APPENDIX I

CURING HOME MORTGAGE DEFAULT,
ORGANIZED BY CIRCUIT

A.  First Circuit

TD Bank, N.A. v. LaPointe (In re LaPointe), 505 B.R. 589, 595-97 (B.A.P. 1st Cir. Feb. 24, 2014) (Feeney, Tester, Finkle) (Adopting gavel rule, foreclosure sale was completed before petition when auction concluded and memorandum of sale was signed by buyer notwithstanding that recording of deed occurred later; § 1322(c)(1) is not ambiguous and creates a uniform federal rule. "Since the enactment of § 1322(c)(1), courts have disagreed over the meaning of the phrase 'sold at a foreclosure sale that is conducted in accordance with applicable nonbankruptcy law[]' . . . . One line of cases follows the 'gavel rule,' holding that the debtor's right to cure is cut off once the gavel falls at the foreclosure auction. These courts generally agree that § 1322(c)(1) is clear and unambiguous . . . . [A] second approach consider[s] the statutory language to be ambiguous . . . . Courts following this approach . . . hold that the statutory language is intended to cut off the debtor's right to cure only when the entire sale transaction is complete under state law. . . . We conclude that the language of § 1322(c)(1) is clear, unambiguous and needs no interpretation. 'The phrase "sold at a foreclosure sale" refers to a sale that occurs at a foreclosure auction.' . . . The additional phrase 'conducted in accordance with applicable nonbankruptcy law' is a requirement that the foreclosure was noticed, convened and held in compliance with applicable state laws. . . . [U]nder New Hampshire law, the foreclosure process is complete as to the mortgagor at the time the gavel falls at the foreclosure auction. . . . [T]he mortgagor's equity of redemption ends when the gavel falls. . . . [B]ecause the foreclosure auction took place prior to the petition date, the Debtor no longer had any right of redemption and no legal or equitable interest in the property under New Hampshire law. . . . [H]e had no ability to cure his defaults under § 1322(c)(1).").

RNPM, LLC v. Alvarez (In re Alvarez), 473 B.R. 853, 860-61 (B.A.P. 1st Cir. June 28, 2012) (Boroff, Deasy, Bailey) (Applying § 1322(e) and Puerto Rico law, 10% "penalty clause" in mortgage was subject to equitable reduction from $7,600 to $2,000. "[Section] 1322(e) controls the determination of the amount of pre-petition attorney's fees which may be included in a secured creditor's mortgage arrearage claim. . . . [Section] 1322(e) permits recovery of attorney's fees and expenses only if allowed by applicable nonbankruptcy law. . . . [P]enal clauses in Puerto Rico are 'subject to the principle of moderation' under Puerto Rico law."), aff'g 458 B.R. 645 (Bankr. D.P.R. Sept. 9, 2011) (Lamoutte) (Section 1322(e) controls determination of prepetition mortgage arrears, including attorney fees—not Bankruptcy Rule 2016 or § 506(b) reasonableness standard.).

RNPM, LLC v. Alvarez (In re Alvarez), 473 B.R. 853, 860-63 (B.A.P. 1st Cir. June 28, 2012) (Boroff, Deasy, Bailey) (Applying § 1322(e) and Puerto Rico law, 10% "penalty clause" in mortgage to cover costs, expenses and attorney fees was subject to equitable reduction from $7,600 to $2,000. "[Section] 1322(e) controls the determination of the amount of pre-petition attorney's fees which may be included in a secured creditor's mortgage arrearage claim. . . . [Section] 1322(e) permits recovery of attorney's fees and expenses only if allowed by applicable nonbankruptcy law. . . . [P]enal clauses in Puerto Rico are 'subject to the principle of moderation' under Puerto Rico law. . . . [T]he $7,600.00 penalty imposed under the Mortgage exceeded the $6,400.00 Mortgage arrearage. . . . [This was a] lack of proportion between the penalty and the default of the sort frowned upon by Puerto Rico courts."), aff'g 458 B.R. 645 (Bankr. D.P.R. Sept. 9, 2011) (Lamoutte) (When plan cures prepetition arrearages and maintains mortgage payments, attorney fees, costs and late fees as part of cure are determined under § 1322(e), rather than under Bankruptcy Rule 2016 or § 506(b).).

Rodriguez v. Inmobiliaria Naihomy (In re Rodriguez), 334 B.R. 754 (B.A.P. 1st Cir. Dec. 1, 2005) (Votolato, Deasy, Rosenthal) (Under literal interpretation of Puerto Rico Rule of Civil Procedure, real estate foreclosure conducted under ordinary statutory sale, as opposed to summary statutory sale, does not pass title until execution and delivery of public deed by marshal. Since debtor filed Chapter 13 before title had passed to buyer, debtor's interest in property became property of estate.).

Anglin v. Regions Mortgage, Inc. (In re Anglin), No. MW 00-055, 2001 WL 36381918 (B.A.P. 1st Cir. Mar. 26, 2001) (Haines, Vaughn, Carlo) (Citing Mendoza v. Temple-Inland Mortgage Corp. (In re Mendoza), 111 F.3d 1264 (5th Cir. May 12, 1997) (Smith, Parker, Justice), and Green Tree Acceptance, Inc. v. Hoggle (In re Hoggle), 12 F.3d 1008 (11th Cir. Jan. 11, 1994) (Anderson, Dubina, Godbold), assuming debtor can cure postpetition and postconfirmation defaults through plan, bankruptcy court did not abuse discretion by refusing modification and granting stay relief when debtor missed 19 consecutive postpetition and postconfirmation direct payments to mortgage holder.).

