Louisiana is a state where the only way a bank can foreclose is by using the courts. You see, almost ninety-nine percent (99%) of the average citizens do not have a clue about how the real money is made in the mortgage business. Foreclosure is when the lender takes back property when the homeowner fails to make payments on a mortgage. This means you will have an additional monthly payment on top of your monthly mortgage payment.
However, if the property has junior liens, the lender will not accept a deed in lieu of foreclosure because the junior liens will stay attached to the property. Many homeowners simply walk away from their homes believing they don’t have equity or can’t sell their home while it is in foreclosure.
But the first goal for homeowners is to stop the foreclosure process from running them over before they are out of options and out of time. Whatever the cause of a person getting behind on their mortgage payments, the process from that point onwards is fairly set.
These filings include default notices, scheduled auctions, and bank repossessions. See the chart (in “Foreclosure Comparison”) to compare some other options: Short Sale and Mortgage Release (Deed-in-Lieu of Foreclosure). A foreclosure is the legal process where your mortgage company obtains ownership of your home (i.e., repossess the property).
To officially begin the foreclosure, the lender (or subsequent owner of the loan) files a lawsuit in state court. When the time comes, the mortgage investor or its representative, the trustee, will put the home up for auction. As with court foreclosure of a trust deed, if there is not enough cash to pay the judgment, the buyer is responsible for paying the difference to the seller.