Louisiana Notary

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Mortgage

Mortgage – Miscellaneous provisions

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Mortgage – Miscellaneous provisions

§5384. Assumption of a mortgage on immovable property by a third person An original vendor’s privilege or first mortgage, or both, is not extinguished nor is its ranking subordinated to any other mortgage, lien, privilege, or encumbrance when the obligation it secures is assumed by a new obligor, notwithstanding the release of the original obligor.

§5389. Additional funds advanced under mortgage or security agreement.

A. A mortgage or security interest shall secure additional funds that may be advanced by the mortgagee or secured party for the protection, preservation, repair, or recovery of the mortgaged or encumbered property, or the protection and preservation of the mortgagee’s mortgage or secured party’s security interest there under. A mortgage or security agreement may provide that the mortgagee or secured party may, at its sole election, purchase insurance or pay taxes on the mortgaged or encumbered property should the mortgagor or debtor fail to comply with its contractual obligations to do so.

B. Unless the mortgage or security agreement provides otherwise, all additional sums advanced by the mortgagee or secured party under the provisions of Subsection A are deemed to bear interest at the rate provided under the mortgage note or other secured indebtedness from the date of each such advance until repaid in full by the mortgagor or debtor.

§5393. Combination forms.

A. A mortgage note and mortgage or a promissory note and security agreement under Chapter 9 of the Louisiana Commercial Laws (R.S. 10:9-101, et seq.) may be combined under a single form, with the maker/mortgagor or debtor signing in one location on the face of the form, agreeing to the note and mortgage or security agreement covenants on the face and reverse sides thereof.

B. When one form combines the mortgage and mortgage note under the provisions of Subsection A, it is not necessary to paraph the mortgage note “Ne Varietur” for identification with the mortgage.

C. The combining of the mortgage note and mortgage or the note and security agreement under one form, with only one combined signature by the maker/ mortgagor/debtor, has no effect on the validity or enforceability of the note or the mortgage or security agreement, or on the mortgagee’s or secured party’s rights to foreclose under the mortgage or security agreement by means of executory process.

Mortgage – Recordation of collateral mortgages

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Mortgage – Recordation of collateral mortgages

§5554. No requirement of registry of transfer, assignment, pledge, or security interest in or of the written obligation, collateral mortgage, or vendor’s privilege. There is no requirement that there be registry of

(1) Any evidence of pledge of the written obligation secured by a collateral mortgage or a vendor’s privilege.

(2) Any transfer or assignment of the written obligation secured by a collateral mortgage or a vendor’s privilege, or of the collateral mortgage or vendor’s privilege.

(3) Any security interest in a collateral mortgage or vendor’s privilege or written obligation secured by either.

Mortgage – Effective date

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Mortgage – Effective date

§5551. Effective date of a collateral mortgage. A. A collateral mortgage becomes effective as to third parties, subject to the requirements of registry of the collateral mortgage, when a security interest is perfected in the obligation secured by the collateral mortgage in accordance with the provisions of Chapter 9 of the Louisiana Commercial Laws, R.S. 10:9-101, et seq.

B. A collateral mortgage takes its rank and priority from the time it becomes effective as to third parties. Once it becomes effective, as long as the effects of recordation continues in accordance with Articles 3328 through 3334 of the Civil Code, a collateral mortgage remains effective as to third parties (notwithstanding any intermediate period when the security interest in the secured obligation becomes unperfected) as long as the secured party or his agent or his successor retains possession of the collateral mortgage note or other written obligation, or the obligation secured by the mortgage otherwise remains enforceable according to its terms, by the secured party or his successor.

C. As long as the effects of registry of the collateral mortgage continue, in accordance with Articles 3328 through 3334 of the Civil Code, if there is a termination, remission, or release of possession of the written obligation, a collateral mortgage takes its rank and priority from the time a new security interest is perfected in the written obligation, regardless of whether the secured party is the original secured party, his successor, or a new or different secured party.

Mortgage – Collateral mortgage defined

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Mortgage – Collateral mortgage defined

R.S. 9:5550. Definitions. (1) “Collateral mortgage” shall mean a mortgage that is given to secure a written obligation, such as a collateral mortgage note, negotiable or nonnegotiable instrument, or other written evidence of debt, that is issued, pledged, or otherwise used as security for another obligation. A collateral mortgage or collateral chattel mortgage may provide on its face that the mortgage is granted in favor of a designated mortgagee and any future holder or holders of the collateral mortgage note.

Mortgage – “In rem” mortgage

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Mortgage – “In rem” mortgage

Art. 3297. Restrictions upon recourse of mortgagee. The mortgagee’s recourse for the satisfaction of an obligation secured by a mortgage may be limited in whole or in part to the property over which the mortgage is established.

