.

How to Get Started: All auctions are held on the website https://www.civicsource.com/auctions/?state=22. Investors can easily identify and initiate the auction process by placing a deposit on the property of interest. This starts the legal research and notification process. If someone pays all delinquent taxes and fees during the process, the depositor receives their deposit back.

Once the auction date is set, the depositor is notified, and the auction goes live. The depositor can place their bid, starting from the minimum starting price determined by the taxing authority. The highest bidder at the auction wins the property. If the depositor is not the winning bidder, their deposit is refunded, and the winning bidder is charged that amount. CivicSource.com handles all the legal documentation and schedules a closing to transfer the deed to the purchaser.

Foreclosures in Louisiana

In Louisiana, lenders may foreclose on a mortgage in default by using the judicial foreclosure process. This is a legal process that allows a lender to take ownership of a property if the borrower defaults on their mortgage.

The judicial foreclosure process in Louisiana can be divided into two main types: executory process and ordinary process.

Executory Process

Executory process is a faster and simpler type of foreclosure process that is available to lenders who have a mortgage that includes an “authentic act that imparts a confession of judgment”. This means that the borrower has signed and acknowledged the obligations of the mortgage in the presence of a notary public and two witnesses.

If the borrower defaults on their mortgage, the lender can file a lawsuit against the borrower in court. Once the lawsuit is filed, the court will issue an order for the executory process to begin. The borrower will then be served with a demand for the delinquent payments. The borrower has three days to pay the delinquent payments, or the court will order a writ of seizure and sale. The property will then be sold at a public auction.

Ordinary Process

Ordinary process is a more traditional type of foreclosure process that is available to lenders who do not have a mortgage and includes an “authentic act that imparts a confession of judgment”.

If the borrower defaults on their mortgage, the lender can file a lawsuit against the borrower in court. Once the lawsuit is filed, the court will issue a summons, which is a legal document that tells the borrower about the lawsuit and requires them to appear in court.

If the borrower does not appear in court, the lender can request a default judgment. A default judgment is a judgment that is entered against the borrower without their input. If the borrower does appear in court, the lender will have to prove that the borrower is in default on their mortgage. If the lender is successful, the court will issue a foreclosure decree.

A foreclosure decree is a court order that allows the lender to sell the property. The sale must be conducted at a public auction. The borrower has the right to redeem the property up until the day of the sale. Redemption means that the borrower can pay the delinquent mortgage payments, plus interest and fees, and keep the property.

Quick Facts

– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: No
– Primary Security Instruments: Mortgage
– Timeline: Typically 60 days
– Right of Redemption: No
– Deficiency Judgments Allowed: Yes