Executory process: A swift process used by creditors to seize and sell property to satisfy a debt.
Executory process: A proceeding used to seize and sell property, without prior citation and judgment against the debtor, in order to enforce the terms of a mortgage contract.
Executory Process: An Accelerated Alternative to Traditional Foreclosure
With an executory process, the homeowner recognizes a judgment in the mortgage contract, meaning if they default, the bank can file a foreclosure claim with the court, along with a copy of the mortgage, and the court will summarily order the seizure and sale of the property.
Usually, a judgement will be issued the same day the petition is filed, allowing the bank to sell the property.
“Most banks prefer the executory proceeding because it’s fast, and there’s a good chance that you already consented to it when you signed your mortgage documents,” says Louisiana attorney Amy Loftsgordon. “Most Louisiana mortgage contracts include language that entitles your lender to a “confession of judgment” if you fail to make the mortgage payment. In other words, you agreed that the lender would automatically win a foreclosure case if you didn’t stay current. A confession of judgment lets the bank avoid lengthy litigation.”
For a homeowner to fight the judgement, they must appeal the foreclosure or file an objection to stop the executory process. Recent changes in Louisiana law also offer some protections for homeowners involved in an executory process.
“Act 339 of the 2013 Louisiana Legislative Session, entitled the Louisiana Home Protection Act went into effect on August1, 2013 and now requires the Sheriff serving the Notice of Seizure to include information about options that might stop the foreclosure,” says New Orleans bankruptcy attorney Kevin Gipson. “The Louisiana Home Protection Act, which was introduced by Louisiana State Senator Sharon Weston Broome, requires a notice to accompany the Notice of Seizure advising the consumer that if the foreclosure involves a residential property, the consumer may be able to bring their account current by entering into a loss mitigation agreement with their lender, or by paying all of the payments, costs and expenses owed by the consumer within the time permitted by law for reinstatement of the loan.”
The act also advises the homeowner to seek legal counsel and to receive free foreclosure prevention counseling services through a housing counselor, as well as loss mitigation services.