RS. 9:5391. Additions, accessions, and natural increases subject to mortgage. A mortgage of immovable property without further action attaches to present and future component parts thereof and accessions thereto, without further description and without the necessity of subsequently amending the mortgage agreement.

Mortgage – Securing future obligations

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Mortgage – Securing future obligations

Art. 3298. Mortgage may secure future obligations. A. A mortgage may secure obligations that may arise in the future.

B. As to all obligations, present and future, secured by the mortgage, notwithstanding the nature of such obligations or the date they arise, the mortgage has effect between the parties from the time the mortgage is established and as to third persons from the time the contract of mortgage is filed for registry.

C. A promissory note or other evidence of indebtedness secured by a mortgage need not be paraphed for identification with the mortgage and need not recite that it is secured by the mortgage.

D. The mortgage may be terminated by the mortgagor or his successor upon reasonable notice to the mortgagee when an obligation does not exist and neither the mortgagor nor the mortgagee is bound to the other or to a third person to permit an obligation secured by the mortgage to be incurred. Parties may contract with reference to what constitutes reasonable notice.

E. The mortgage continues until it is terminated by the mortgagor or his successor in the manner provided in Paragraph D of this Article, or until the mortgage is extinguished in some other lawful manner. The effect of recordation of the mortgage ceases in accordance with the provisions of Articles 3357 and 3358.

Revision Comments-1991. (a) As the Expose des Motifs more fully explains, this article, and certain supplemental legislation adopted with it (R.S. 9:5555-5557) is intended to provide a direct and convenient substitute for the so-called collateral mortgage, which in recent years has become widely used, and to permit a person to mortgage his property to secure a line of credit, or even to secure obligations that may not then be contemplated by him except in the broadest sense of expectation that he may some day incur an obligation to the mortgagee. The supplemental legislation also facilitates the granting of mortgages to secure obligations that are not evidenced by a note paraphed for identification with it. See R.S. 9:5555-5557 (1991).

(b) The expression in Paragraph A that “a mortgage may secure” is intended to emphasize that a mortgage securing future obligations is not a distinct and different form of mortgage. A mortgage may secure existing obligations; obligations contemporaneously incurred with the execution of the mortgage or specific identifiable or particular and limited future obligations; or general and indefinite future obligations; or any combination of them. The matter is one of contract, not law, and the provisions of this Title regulating mortgages are equally applicable in each case.

(c) Paragraph B declares that a mortgage securing future obligations has the same effect and priority it would have if the obligations were in existence when the con­tract of mortgage was entered into. Thus, it is effective between the parties from the date it is created by the contract of the parties (Art. 3287), and is established over future property when the property is acquired. (Art. 3292).

(d) The effect and rank of a mortgage securing future obligations thus essentially corresponds to the effect and rank that it would have if it secured a collateral note that was pledged to secure future obligations, with the exception that Article 3298 does not require that there initially be a debt or commitment in order to give vitality to the mortgage. Of course, the contract of mortgage must be in existence and, to affect third persons acquiring rights in and to the thing mortgaged, it must be recorded. Once recorded, however, it serves notice to the world that until released or cancelled, it encumbers the property it describes to secure the obligation it contemplates.

Mortgage – Securing another’s obligation

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Mortgage – Securing another’s obligation

Art. 3295. Mortgage securing another’s obligation. A person may establish a mortgage over his property to secure the obligations of another. In such a case, the mortgagor may assert against the mortgagee any defense to the obligation which the mortgage secures that the obligor could assert except lack of capacity or discharge in bankruptcy of the obligor.

Mortgage – Securing payment of money or performance of act

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Mortgage – Securing payment of money or performance of act

Art. 3293. Obligations for which mortgage may be established. A conventional mortgage may be established to secure performance of any lawful obligation, even one for the performance of an act. The obligation may have a term and be subject to a condition.

Art. 3294. Mortgage securing obligation that is not for the payment of money A mortgage that secures an obligation other than one for the payment of money secures the claim of the mortgagee for the damages he may suffer from a breach of the obligation, up to the amount stated in the mortgage.

Mortgage – Presumption of things subject to mortgage

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Mortgage – Presumption of things subject to mortgage

Art. 3291. Presumption that things are subject to conventional mortgage A conventional mortgage of a corporeal immovable, servitude of right of use, or lease, as the case may be, includes the things made susceptible of mortgage with them by Article 3286, unless the parties expressly agree to the contrary.

Art. 3292. Mortgage of future property permitted in certain cases. A special mortgage given over property the mortgagor does not own is established when the property is acquired by the mortgagor. A general conventional mortgage is permitted only when expressly provided by law.