Howe v. Fleet Mortgage Corp. (In re Howe), No. NH 98-046, 1999 WL 35128684, at *3 (B.A.P. 1st Cir. Mar. 26, 1999) (Lamoutte, de Jesus, Haines) (Applying § 1322(e), no provision of loan agreement permits mortgage holder to impose interest on the interest component of its arrearage claim. "Interest accruing upon accumulated prepetition interest was not part of the bargain.").

Maine

In re McDonald, 397 B.R. 175 (Bankr. D. Me. Aug. 17, 2007) (Kornreich) (Although § 1322(e) overruled Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), with respect to payment of interest on mortgage arrearages, § 1322(e) did not upset holding in Rake that curing default under § 1322(b)(5) is modification of a secured claim for purposes of § 1325(a)(5). Accordingly, equal monthly payment requirement imposed by BAPCPA in § 1325(a)(5)(B)(iii)(I) applies to curing default under § 1322(b)(5).).

In re McKinney, 344 B.R. 1, 4-6 (Bankr. D. Me. June 14, 2006) (Haines) (Under Maine law, § 1322(c)(1) actually extends a Chapter 13 debtor's right to cure default beyond rights under state law because foreclosure sale under Maine law occurs after expiration of redemption period; foreclosure sale is complete under Maine law when auction occurs without regard to whether a deed has been delivered. "[I]n Maine, . . . a mortgagor's state law rights in real estate expire at the conclusion of a pre-sale redemption period . . . section 1322(c)(1)'s operation extends the mortgagor's property rights as a matter of federal law. . . . The phrase 'sold at a foreclosure sale' refers to a sale that occurs at a foreclosure auction. The additional phrase 'conducted in accordance with applicable nonbankruptcy law' requires that state law be consulted to assure the sale was noticed, convened, and held (i.e., 'conducted') in compliance with state law. . . . [Section] 1322(c)(1) provides Maine debtors with substantive rights that do not exist in state law, rights that endure beyond expiration of the pre-sale redemption period, when the mortgagor's rights in the real estate would otherwise have been cut off. Under Maine law, insofar as rights in the real estate are concerned, the mortgagor is entirely out of the picture well before the foreclosure sale convenes.").

Massachusetts

In re Everett, No. 10-19457-FJB, 2013 WL 3757283 (Bankr. D. Mass. July 15, 2013) (Bailey) (Under mortgage contract, attorney fees and costs, inspection fees, late fees and appraisal fees could be assessed against the debtor.).

Lacey v. BAC Home Loans Servicing, LP (In re Lacey), No. 10-1249, 2011 WL 705479 (Bankr. D. Mass. Feb. 17, 2011) (Feeney) (Prepetition foreclosure sale was final, equity of redemption had been extinguished and property did not become part of Chapter 13 estate. Debtor did not show that foreclosure sale was wrongful under Massachusetts law.).

In re Mounelaphom, 438 B.R. 759 (Bankr. D. Mass. Oct. 29, 2010) (Hoffman) (Section 1322(c)(1) applies only to principal residence and not to nonresidential property; court need not reach issue whether debtors retained right to cure default when plan did not propose maintenance of postpetition payments and was not confirmable.).

In re Shepherd, No. 09-19185-JNF, 2010 WL 2390026 (Bankr. D. Mass. June 10, 2010) (unpublished) (Feeney) (Arrearage claim of mortgage servicer was allowed in part and adjusted: $76 charge for recording order of notice of foreclosure was duplicate; $300 fee for auctioneer was reasonable but disallowed because of lack of information to determine what work was actually performed; $250 for attorney fees for continuing foreclosure was allowed, along with reduced certified mail and other miscellaneous charges.).

In re Aho, No. 09-41949-JBR, 2009 WL 3820327 (Bankr. D. Mass. Nov. 16, 2009) (unpublished) (Rosenthal) (On debtor's objection to mortgage claim: $550 auctioneer fee was disallowed for lack of evidence that auctioneer did work; recording fee for assignment was disallowed because solely for benefit of mortgagee; half of title examination fee was disallowed as duplicative and unreasonable; $440 fee for unspecified professional services was disallowed; cost of state court action to determine whether debtor was service member was allowed since action was required by Massachusetts law.).

Regan v. Beneficial Mass., Inc. (In re Regan), No. 07-1308, 2009 WL 1067197 (Bankr. D. Mass. Apr. 21, 2009) (Feeney) (Section 1322(e) allows undersecured mortgage creditor to recover interest, reasonable attorney fees, costs and other charges when plan proposes to cure default.).

In re Melillo, 385 B.R. 476 (Bankr. D. Mass. Apr. 8, 2008) (Hillman) (Although § 1322(e) supercedes § 1325(a)(5) with respect to the amount necessary to cure default, § 1325(a)(5)(B)(iii)(I) still applies and prohibits plan that would cure default through a combination of periodic payments and a balloon payment.).

In re Kaplan, No. 06-41771-JBR, 2006 WL 3757711 (Bankr. D. Mass. Dec. 19, 2006) (unpublished) (Rosenthal) (Foreclosure sale occurred at 2:10 p.m. when memorandum of sale was signed, 27 minutes before Chapter 13 petition; mortgagee entitled to relief from stay to evict debtor.).

