Louisiana civil law states that mortgages must be inscribed, or recorded, with the town clerk's office. After a period of 10 years has elapsed, the lender must reinscribe the mortgage for another 10-year period, assuming the mortgage has a term longer than 10 years. The purpose of reinscribing a mortgage guarantees the lender priority rights to proceeds upon sale of the home.
Mortgage Reinscription in Louisiana
Mortgage reinscription in Louisiana has its roots in French law and is considered antiquated by many in the legal profession. Louisiana lenders must file a simple notice of reinscription to preserve their priority order with the court clerk in all parishes other than Orleans or the recorder of mortgages in New Orleans. Failure to reinscribe a Louisiana mortgage will result in the lender losing its priority status and may result in a debt obligation not being made whole if the home loan is foreclosed.
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Notices of Reinscription
The Louisiana Civil Code provides that the written notice of reinscription must provide correct and appropriate details to be valid and effective. The name of the mortgagor and mortgagee, the number of the original mortgage record and an official statement noting that the letter is reinscribing the mortgage must always be included. Once a mortgage is reinscribed it can stay in place for another 10-year period, after which it must be reinscribed yet again.
Cancellation of a Mortgage
After a mortgage has been paid in full a notice of cancellation will be issued by the lender. It's also always the homeowner's responsibility to ensure the note has been recorded as "paid in full" or "canceled" with the town clerk or recorder of mortgages. Time limits apply and the mortgage lender must provide an act of cancellation within 30 days of the note's satisfaction date. Special procedures apply when the original mortgage note can't be located or there are multiple notes of indebtedness. Homeowners should check with a Louisiana attorney or the proper authority for mortgage cancellation rules. After the mortgage debt has been cancelled the lender no longer needs to file for reinscription.
Assignment of Mortgages
When a homeowner refinances, the note that secures the property is transferred from the original lender to the new lender. No further action is necessary by the new lender to ensure the note's transfer but it still must follow Louisiana's law of reinscription. In order for a new mortgage assignment to be valid, it must be documented, signed, witnessed and notarized. Correctly following the mortgage assignment process ensures the lender's right to foreclose in the event the homeowner defaults.