HLS 11RS-820 ORIGINAL
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2011
HOUSE BILL NO. 266
BY REPRESENTATIVE CHANEY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
MORTGAGES: Provides for a purchase money mortgage
AN ACT1
To enact Civil Code Article 3307(4), relative to the ranking of mortgages; to provide for the2
ranking of mortgages when the proceeds are used for the purchase of an immovable;3
and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. Civil Code Article 3307(4) is hereby enacted to read as follows: 6
Art. 3307. The effect and rank of mortgages 7
A mortgage has the following effects: 8
* * *9
(4) When the proceeds of a mortgage are used by the mortgagor to purchase10
immovable property, the mortgagee shall have the same ranking as a vendor in11
accordance with the rules set forth in Article 3251.12
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Chaney HB No. 266
Abstract: Provides for the ranking of mortgages when the proceeds are used for the
purchase of an immovable.
Present law provides that a mortgage has the following effects:
(1)Upon failure of the obligor to perform the obligation secured by the mortgage, the
mortgagee may cause the mortgaged property to be seized and sold in the manner HLS 11RS-820 ORIGINAL
HB NO. 266
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
provided by law and have the proceeds applied toward the satisfaction of the
obligation.
(2)The mortgaged property may not be transferred or encumbered to the prejudice of
the mortgage.
(3)The mortgagee is preferred to the unsecured creditors of the mortgagor and to others
whose rights become effective after the mortgage becomes effective as to them.
Present law (C.C. Art. 3251) provides that if there are several successive sales, on which the
price is due wholly or in part, the first vendor is preferred to the second, the second to the
third, and as provided by present law (C.C. Art. 3186), and assuming timely recordation as
provided in present law (C.C. Art. 3274), each such vendor is preferred to the previously
recorded mortgages of his vendees and their successors.
Proposed law retains present law and provides that when the proceeds of a mortgage are
used by the mortgagor to purchase immovable property, the mortgagee shall have the same
ranking as a vendor in accordance with the rules set forth in present law (C.C. Art. 3251).
(Adds C.C. Art. 3307(4))