In re Mellino, 333 B.R. 578 (Bankr. D. Mass. Nov. 9, 2005) (Feeney) (Debtor failed to prove that prepetition foreclosure was not conducted in accordance with Massachusetts law; right of redemption and interest in property terminated when sale was completed.).

In re Gillis, 333 B.R. 1 (Bankr. D. Mass. Oct. 14, 2005) (Somma) (Balloon payment during 36-month plan cures mortgage arrearage within reasonable time. Substantial equity provides adequate protection and prevents shifting of risk of loss to mortgagee. Debtor has sufficient income and market value in home to qualify for refinancing within 36-month plan. Increasing market values in area support that debtor would be able to sell home to satisfy mortgage in full if necessary.).

In re Crichlow, 334 B.R. 321 (Bankr. D. Mass. May 13, 2005) (Hillman) (After holding that debtor's right of redemption and cure had terminated prepetition with execution of memorandum of sale, see In re Crichlow, 322 B.R. 229 (Bankr. D. Mass. 2005), motion for stay pending appeal is denied, with finding of no likelihood of success on appeal, in light of Massachusetts law supporting termination of equity of redemption.).

In re DePaolo, Nos. 04-18008-WCH, 03-20143-WCH, 2005 WL 524492, at *3-*4 (Bankr. D. Mass. Mar. 3, 2005) (unpublished) (withdrawn Mar. 7, 2005 as entered in error) (Plans that would complete the curing of default on home mortgages by refinancing or sale in the 36th and 60th months fail to cure default within a reasonable time as required by § 1322(b)(5). Both debtors had equity in real property. DePaolo's plan would make 35 monthly payments of $321 and a balloon payment of $46,179.07 in the 36th month. Ceruti's plan would make 59 payments of $600 and a balloon payment of $111,060 in the 60th month. "What constitutes a 'reasonable time' to cure arrears under § 1322(b)(5) is a flexible concept to be determined upon the facts presented by each case. . . . ['A] reasonable time as used in § 1322(b)(5) is simply the most expeditious time, consistent with true rehabilitation, within which the debtor can cure defaults.' . . . There is no clear indication from the plans or from either DePaolo's or Ceruti's briefs why 36 and 60 months, respectively, are needed to cure the arrears. . . . [T]hat the cure of the MERS arrears in both cases are [sic] dependent upon a refinance or sale . . . in the final month of the plans, betrays that 36 and 60 months are indeed unreasonable times in which to cure arrears. Both DePaolo and Ceruti's property have significant equity at the present and to refinance or sell in the nearer future while said equity is guaranteed would be the most consistent with true rehabilitation. For DePaolo and Ceruti to speculate as to increased equity in their homes over the terms of their plans whether through payments on their mortgages or increases in property value is effectively a gamble with MERS collateral and claims.").

In re Crichlow, 322 B.R. 229, 234-35 (Bankr. D. Mass. Feb. 16, 2004) (Hillman) (Because memorandum of sale was executed before petition indicating that prevailing bidder at a properly conducted foreclosure sale had paid the requisite deposit, no property interest remained in debtor under Massachusetts law and debtor could not cure default or maintain payments because of § 1322(c)(1). "The phrase in the statute that refers to 'conducted in accordance with applicable nonbankruptcy law' is a requirement that the foreclosure was held in compliance with applicable state laws. . . . The phrase 'sold at a foreclosure sale' refers to the sale that occurs at a foreclosure auction not pursuant to or after. . . . The statute makes two references to state law, how the sale was conducted and the point at which the property was sold at the auction. That I must turn to state law to determine whether those two requirements of the statute are met does not render the statute ambiguous or require an in-depth analysis of when a title transfers under Massachusetts foreclosure law. . . . The Debtor did not offer any credible evidence that the foreclosure sale was conducted other than in accordance with the Massachusetts foreclosure laws. . . . [B]ecause the Memorandum of Sale was signed at the sale, the Property was sold at the foreclosure sale. . . . [T]he Debtor is not entitled to cure her mortgage default. . . . [W]ere I to adopt the Debtor's argument that 11 U.S.C. § 1322(c)(1) must be analyzed based upon how Massachusetts defines the term 'sold at a foreclosure sale,' I would conclude that the Property was sold when the auctioneer and [the prevailing bidder] signed the Memorandum of Sale.").

New Hampshire

Carbonneau v. Federal Nat'l Mortg. Ass'n (In re Carbonneau), 499 B.R. 166, 173-74 (Bankr. D.N.H. Sept. 17, 2013) (Deasy) (Under New Hampshire law, foreclosure sale was complete prepetition notwithstanding error in affidavit recorded with deed. "[E]rror is not misleading enough to defeat the conveyance . . . . Thus, under New Hampshire Law, the foreclosure sale process was completed before the Debtor filed his bankruptcy petition . . . .").

In re Plourde, 402 B.R. 488 (Bankr. D.N.H. Mar. 9, 2009) (Vaughn) (When mortgage is not secured by principal residence and can be modified, proper interest rate is determined under § 1325(a)(5)(B)(ii)—formula approach of prime rate plus 3% risk premium. "A three percent premium is warranted for the following: liquidity of the market, the creditor's inherent risk in extending credit to a Chapter 13 debtor, the high pre-petition arrearage of $30,310.57, and the likelihood of depreciation in value since both appraisals noted a decline in the market area of homes.").

