2014 Louisiana Laws
Revised Statutes
TITLE 6 - Banks and Banking
RS 6:830 - Security for loan on movable and immovable properties; purchase and sale of property

§830. Security for loan on movable and immovable properties; purchase and sale of property

A. Except as otherwise provided in this Chapter, every loan on immovable property shall be secured by a mortgage upon the property, accompanied by a certificate of the attorney of the association to that effect, and also, where applicable, accompanied by a pledge to the association of any shares or savings accounts borrowed upon. Such mortgage shall provide specifically for full protection to the association with respect to the loan and additional advances, and the usual insurance risks, taxes, assessments, other governmental levies, maintenances, and repairs. The mortgage may provide for an assignment of rents, and if such assignment is made, any such assignment shall become absolute upon the mortgagor's default, becoming operative upon written demand by the association. A declaration of the pledge creates a valid and complete pledge of the shares or savings accounts and of all future payments or credits thereon.

B. Every loan on home appliances and equipment shall be secured by a mortgage thereon, and may be accompanied by a pledge to the association of any savings accounts or shares borrowed, which pledge shall be executed in the same manner as a pledge of savings accounts or shares for loans on immovable property.

C. Repealed by Acts 1995, No. 1087, §5.

D.(1) If an association, to accomplish any of the powers granted it pursuant to this Chapter, purchases or secures property from any person and afterward sells or disposes of the same property to a borrower, the association has a privilege of equal rank as the vendor's privilege upon the property so acquired, sold, and disposed of for the security of the payment of the money due by the borrower.

(2) An association may contract with any person to acquire or purchase from him any property and afterward to sell or dispose of the same property to a borrower even though the agreement is at one and the same time. This contract shall not be considered or treated as a loan, but as a purchase or acquisition by the association and a sale by the association to the borrower, and the association, to secure payment of the amount due by the borrower, has a privilege of equal rank with a vendor of immovable property and enjoys for the protection of its claim and the enforcement of its loan all the rights, privileges, and securities which are now accorded by law to the vendor of immovable property.

(3) In the act of sale or repurchase the vendee may waive the three day notice required by the Code of Civil Procedure in obtaining orders of seizure and sale by executory process.

E. In all sales made by associations of property acquired by them for the purpose of making a loan on the security of such property, the warranties and obligations imposed by law on vendors shall not apply to such associations.

F. Any mortgage recorded as provided by this Section remains in full force and effect without the necessity of being reinscribed in the mortgage records for a period of forty-one years from the date of inscription. The recordation of the authentic act evidencing mortgage on home appliances and equipment in the same manner as the mortgage on immovable property shall be binding on third persons and need not be reinscribed for thirty-one years from the date of inscription.

G.(1) In all cases where immovable property is sold partly for cash and partly for credit and the credit portion of the purchase price is represented by a note secured by vendor's privilege and special mortgage, the note may be made payable to any association doing business under this Chapter and the association may purchase this note from the vendor. This note and vendor's lien or mortgage or obligation shall have the same preference and priority over other liens, charges, privileges, and encumbrances and shall have the same legal force and effect as if the vendor had sold the property to the association and the association had thereupon sold the property back to the purchaser, and shall in every regard enjoy the same rank as the vendor privilege and mortgage created under the provisions of Subsections A and C of this Section.

(2) There may be inserted in the act of sale any and all provisions applicable to loans made through such associations and to the vendor's privilege and mortgage held by them, including a subscription to shares in the association, and the pledge of such shares or any savings accounts, and the purchaser's agreement to abide by the regulations of the association as set out in its articles of incorporation and bylaws.

(3) The association may intervene in the act of sale through its proper officer and acknowledge and accept the undertakings of the purchaser in its favor.

(4) This act of sale with vendor's privilege and mortgage, if recorded within three working days of its execution, when the registry is required to be made in the parish where the act was executed, and within five working days, if the registry is required to be made in any other parish of this state, shall have the same priority with regard to the effective date of recordation as is accorded vendor's privileges under the provisions of Louisiana Civil Code Article 3274, without regard to the time for recordation as provided therein. The vendor's privilege provided for in this Subsection shall remain in force for a period of forty-one years from the date of inscription. Any note secured by a vendor's privilege and mortgage of the kind authorized by this Subsection shall have the same rights, privileges, priorities, and exemptions which have previously been had by notes payable to associations and secured by a vendor's privilege and mortgage set forth in sales of property by the association to the purchaser.

(5) This Subsection shall be liberally construed in favor of all rights, preferences, priorities, and exemptions previously regarded as being had by notes secured by a vendor's privilege and mortgage in favor of an association, and nothing contained in it shall be construed to diminish, detract from, or eliminate any rights, preferences, priorities, and exemptions.

H.(1) All mortgages executed upon immovable property in Louisiana in favor of associations organized and operating under the laws of the state shall have a rank equal to that of a vendor's privilege upon immovable property and shall have priority over all other liens, privileges, encumbrances, and mortgages upon the property, and the improvements and component parts thereon which are recorded or arise in any manner subsequent to the date of recordation of the mortgage in favor of the association, including tax privileges of any nature and character, except ad valorem taxes on immovable property and assessments for paving.

(2) If any mortgage provided for in this Section is placed on record within three working days of its execution, when the registry is required to be made in the parish where the act was executed, and within five working days, if the registry is required to be made in any other parish of this state, it shall have and enjoy the same priority in regard to the effective date of such recordation as is accorded vendor's liens under the provisions of Louisiana Civil Code Article 3274, without regard to the time for recordation as provided therein. The mortgages provided for in this Section shall remain in force for a period of forty-one years from the date of their filing or for a period of forty-one years from the date of any reinscription.

(3) The associations adopting the procedure set forth in this Section shall have all of the rights and privileges of a vendor to the same extent and in the same manner as if a sale to the association, and a sale by the association to a borrower had in fact been consummated, the intent of this Section being merely to provide an optional procedure without altering in any manner any of the rights accorded to, and obligations incurred by, associations prior to the passage of this Section.

I. No mortgage provided for in this Section can be cancelled, removed from the public records, or in any manner affected by any sale in a succession, liquidation, insolvency, receivership, bankruptcy, or partition proceedings, unless prior to the application or petition for the sale, at least ten days written notice of the sale is given by certified or registered mail to the association in whose favor the mortgage was executed. Waiver of this notice by the association shall be in writing and shall be filed in the court authorizing or ordering the sale. In the event the sale is made, the mortgage in favor of the association shall not be made secondary to and shall not be primed by any costs, fees, or charges of any kind in such proceeding, except the costs of advertising and selling the property.

Acts 1970, No. 234, §1. Amended by Acts 1977, No. 689, §1; Acts 1981, No. 292, §1; Acts 1981, No. 328, §1; Acts 1983, No. 675, §1; Acts 1985, No. 349, §1, eff. Jan. 1, 1986; Acts 1986, No. 161, §1; Acts 1995, No. 1087, §5.