SLS 14RS-1498 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2014
SENATE BILL NO. 576
BY SENATOR LONG
EXECUTORY PROCESS. Provides relative to a deficiency judgment in a short sale.
(8/1/14)
AN ACT1
To enact R.S. 13:4106.1, relative to executory process and deficiency judgments; to provide2
relative to short sales; to provide for a waiver of deficiency judgment; to provide for3
terms, definitions, procedures and conditions; to provide relative to eligibility for4
participation; to provide relative to disclosure; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 13:4106.1 is hereby enacted to read as follows: 7
ยง4106.1. Deficiency Judgment; short sale exception8
A. For the purposes of this Section, the following terms shall have the9
following meanings:10
(1) "Short sale" means any real property sale in which the funds11
collected as a result of the sale are less than the amount due to the creditor.12
(2) "Deficiency balance" means any amount remaining due to the13
creditor after the payment of proceeds from the real property sale.14
(3) "Waiver of deficiency" means the agreement of the creditor to forego15
the pursuit of the balance due by the property owner after the real property16
sale.17 SB NO. 576
SLS 14RS-1498 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
B. This Section shall only apply to primary creditors and the real1
property owner who is considered to be an owner occupant under the terms of2
the financial obligation.3
(1) A real property owner who has not yet received a notice of seizure4
may enter into negotiations with the primary creditor for the purpose of a short5
sale.6
(2) Upon a determination by the creditor of eligibility based on7
applicable federal and state statutes, the creditor may forego executory8
proceedings and permit the real property owner to proceed with the short sale.9
C. The real property owner shall be represented by the creditor. When10
placing the real property on the market for sale pursuant to this Section, the11
real property owner may be represented only by a real estate licensee who has12
completed training in the short sale process or earned the Short Sales13
Foreclosure Resource designation or by an attorney in good standing with the14
Louisiana State Bar Association.15
D. In addition to any lender required documentation disclosing that the16
real property will be sold through the short sale process, an addendum shall be17
included with the Louisiana Real Estate Commission's mandatory purchase18
agreement. Such form shall be approved and available for use within thirty days19
of the effective date of this Section by the Louisiana Real Estate Commission20
and the Office of Financial Institutions. The form shall include information21
related to the notice of the short sale, warranties, extensions, termination of22
agreement, and references to any applicable provisions of law.23
E. A deficiency judgment shall not be sought by the creditor if all of the24
terms and conditions of the creditor are met at the act of sale.25
F. The creditor may proceed with executory process and seizure of the26
real property if the real property owner has not met all of the requirements of27
the creditor at the act of sale.28 SB NO. 576
SLS 14RS-1498 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Angela L. De Jean.
DIGEST
Long (SB 576)
Proposed law provides that for the purposes of proposed law, the following terms shall have
the following meanings:
(1)"Short sale" means any real property sale in which the funds collected as a result of
the sale are less than the amount due to the creditor.
(2)"Deficiency balance" means any amount remaining due to the creditor after the
payment of proceeds from the real property sale.
(3)"Waiver of deficiency" means the agreement of the creditor to forego the pursuit of
the balance due by the property owner after the real property sale.
Proposed law provides that proposed law shall only apply to primary creditors and the real
property owner who is considered to be an owner occupant under the terms of the financial
obligation.
Proposed law provides that a real property owner who has not yet received a notice of
seizure may enter into negotiations with the primary creditor for the purpose of a short sale.
Proposed law provides that upon a determination by the creditor of eligibility based on
applicable federal and state statutes, the creditor may forego executory proceedings and
permit the real property owner to proceed with the short sale.
Proposed law provides that the real property owner shall be represented by the creditor. The
real property owner may be represented only by a real estate licensee who has completed
training in the short sale process or earned the Short Sales Foreclosure Resource designation
or by an attorney in good standing with the Louisiana State Bar Association when placing
the real property on the market for sale pursuant to proposed law.
Proposed law provides that in addition to any lender required documentation disclosing that
the real property will be sold through the short sale process, an addendum shall be included
with the Louisiana Real Estate Commission's mandatory purchase agreement. Such form
shall be approved and available for use within 30 days of the effective date of proposed law
by the Louisiana Real Estate Commission and the Office of Financial Institutions. The form
shall include information related to the notice of the short sale, warranties, extensions,
termination of agreement, and references to any applicable provisions of law.
Proposed law provides that a deficiency judgment shall not be sought by the creditor if all
of the terms and conditions of the creditor are met at the act of sale.
Proposed law provides that the creditor may proceed with executory process and seizure of
the real property if the real property owner has not met all of the requirements of the creditor
at the act of sale.
Effective August 1, 2014.
(Adds R.S. 13:4106.1)