In re Gagne, 378 B.R. 439, 443, 445 (Bankr. D.N.H. Nov. 21, 2007) (Deasy) (Section 1322(e) is unambiguous: New Hampshire law and contract determine amounts necessary to cure defaults. "Based upon the history of Countrywide's actions to enforce its rights under the Refinanced Mortgage, the total amount of the fees and expenses claimed are [sic] not unreasonable." Under § 1322(e), court is not "to be concerned with the status of Countrywide's claim as undersecured or oversecured under § 506(b).").

In re Gagne, 378 B.R. 439, 444 (Bankr. D.N.H. Nov. 21, 2007) (Deasy) (Applying § 1322(e) and New Hampshire law, it is not "patently unreasonable for a lender to generate legal fees and costs that exceed the amount of the arrearage while attempting to collect the arrearage." Fees of $13,191.86 are reasonable to collect $9,420.55 in past-due payments.).

Puerto Rico

In re Torres, No. 09-09187(ESL), 2012 WL 78206 (Bankr. D.P.R. Jan. 10, 2012) (Lamoutte) (Section 1322(e) requires determination of prepetition fees and expenses in accordance with underlying contract and applicable state law, but postpetition fees and expenses incurred by mortgage lender are governed by general reasonableness standard of § 506(b) and Rule 2016. Creditor must file application for postpetition fees and expenses, giving debtor and trustee opportunity to oppose.).

In re Torres, No. 09-09187(ESL), 2012 WL 78206 (Bankr. D.P.R. Jan. 10, 2012) (Lamoutte) (Creditor must file application for postpetition fees and expenses under § 506(b) and Bankruptcy Rule 2016, giving debtor and trustee opportunity to oppose. Section 1322(e) requires that prepetition fees and expenses be determined in accordance with underlying contract and applicable state law, but postpetition fees and expenses incurred by mortgage lender are governed by general reasonableness standard of § 506(b) and Bankruptcy Rule 2016.).

Rhode Island

In re Medaglia, 402 B.R. 530, 532 (Bankr. D.R.I. Apr. 1, 2009) (Votolato) (Absent controlling First Circuit authority, power to cure mortgage default terminates under § 1322(c)(1) at time of foreclosure sale under "gavel rule.").

B.  Second Circuit

Connecticut

In re Espanol, 509 B.R. 422 (Bankr. D. Conn. Apr. 22, 2014) (Dabrowski) (Nonmonetary default under "due-on-sale clause" in residential mortgage cannot be cured without impermissibly modifying creditor's rights under § 1322(b)(2). Failure to assert default under due-on-sale clause did not waive creditor's right to enforce provision under terms of mortgage. Modification may not be achieved through back door by objection to claim.).

In re Bagley, No. 07-21510 (ASD), 2008 WL 4297041 (Bankr. D. Conn. Sept. 16, 2008) (unpublished) (Dabrowski) (Citing In re Walters, 223 B.R. 710, 713 (Bankr. W.D. Mo. 1998), amended plan cannot alter requirement to cure postpetition defaults; amended plan cannot retroactively recalculate preconfirmation delinquency.).

In re Carpenter, 331 B.R. 529 (Bankr. D. Conn. Aug. 12, 2005) (Krechevsky) (Under § 1322(e), regulations governing loan from USDA are part of applicable nonbankruptcy law; when regulations no longer authorize subsidy of interest rate, plan may not retroactively reinstate subsidy that was not renewed upon debtor's default.).

In re Carpenter, 331 B.R. 529, 533, 534 (Bankr. D. Conn. Aug. 12, 2005) (Krechevsky) (Amount necessary to cure a prepetition mortgage default is determined under the strict terms of the agreements applicable to the debt as it exists prior to filing, not to what the obligation would be had the debtor not defaulted. The debtor's mortgage was held by the USDA and included an interest subsidy. The debtor defaulted, and the interest subsidy was terminated. When the debtor filed a Chapter 13 petition seeking to cure the default, she argued that the arrearage should be calculated as if the subsidy had been in place. The court disagreed. "It is well established that curing a default through a Chapter 13 plan in accordance with § 1322(b)(5) 'de-accelerates' the underlying debt. . . . The arrearage must be determined under the terms of the agreements and regulations applicable to the debt as it exists prior to its 'de-acceleration,' rather than by looking to what might have been had no default occurred. . . . Not until the default is cured are its consequences undone.").

New York

Eastern District of New York

Darnley v. Ameriquest Mortgage Co., No. 06-CV-4265 (DLI), 2010 WL 118143 (E.D.N.Y. Jan. 8, 2010) (unpublished) (Irizarry) (Prepetition sale terminated debtor's legal and equitable interests prior to filing. New York law establishes that valid judgment sale and mortgage foreclosure action entitle purchaser to receive deed upon compliance with terms of sale and mortgagor has no right to redeem property after sale. Transfer of deed postpetition did not violate stay.).

In re Sanders, 408 B.R. 25 (Bankr. E.D.N.Y. July 24, 2009) (Craig) (Res judicata effect of prior order and Rooker-Feldman doctrine prevent relitigation of prebankruptcy foreclosure judgment that cut off power to cure default.).

In re Adejobi, 404 B.R. 78, 82 (Bankr. E.D.N.Y. Apr. 29, 2009) (Feller) (Applying § 1322(e), New York law and agreement, cure amount included interest at contractual default rate. "A contractual default rate of interest is a deliberate bargain among private parties. There is nothing intrinsically unscrupulous or wrong with a contractual default rate of interest. It simply reflects a heightened risk of nonpayment and the unforeseeable cost involved in collecting defaulted debt.").

