Foreclosure Law in Louisiana
In Shreveport, Louisiana, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was bought with the mortgage in the event that the borrower has defaulted on his or her payments.
When consumers have to deal with foreclosure, it almost always involves a home. The bank will typically take possession of the house, and then sell it at auction, to try to encompass the balance of the mortgage. Banks usually want sell the property quickly, for as much money as possible.
In every U.S. state, including Louisiana, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is just an auction supervised by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In some states, original mortgages are regarded "non-recourse" loans. This means that once the house or other property that secured the mortgage is sold, and if it sells for less than the balance of the mortgage, the lender has to absorb the loss, and cannot sue the borrower for the remainder. This usually does not apply to second mortgages or refinanced loans.
How to Possibly Avoid Foreclosure in Shreveport, Louisiana
Communication between you and your lender is perhaps the most significant way to prevent foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.
You should be mindful of the fact that your bank wants you to make your monthly mortgage payments - they likely aren't scheming to trick you into giving up your home. This isn't out of altruism, it's due to the fact that foreclosure is almost never as lucrative for the bank in the long run than a mortgage that is paid in full over a period of years or decades, with interest accruing the whole time. For a bank, a foreclosure is just a last resort to cut their losses.
If you face sudden expenses, such as medical bills or a lawsuit, which put a serious but relatively short-term strain on your finances, you should notify your lender instantly. You might find that they are willing to accept lower payments, if this will keep you from defaulting.
As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in Louisiana involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Shreveport, Louisiana real estate attorney help?
If you feel that your home is close to being foreclosed in Shreveport, Louisiana, and want to try to prevent this, the advice and assistance of an experienced real estate lawyer can mean the difference between keeping or losing your home.