Under Louisiana law, all of the following statements about the mortgage as a security instrument are true EXCEPT:
Correct Answer
C) Louisiana uses a deed of trust rather than a mortgage to secure real estate loans
Option C is the false statement. Louisiana does NOT use a deed of trust. Louisiana's Civil Code framework relies on the mortgage as the exclusive security instrument for immovable property loans. Deeds of trust are used in common-law states such as California and Texas but have no place in Louisiana's civilian legal system. This is one of the most commonly tested distinctions on the Louisiana state exam.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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