Northern District of New York

Cook v. Huey, 506 B.R. 174 (N.D.N.Y. Oct. 4, 2013) (Cangilos-Ruiz) (Valid prepetition foreclosure sale divested debtors of any legal or equitable interest in property.).

In re Winston, 416 B.R. 32 (Bankr. N.D.N.Y. May 7, 2009) (Littlefield) (At confirmation, mortgage creditor is bound to deem prepetition arrearages contractually cured when mortgage is bifurcated into prepetition arrearages to be paid in plan and ongoing mortgage obligations. Plan language must indicate that bifurcation is "legal fiction" that does not improperly modify mortgage obligation.).

In re Winston, 416 B.R. 32 (Bankr. N.D.N.Y. May 7, 2009) (Littlefield) (Mortgage creditor may properly include in its claim postpetition and preconfirmation fees of $150 for plan review and $150 for preparation of proof of claim.).

In re Sands, 328 B.R. 614 (Bankr. N.D.N.Y. May 26, 2005) (Gerling) (Foreclosure completed under New York law moments before electronic filing of Chapter 13 case terminated debtor's property interest; debtor did not establish that electronic filing was delayed by clerk's error.).

Southern District of New York

3939 WPR Funding LLC v. Campbell (In re Campbell), 539 B.R. 66 (S.D.N.Y. Sept. 28, 2015) (Ramos) (Default interest rate of 24% in residential mortgage was valid and enforceable under New York law and the Bankruptcy Code; however, default interest disallowed because mortgagee failed to make adequate demand by notice of acceleration.).

In re Campbell, 513 B.R. 846, 850-53 (Bankr. S.D.N.Y. July 29, 2014) (Gropper) (Applying § 1322(e), New York law, note and mortgage, cure amount did not include interest at default rate. "'[T]he amount necessary to cure a default is the same as would be required to cure if the debtor were not in bankruptcy.' . . . To qualify as a cure amount, the interest and charges proposed must be both (1) required under the original agreement, and (2) not prohibited by state law. . . . [I]f the parties' agreement provides for a default rate of interest, if such rate has become due and payable and if such rate is permitted by state law, the amount necessary to cure the Debtor's pre-petition arrears is the default rate. . . . [A]ction by the Mortgagee was required in order to accelerate the debt, and there was no automatic acceleration as a consequence of a payment default. . . . [While] the Mortgage also provided that '[u]pon the occurrence of any default hereunder, the Note and all other sums secured hereby shall bear interest at the Default Rate[,]'. . . the Second Circuit recently stated [that] this type of a general paragraph has been interpreted by the New York cases as '"not self-operative," intended to simply give the creditor "the right to treat the entire debt as matured."' . . . This construction of the Mortgage is particularly appropriate here where the paragraphs on default distinguish clearly between defaults that automatically accelerate the debt and defaults where the debt can be accelerated at the option of the Mortgagee. Since the record is insufficient to establish that [mortgagee] . . . accelerated the Mortgage, it does not appear that [mortgagee] is entitled to prepetition default interest."), aff'd, 539 B.R. 66 (S.D.N.Y. Sept. 28, 2015) (Ramos).).

In re Martin, 496 B.R. 323, 327-28 (Bankr. S.D.N.Y. Aug. 8, 2013) (Morris) (When redemption period had not expired prior to petition, plan could manage tax purchaser's claim under § 1322; postpetition transfer by deed after prepetition delinquent tax auction was stay violation. Distinguishing Canney v. Merchants Bank (In re Canney), 284 F.3d 362 (2d Cir. Mar. 7, 2002) (Parker, Cabranes, Sotomayor), and citing In re Romious, 487 B.R. 883 (Bankr. N.D. Ill. Jan. 18, 2013) (Baer), Taylor v. Vermont Housing Finance Agency (In re Taylor), 286 B.R. 275, 280 (D. Vt. Dec. 3, 2002) (Murtha), and In re Pellegrino, 284 B.R. 326, 332 (Bankr. D. Conn. Aug. 19, 2002) (Dabrowski), § 1322 "provides 'an independent right to cure under the Bankruptcy Code, apart from the debtor's right to redeem under state law which is itself extended by § 108(b).' . . . Debtors in a chapter 13 have rights under § 1322 that debtors in chapter 7 cases do not. One of these rights is the right to cure arrears under § 1322(c)(1), which is a federal right that is separate from the state-law right to redeem. . . . A debtor's right to redeem under state law is important only to establish what state-law property rights the debtor held at the time the bankruptcy petition is filed and § 1322(c)(1) relief is triggered. . . . Section 1322(c)(1) does not replace the state right of redemption and is only available as a 'targeted federal relief for homeowners' under chapter 13. . . . 'The reason debtors may use Chapter 13 to pay the tax debt over time . . . is that they are not exercising their right to redeem. Instead, they are using their Chapter 13 plan to pay a secured claim over time, as they are entitled to do because § 1322(b)(2) provides Chapter 13 debtors the right to modify claims.' . . . While § 108(b) sets a limit on the time that a debtor has to exercise its state law right to redemption, it does not negate those bankruptcy rights, which are specifically accorded to a debtor elsewhere in the Bankruptcy Code. . . . 'A tax purchaser has an in rem right against property owned by a debtor in a bankruptcy, which gives the tax purchaser a "claim" in the bankruptcy case.['] . . . Debtor had the right to redeem at the time of filing; thus [tax purchaser] has a claim in this bankruptcy case for whatever equitable interest remained in Debtor's possession upon filing the petition—a claim that Debtor is entitled to cure over the length of the chapter 13 plan, pursuant to § 1322.").

