Foreclosure is the legal procedure employed by a creditor to seize property belonging to a debtor or guarantor and sell it at public auction in order to collect what is due the creditor on a defaulted promissory note.

Louisiana is a judicial foreclosure state. A creditor must go to court in order to foreclose a mortgage. Foreclosure is accomplished by either ordinary or executory process. Ordinary process is a proceeding against the individual debtor on the promissory note; executory process is a proceeding in rem against the collateral that has been mortgaged.

This chapter is about foreclosure defense and reversal; it does not address foreclosure prevention or avoidance. In almost all such situations, a potential client who is not yet a defendant in a state court foreclosure lawsuit should be referred to a HUD foreclosure counselor1  and should also be advised to strongly consider Chapter 13 bankruptcy.

• 1Pre-foreclosure counselors may be located here. Foreclosure assistance and advice may also be obtained by calling 888-995-HOPE (4673). HUD counseling is free, although it should not be considered a substitute for active attorney involvement in the client’s case.

Foreclosure defense is a complicated area of law. Missing a deadline or a defense could cost an individual’s home. Defending a state-court foreclosure lawsuit is also a malpractice trap for the unwary attorney.

Before committing to representing a client who is a defendant in a state-court foreclosure lawsuit, you must be sure that you have the time, the expertise, and access to the clerical capacity necessary to meet all critical filing deadlines. Otherwise, you should decline the representation and refer the prospective client elsewhere.

Do not expect the foreclosing creditor to consent to any extensions of time or deadlines to file pleadings or bonds or to delay the date of the judicial sale. Do not expect the usual professional courtesies from opposing counsel, such as acceptance of service or waiving formal service of process by the sheriff. The mortgage servicer (i.e., the foreclosing creditor) runs every aspect of the foreclosure process; opposing counsel in a residential foreclosure is more likely than not just a scrivener with little or no independent authority to make concessions.

A Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, is a federally insured loan that enables homeowners who are 62 years of age or older to withdraw some of the equity in their home or use the loan proceeds to refinance or buy a new primary residence. Unlike a traditional mortgage, no repayment is required until the borrowers no longer use the home as their principal residence or fail to meet the mortgage obligations. Borrowers are responsible for property taxes, general upkeep of the property, and keeping all required insurance premiums current for the property. The regulations that govern the origination and servicing of an HECM are available at 24 C.F.R. § 206. Importantly, 24 C.F.R. § 206.27(c)(1) provides that the mortgage balance will be due and payable in full if a mortgagor dies and the property is not the principal residence of at least one surviving mortgagor or if a mortgagor conveys all of his or her title in the property and no other mortgagor retains title to the property.