Can You Sell a House in Foreclosure in Louisiana?
Yes, you can sell a house in foreclosure in Louisiana, BUT you must act quickly and ensure you talk to the right people. It would be best if you got a legitimate signed offer on your home well before the auction date.
More than that, be sure you’re talking to the right people who will shoot straight with you. Many people unnecessarily go into foreclosure based on the wrong information. Don’t be one of them!
Disclaimer: This article provides general information. We are not attorneys. You should always consult an attorney or financial advisor knowledgeable about this area of the law and your particular situation.
Sell My House in Foreclosure in Louisiana
The heart of a family is its home, but it can feel like a jail when mortgage payments are overdue. Louisiana homeowners behind their mortgage payments are likely to lose their homes and should educate themselves as soon as possible on the foreclosure process.
The time frame for a foreclosure in Louisiana is short. Many states have a right of redemption, one’s ability to reclaim a property even after the foreclosure sale, but Louisiana isn’t one of them.
Calling Louisiana Direct Home Buyers is a good thing to do very early.
Time is of the Essence
Because Louisiana is a judicial foreclosure state, the time it takes to foreclose on a Louisiana home might differ depending on the court schedule. That’s why it is less consistent than non-judicial states like Texas. A lender usually takes between 6 and 9 months to foreclose on a Louisiana property.
Time is of the essence. If you are behind on your payments, you should call someone fast. Louisiana Direct Home Buyers is glad to talk to you about how we can purchase your house and make it as hassle-free as possible.
Selling a Louisiana house during foreclosure is possible, but you must consider the lender. In most states, the lender cannot foreclose a property if it has received a legitimate offer.
The homeowner should prove that such a cash offer exists and arrange for closing as soon as possible. Louisiana Direct Home Buyers will help out in any way we can.
What is Foreclosure in Louisiana?
Foreclosure occurs when a lender exercises the mortgage loan terms, allowing it to seize the asset (house) after the borrower falls behind on payments for a certain period. The length of time varies by jurisdiction, although it is usually no less than 120 days.
Louisiana is a “judicial state, “meaning the court is involved in each home mortgage foreclosure. Two types of judicial foreclosures exist in Louisiana: 1) ordinary and 2) executory.
The Executory Process
Most foreclosures in Louisiana follow the executory process. The code found at this link governs all foreclosures in Louisiana. La. Code Civ Proc. Ann. Arts. 2631 to 2772 and 3721 to 3753.
In Louisiana, most mortgages contain a particular specific clause in the mortgage, allowing the lender to simply present the court with a certified copy of the mortgage and original note to foreclose. The court then will order that the foreclosure process start.
That is why you will often read that the length of time varies. While true, most consumers must prepare for a shorter time.
Service of Notices and Writs
When the court orders the foreclosure process to start in Louisiana, the borrower receives a notice from the sheriff, providing a brief period to pay the overdue amount to the lender. During this time, homeowners can negotiate a deal with the lender.
Unlike many states, Louisiana has no mandatory mediation program for homeowners.
If the homeowner doesn’t pay, the court will start the foreclosure. The lender then advertises the property for 30 days and can sell it at auction.
Personal Note from Becky:
I cringe every time I edit our web page regarding foreclosures. It is tough losing your home. But I’ve learned that facing the music and calling for help sooner rather than later saves a lot of grief for everyone, especially your loved ones. Look at the video testimonial below of someone who called us about his financial situation before it got too bad. Our process allowed him to walk away with a bit of cash in his pocket and a clear credit record. Just call us. We’ll shoot straight with you.
What Happens to Me in a Foreclosure?
The lender is foreclosing to recoup its loss on your mortgage. This foreclosure impacts you in many ways, including:
Eviction from Your Home
In addition to losing any equity you had built up in your home, the sheriff will forcefully remove you from your home following the auction.
Deficiency Balance Owed
You still owe the lender, and they may sue you for the difference between the obligation per the mortgage and the amount received at auction. However, the lender must take separate actions to collect this balance owed.
Timeline of the Foreclosure Process in Louisiana
The Foreclosure Timeline Varies Significantly, but the Stages are Consistent. Understanding this timeline helps you know how to sell a house during the Louisiana foreclosure process. Generally, this process has six phases. This article from Forbes explains the process very well.
1. First Missed Payment
After the borrower misses the mortgage payment the first time, the lender contacts the borrower to urge them to resume timely payments. The lender usually has a grace period of 15 days, after which the borrower incurs a late fee.
Some lenders are quick to report a late payment to the credit bureaus.
2. Mortgage Default
Many websites state that a mortgage defaults when it is 90 days past due, but as we noted above, in 2014, the Dodd-Frank legislation impacted this by generally extending it to 120 days (see below). Our experience is that it does not matter. If you are behind on your mortgage, there is likely a reason, and calling us sooner rather than later will be the way to go.
3. Notice of Default (NOD)
Generally, the process cannot start until the borrower is 120 days behind on payments. This notice marks the beginning of the pre-foreclosure stage.