Western District of New York

Wisotzke v. Ontario County, 409 B.R. 20 (W.D.N.Y. June 23, 2009) (Larimer) (Applying New York law, default judgment in in rem tax foreclosure proceeding transferred property to county prior to Chapter 13 petition, and debtor's right to redeem property expired; postpetition recording of deed was ministerial act that did not affect validity of default judgment.), aff'g 392 B.R. 39 (Bankr. W.D.N.Y. 2008).).

In re Chaffee, 513 B.R. 215 (Bankr. W.D.N.Y. July 1, 2014) (Bucki) (Mortgage provision for "'simple daily interest' method of calculation" violated New York real property law when additional charges exceeded 2% of installment payment.).

Johnson v. Chautauqua (In re Johnson), 449 B.R. 7 (Bankr. W.D.N.Y. May 20, 2011) (Bucki) (Under New York law, prebankruptcy sale of residence occurred on entry of default tax foreclosure judgment; debtor had no ownership interest at petition and could not exempt real property from sale. With no exemption available, debtor could not avoid tax sale as fraudulent conveyance.).

Vermont

In re Weatherell, No. 10-10123, 2010 WL 3938225 (Bankr. D. Vt. Sept. 29, 2010) (unpublished) (Brown) (Prepetition default under mortgage modification agreement with loan servicer did not preclude curing default through Chapter 13 plan and reinstating modification agreement. Citing Di Pierro v. Taddeo (In re Taddeo), 685 F.2d 24 (2d Cir. July 20, 1982) (Lumbard, Friendly, Newman), right to cure prepetition default is well settled. Amount required to cure default under § 1322(b)(5) does not require payment of arrearage under original loan agreement but rather under agreement modified prebankruptcy when agreement did not specifically preclude cure. Section 1322(e) requires that agreement between parties, including loan modification agreement, determine amount required to cure default.).

In re Weatherell, No. 10-10123, 2010 WL 3938225 (Bankr. D. Vt. Sept. 29, 2010) (unpublished) (Brown) (When prepetition modification agreement with loan servicer reduced interest rate and monthly payments for specific time period but did not preclude curing default or reinstatement, debtors could cure prepetition defaults and restore modification agreement under § 1322(b)(3) and (b)(5). Section 1322(e) requires that agreement between parties, including modification agreement, determine amount required to cure default. Citing Di Pierro v. Taddeo (In re Taddeo), 685 F.2d 24 (2d Cir. July 20, 1982) (Lumbard, Friendly, Newman), right to cure prepetition default is well settled. Amount to cure default under § 1322(b)(5) does not require payment of arrearage under original loan agreement, but rather under agreement modified prebankruptcy, so long as agreement did not prevent cure. Agreement at issue did not expressly prohibit reinstatement or curing.).

In re Weatherell, No. 10-10123, 2010 WL 3938225 (Bankr. D. Vt. Sept. 29, 2010) (unpublished) (Brown) (When prepetition modification agreement with loan servicer reduced interest rate and monthly payments for specific time period, debtors could cure defaults and reinstate modification agreement under § 1322(b)(3) and (b)(5). Modification agreement had not terminated at case filing. Section 1322(e) requires that agreement between parties, including modification agreement, determine amount required to cure default. Citing Di Pierro v. Taddeo (In re Taddeo), 685 F.2d 24 (2d Cir. July 20, 1982) (Lumbard, Friendly, Newman), right to cure prepetition default is well settled. Amount to cure default under § 1322(b)(5) does not require payment of arrearage under original loan agreement, but rather under agreement modified prebankruptcy, so long as agreement did not prevent cure. Agreement at issue did not expressly prohibit reinstatement or curing.).

In re Willette, 395 B.R. 308, 323-24 (Bankr. D. Vt. Oct. 17, 2008) (Brown) (Chapter 13 petition three days before foreclosure sale will support curing default under § 1322(b)(5) when mortgagee ambiguously proceeded by strict foreclosure under Vermont law but also scheduled foreclosure sale. Postpetition relief from stay does not preclude confirmation of plan that cures default under § 1322(b)(5). "[B]ecause the Debtor had a contingent equitable interest in the Property when she filed her chapter 13 petition, and because the state court had set a foreclosure sale that had not yet occurred, the Debtor could benefit from the independent federal right, provided by § 1322, to nullify the mortgage acceleration, and to propose a plan to cure the pre-petition default . . . . [T]he Creditors argue . . . that since the Debtor never had any plan confirmed and the Court granted the Bank relief from stay to pursue its state court rights, the Debtor had lost her opportunity to reinstate the mortgage pursuant to § 1322 . . . . This logic is flawed. Section 1322 concerns contents of a plan . . . . Since a plan is filed at or near the beginning of a case, confirmation is not a pre-requisite to exercising the independent federal right contained in § 1322. The only pre-requisite is that a debtor file a chapter 13 case before the foreclosure sale.").

C.  Third Circuit

In re Makris, No. 11-1666, 2012 WL 1864323 (3d Cir. May 23, 2012) (unpublished) (Vanaskie, Barry, Cudahy) (Provision for fees "enforcing this note" did not entitle oversecured lender to recover attorney fees for litigation with guarantor or for unsuccessful litigation with debtor with respect to whether fees for litigating with guarantor were recoverable from debtor.).

