Louisiana Provisions Regarding Cancellation of Mortgages
Louisiana has passed House Bill 172 which provides for the cancellation or partial release of inferior mortgages and liens on a property sold at sheriff’s sale. HB 172 provides that where an inferior mortgage or lien on a property sold through judicial sale is not canceled as required by Code of Civil Procedure 2376, the creditor selling the property or its attorney may cancel or partially release the mortgage or lien by recording in the land records an “affidavit to cancel an inferior encumbrance.” The affidavit may only be filed if the inferior creditor was provided with written notice of sale prior to the judicial sale. The affidavit must include, inter alia: the name, address, telephone number and email address of the attorney for the creditor seizing the property; the name of the court, case name, and docket number of the action; the date of the judicial sale; a description of the foreclosed mortgage or lien including its recording information; a description of the foreclosed property; and a description, including recording information, of the subordinate lien. Upon the recording of an affidavit that is in compliance with the aforementioned requirements, the clerk of court shall cancel or partially release the lien. An affidavit to effect the cancellation or partial release of a mortgage or lien is not effective if the mortgage or lien to be cancelled or partially released is actually superior to the foreclosing creditor.
These provisions take effect August 1, 2018 and the full text of HB 172 may be found at: https://legiscan.com/LA/text/HB172/id/1801017/Louisiana-2018-HB172-Chaptered.pdf
Adam Faria, JD, is a regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at Suffolk University Law School. He is admitted to the bar in Massachusetts and New Hampshire.
Comments are closed.