LA Underwriting Summary

Search/Exam

• Minimum Search Requirements -- Statute requires 30 years for purchases or longer, if necessary, in order to reach an arms-length sale between unrelated, third parties. 10 years for refinance but still need a 20 year Fed Lien Search. La RS 22:512(17)(b)(vi)(gg). State Bar association requires 35 years or such longer period of time as may be necessary to commence the examination with a conveyance for consideration.
• Plant or other search restrictions -- No
• Additional Requirements for REO Searches --
• Foreclosure Checklist --
• Special Searches Required (Code, HOA, Utilities)? --
• Survey Requirements --
• Title examiner must be LA licensed Attorney.

UPL

• UPL Hot Button Issues -- Attorney Certification Required

Any title insurance report or title insurance policy shall be based upon an examination of title, which shall be conducted only by LA licensed attorneys. The examination and resulting opinion, if it furnishes the basis of a title insurance report or title insurance policy, shall be reduced to writing by the attorney. La R.S. 22:512(17)

Vesting

• Separate or Community property,
• Louisiana does recognize components of property ownership known as "usus," which is the right to use the property, "fructus," which is the right to use the fruits produced by the property, and "abuses," which is the right to alienate the property. A "usufruct," combining the components of usus and fructus, allows a person the right to enjoy the property while ownership of the property is vested in another. Ownership in division is the ownership of something by two or more persons, generally presumed to be by equal shares. All owners must sign a sale or a mortgage, including usufructuaries and naked owners, unless the usufructuary is given the power to sell or mortgage in his or her acquisition.
• Attachment of Liens: Liens, called “privileges” in Louisiana, are of two sorts, statutory and contractual. Statutory liens, such as that in favor of workmen and material suppliers, can attach to the property even if the services were ordered by a non-owner. However, the lien must identify the proper owner of the property to attach. Contractual liens, such as mortgages, attach when the proper owner signs a document, such as a mortgage, and the document is recorded. Where property is community, both spouses must sign the mortgage, and the signature of one spouse may not be effective, even as to that one spouse’s share.

Judgment liens against either spouse will attach to the entire community property, not just that spouse’s half.

Mortgage/Transfer Tax

Orleans Parish only has a documentary tax that applies to conveyances and mortgages. Generally, the fee is $325 for the first 25 pages. Contact New Orleans Notarial Archives for an accurate calculation at 504-568-8577.

Spousal Joinder Requirements/Homestead

Spousal joinder required if community property. There are two “homestead exemptions” in Louisiana. The first deals with a special ad valorem tax break for home owners who live in their property. The first $75,000 of homestead value is exempt from real estate taxes. The second “homestead exemption” deals with bankruptcy, and allows a person who files bankruptcy to shield the first $25,000 of value from creditors who did not obtain a waiver of this “homestead exemption.” the owner of a homestead must waive this second “homestead exemption” in the mortgage. Most LA forms contain such a waiver in boilerplate language.

Mortgage/Deed of Trust Requirements

In Louisiana, the mortgage is the instrument used to secure real property loans; common law deeds of trust are not permitted. A "conventional" mortgage is established by contract, a "legal" mortgage is established by operation of law, and a "judicial" mortgage is established by law to secure a judgment. A "general" mortgage burdens all present and future property of the mortgagor, while a "special" mortgage burdens only certain specified property of the mortgagor. Conventional mortgages are special mortgages. Judicial and legal mortgages are usually general mortgages.

Only a written contract may establish a conventional mortgage. The writing may be either an authentic act or an act under private signature, although it is customary for mortgages to be in authentic form for purposes of quick foreclosure. The conventional mortgage must state precisely the description of the immovable property over which it is granted, state the amount of the obligation or the maximum amount of the obligations that may be outstanding at any time and from time to time that the mortgage secures, and be signed by all those who have the power to alienate the property. The mortgagee need not sign the contract of mortgage.

When a creditor lends money to a Louisiana debtor, usually a promissory note is signed as evidence of the debt, although this is not absolutely necessary. The promissory note indicates the amount owed and the interest rate to be charged over a certain period of time.

Time Limitations

• US Judgment Liens -- 20 years
• State Court Judgment Liens -- 10 years
• Federal Tax Liens -- 10 years (+ 30 days)
• State Tax Liens -- 10 years
• Estate Tax Lien -- 10 years
• State Inheritance Tax Liens --
• Mechanics Liens -- 1 year
• Financing Statements -- 5 years
• Mortgages --
• HOA Liens --
• Condominium assessments --
• Child Support Liens --

Odd Stuff

• R.S.9:5167.1 allows a notary, attorney or title agent (who paid a mortgagee that failed to return a cancellation form within 60 days) to file an affidavit and cancel the paid mortgage. Two other statutes allow for the filing of an affidavit by the notary, attorney, title agent or title insurer who has misplaced a release received from a mortgagee to cancel the released mortgage. See, R.S. 9:5167 and R. S. 9: 5168.

• No Purchase Money Mortgage Protection for real property. Must search buyer for possible judgments.
• Any requirement of Arbitration in an insurance policy is not enforceable in Louisiana