In re Connors, 497 F.3d 314, 320-21 (3d Cir. Aug. 3, 2007) (Barry, Fuentes, Jordan) (Adopting "gavel rule," plan cannot cure default under § 1322(c)(1) after foreclosure auction notwithstanding that petition was filed before delivery of foreclosure deed under New Jersey law. "[T]he term 'foreclosure sale' is broadly understood to mean the foreclosure auction. . . . The gavel rule does not, of course, cut off the debtor's state-law post-sale remedies. . . . Connors . . . had 60 days from the filing of his petition to object or redeem. When he failed to do so, [the buyer's] equitable title was no longer subject to defeasance. . . . [U]nder the unambiguous language of 11 U.S.C. § 1322(c)(1), a Chapter 13 debtor does not have the right to cure a default on a mortgage secured by the debtor's principal residence between the time the residence is sold at a foreclosure sale and the time the deed is delivered.").

In re Ryker, No. 06-1872, 2007 WL 2138590 (3d Cir. July 27, 2007) (unpublished) (Barry, Fuentes, Jordan) (Plan that cashes out oversecured claim with single payment does not "cure" defaults and did not trigger reference to state law under § 1322(e); rather, reasonableness of attorney fees payable to oversecured claim holder was determined by federal law.).

In re Delone, No. 06-1932, 2006 WL 3314520 (3d Cir. Nov. 15, 2006) (unpublished) (Rendell, Ambro, Roth) (not precedential) (Reasonable time to cure defaults in § 1322(b)(5) means within duration of Chapter 13 plan not to exceed five years; plan that lacked a provision for curing default and which otherwise failed to pay prepetition foreclosure judgment in full did not satisfy the requirements for confirmation.).

Henthorn v. GMAC Mortgage Corp. (In re Henthorn), No. 03-4156, 2005 WL 293646, at *2 (3d Cir. Feb. 9, 2005) (unpublished) (Scirica, McKee, Chertoff) (Debtors cannot challenge reasonableness of $845 of costs and attorney fees charged by GMAC Mortgage when confirmed plan provided that debtors would make payments to GMAC "outside of bankruptcy" and debtors sold property a year after confirmation to satisfy mortgage. "Section 506(b) does not apply here because the debtors excluded the GMAC mortgage obligation from their confirmed bankruptcy plan, and the challenged fees were paid to GMAC from the debtors' post-confirmation sale of the mortgaged property. . . . Having excluded their contractual relationship with GMAC from the plan . . . plaintiffs cannot later, post-confirmation, invoke § 506(b) and § 105(a) to superintend the 'reasonableness' of fees collected by GMAC from the proceeds of the sale of its collateral.").

New Jersey

In re Boyd, 401 B.R. 137 (D.N.J. Dec. 9, 2008) (Lyons) (Under Smiriglio v. Hudson United Bank (In re Smiriglio), 98 Fed. Appx. 914 (3d Cir. 2004), secured creditor was entitled to postpetition, preconfirmation attorney fees as part of arrears to be cured; § 1322(e) is unambiguous that agreement and nonbankruptcy law control whether attorney fees and expenses are included in cure amount.).

In re Boyd, 401 B.R. 137 (D.N.J. Dec. 9, 2008) (Lyons) (Under § 1322(e), agreement and nonbankruptcy law determine whether attorney fees and expenses of creditor are included in cure amount; note contained fee-shifting provision enforceable under New Jersey law.).

Rossiter v. Simon (In re Rossiter), 412 B.R. 677 (D.N.J. Nov. 4, 2008) (Simandle) (Debtor cannot cure default on property that had been finally foreclosed prepetition; under New Jersey law, tax sale was completed prepetition, citing In re Connors, 497 F.3d 314 (3d Cir. 2007) (adopting gavel rule).).

Connors v. Deutsche Bank Nat'l Trust Co., No. Civ.A.05-2236(DMC), 2006 WL 1722609 (D.N.J. June 20, 2006) (unpublished) (Cavanaugh) (Adopting "gavel rule" and rejecting "delivery of deed rule": foreclosure sale conducted before Chapter 13 petition cuts off cure power under § 1322(c)(1).).

Ryker v. Current, 338 B.R. 642 (D.N.J. Feb. 16, 2006) (Martini) (Section 1322(e) does not apply to plan that proposes to pay mortgage in full from sale of property.).

Chisholm v. Cendant Mortgage Corp., No. 04-6398(JBS), 2005 WL 1522232 (D.N.J. June 27, 2005) (unpublished) (Simandle) (Under § 1322(c)(1) and New Jersey law, cure opportunity terminates only after deed is delivered to successful bidder at sheriff's sale.).

In re Rusch, No. 09-44799, 2010 WL 5394789 (Bankr. D.N.J. Dec. 28, 2010) (Kaplan) (Rooker-Feldman doctrine precludes relitigation of challenges to state court foreclosure judgment; mortgage is beyond rescue through Chapter 13 case.).

In re Rusch, No. 08-22740(MBK), 2009 WL 1025466 (Bankr. D.N.J. Jan. 23, 2009) (unpublished) (Kaplan) (Applying Rooker-Feldman doctrine, debtor cannot relitigate validity of prepetition foreclosure that limits rights of debtor in Chapter 13 case.).

