Under Louisiana law, what is the primary security instrument used to secure a real estate loan on immovable property?
Correct Answer
B) Mortgage executed before a notary public
Louisiana uses a mortgage — not a deed of trust — as the primary security instrument for real estate loans. Under La. Civil Code Art. 3278, a mortgage is a nonpossessory right created over property to secure the performance of an obligation. It must be executed before a notary public and two witnesses (authentic act) or by private signature duly acknowledged to be recordable. Louisiana's judicial foreclosure process flows from this mortgage structure.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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