4. Start of Foreclosure (or Pre-Foreclosure)
The lender can ask the court to start foreclosure if the borrower can’t catch up on payments. The court will appoint someone to handle the auction of the property. The foreclosure timeline can differ based on the lender, the Parish, and the judge.
Most mortgages in Louisiana let the lender go to the judge and start foreclosure quickly after 120 days. However, busy court schedules can slow down the process, as the court needs to approve each step.
5. Notice of Trustee Sale
Depending on local laws, the trustee posts notices in public locations and local publications several weeks before the auction, defining the property and its location and indicating the auction schedule.
- Auction: The trustee auctions off the property, establishing a minimum offer based on the appraised value, the outstanding amount owed, other liens, and unpaid taxes. The highest bidder who meets or surpasses the minimum bid gets the property.
- REO: If nobody bids the minimum amount, the property becomes real estate-owned (REO), meaning the lender is now the title holder. Banks sell REO properties in another process as-is and often well below market prices.
6. Notice of Eviction
After your property is sold at auction or becomes Real Estate Owned (REO), you will get a notice of eviction soon after. If you don’t leave within the given time (which can vary), the sheriff will escort you out, take any belongings you leave, and lock up the property for the new owners.
Eviction can be very stressful and disruptive for your family. To avoid losing your home and facing eviction, it’s important to act quickly if you’re having trouble with your mortgage. Reach out for help as soon as possible to explore your options and prevent foreclosure.
Should I just let the bank foreclose?
Letting the bank foreclose on you is always an option if you have no home equity, but it will significantly impact your credit rating, which will stay with you for years.
You will have problems getting credit, and if you’re successful, you will pay a higher interest rate than others because you’re considered a risk. It would be best if you tried to avoid foreclosure. Many options exist to do this. If you face foreclosure, don’t ignore it.
Reach out to Louisiana Direct Home Buyers, and we will see if selling your property could be successful so you can keep some of the equity in your house.
Can You Sell a House in Foreclosure in Louisiana?
Yes, you can sell your house in foreclosure in Louisiana. At any time before the Sheriff Sale occurs, you can sell your house before the foreclosure and pay your mortgage off with the proceeds. If you sell your house before foreclosure, you can save your credit rating and collect what equity you have in the house.
Considerable fees associated with a foreclosure kick in when it goes to auction; at this point, you might lose all your equity. Because of these fees, you should act as fast as you can when your notification of foreclosure comes. It’s possible to stop foreclosure at the last minute, but it’s risky.
The sooner you seek help, the more likely you will be able to get at least some of your equity out of it. Reach out to Louisiana Direct Home Buyers!
Selling a house before foreclosure gives you many benefits, including:
No foreclosure on your credit record.
A foreclosure stays on your credit record for usually seven years. You won’t have the difficulty securing loans you would have with a bad credit record.
You can buy another house.
A foreclosure on your credit history would make it difficult to obtain a new mortgage. Selling your home helps you avoid this, and you will secure new housing immediately.
No deficiency balance.
As mentioned earlier, the bank may ask you to pay for a deficiency balance if the proceeds of the property couldn’t cover the mortgage and other fees.
If you sell your home during the foreclosure process, you’ll get enough money to pay the mortgage, especially if you hire a great real estate agent.
Can you stop a foreclosure at the last minute?
Yes, you can stop a foreclosure just before a sheriff’s sale, but it’s risky. Don’t wait too long to act. Selling your house can take time, so you need to act quickly to avoid foreclosure.
Selling your property to an investor like Louisiana Direct Home Buyers helps because we can act rapidly, close quickly, and abort foreclosure.
Summary: Can You Sell a House in Foreclosure Louisiana?
In Louisiana, nothing prevents you from selling your house in foreclosure except TIME IS SHORT. The process is more complex, but we have done this before and have worked with the state’s leading title attorneys. We want you to avoid foreclosure and get back to your life.
When you receive a Notice of Default, take action immediately. Call Louisiana Direct Home Buyers, and we will be honest and upfront with you.
If the auction date is close, contact us at Louisiana Direct Home Buyers. We have helped homeowners like you avoid foreclosure right before auction by offering cash for their house (our offers are free). Please fill out the form below or call us at (504) 732-1988.
Testimonial
Becky’s Promise
Louisiana Direct Home Buyers is a cash home-buying company that does it right.
Over the years, I have learned that keeping your word is the most important thing you can do when doing business with people. I have raised a large family and watched my kids achieve things greater than me.
As the controller and CFO, I helped my husband grow an engineering firm from 1 person to 65. I have also been investing in real estate for ten years.
Throughout my life, I have confirmed what my dad always told me: “Your life is as good as your word; keep your word!” I promise to treat you fairly, respect your time, and value it.
Working with me is completely free of obligation. I’ll give you a 100% FREE cash offer for your house, and you’ll be under no obligation to accept it. We are straight shooters.
Feel free to call today. It’s an emotional decision to sell your house to us. I’ll make it as easy as I can for you. 🙂