In re Jones, No. 06-16416 (DHS), 2008 WL 3833425, at *2, *4 (Bankr. D.N.J. Aug. 13, 2008) (unpublished) (Steckroth) (Mortgagee not entitled to reimbursement for sheriff's commission notwithstanding New Jersey law that allows sheriff one-half commission when sale is cancelled by settlement; reinstatement of a mortgage through bankruptcy is not a "settlement" for purposes of New Jersey statute. Sheriff is entitled to reasonable actual out-of-pocket expenses.).

In re Royal, No. 05-20565 (NLW), 2007 WL 87981, at *3 (Bankr. D.N.J. Jan. 9, 2007) (unpublished) (Winfield) ("[T]he documentation provided by the Debtor and further negotiations between counsel warranted a reduction" of filed proof of claim to the amount of creditor's attorney and foreclosure fees.).

In re Lipscomb, No. 05-18722/JHW, 2006 WL 4452988 (Bankr. D.N.J. May 17, 2006) (unpublished) (Wizmur) (Section 1322(e) limited mortgagee's foreclosure costs and fees related to prior bankruptcies to those amounts allowed by the mortgage document and state law. State statute sets the rate for attorney fees for curing defaults, and the mortgage document did not provide for bankruptcy-related fees; therefore, court reduced lender's attorney fee claim.).

In re Lipscomb, No. 05-18722/JHW, 2006 WL 4452988 (Bankr. D.N.J. May 17, 2006) (unpublished) (Wizmur) (Section 1322(e) limited mortgagee's foreclosure costs and fees related to prior bankruptcies to those amounts allowed by the mortgage document and state law. State statute sets the rate for attorney fees for curing defaults, and the mortgage document did not provide for bankruptcy-related fees; therefore, court reduced lender's attorney fee claim.).

In re Dominguez, No. 05-32129 (NLW), 2006 WL 4452976, at *3 (Bankr. D.N.J. Apr. 7, 2006) (unpublished) (Winfield) (Construing New Jersey law, court sustains debtor's objection to that part of mortgagee's claim for one half of sheriff's commission, when petition was filed before sheriff's sale, and there is no proof that sheriff earned or charged commission. "[I]t is inequitable to conclude that a one-half commission accrues to the Sheriff every time a Debtor files a Chapter 13 case and invokes the automatic stay to prevent the foreclosure sale from going forward.").

Pennsylvania

Eastern District of Pennsylvania

In re Wilson, 563 B.R. 519, 523–25 (E.D. Pa. Dec. 28, 2016) (Pratter) (City of Philadelphia lacks standing to challenge confirmation of plan that redeems property sold at a tax sale before the Chapter 13 petition. “[T]he City has not demonstrated anything more than a potential or speculative injury contingent upon events that have not happened and may never happen. . . . [T]he City’s property was not diminished by the Plan’s confirmation because the Plan provides for full payment of its secured claims . . . . [A]ny alleged injury based on a decline in tax revenue as a result of damage to the sheriff’s sale process is purely speculative. . . . [A]ny future harm to the City’s tax revenue due to non-payment by Mr. Wilson is contingent upon his failure to pay future real estate taxes. This alleged injury is based on mere speculation . . . . Any prospective injury is contingent upon the inference that a party that pays the full redemption amount within a nine-month period is more likely to stay current on municipal obligations than a party that pays the redemption amount over the life of a Chapter 13 plan. The Court is simply not convinced that the City has demonstrated an actionable, substantial risk of future injury.”).

City of Philadelphia v. Minor (In re Minor), No. 15-3562, 2016 WL 1256286, at *12-*13 (E.D. Pa. Mar. 30, 2016) (Rufe) (Purchaser at municipal tax sale does not take absolute title to property; therefore, purchaser holds a secured claim that can be modified through the Chapter 13 plan. "Good Bet did not receive absolute title at the tax sale and . . . Debtor still has an interest in the Property. . . . Because Good Bet acquired only an inchoate interest in the property subject to Debtor's right to redemption, [Good Bet] has an allowed secured claim that can be modified by the Plan. . . . Debtor . . . has an obligation to pay the redemption price, which is enforceable by the threat of absolute title vesting in Good Bet. This claim is therefore secured by Good Bet's interest in the property . . . . Debtor's Plan properly modified Good Bet's secured claim under 11 U.S.C. § 1322(b). Neither Rule 6008 nor § 108 require[s] Debtor to file a motion or petition to redeem instead of filing a Chapter 13 plan to pay a secured claim under § 1322(b) where appropriate.").

In re Whitfield, No. 16-10709 ELF, 2017 WL 5484769 (Bankr. E.D. Pa. Nov. 10, 2017) (Frank) (Presumptive accuracy of arrearage claim for force-placed insurance was overcome by erratic record keeping by mortgagee and failure of mortgagee to respond to discovery with proof of payments of insurance premiums. Mortgagee’s failure to give notices required by Pennsylvania Homeowner’s Emergency Mortgage Assistance Program violated condition precedent to contractual right to recover attorney fees as part of arrearage claim.).

In re Cohen-Harvin, 571 B.R. 672, 67581 (Bankr. E.D. Pa. Aug. 7, 2017) (Frank) (Stendardo v. Federal National Mortgage Ass’n (In re Stendardo), 991 F.2d 1089 (3d Cir. June 21, 1993) (Mansmann, Hutchinson, Garth), and Pennsylvania law of merger limit the fees, costs and charges incurred after a foreclosure judgment that are allowable under “reassessment” process. Chapter 13 plan proposed to pay a fully matured mortgage claim in full. Mortgage was reduced to a judgment in state court before the petition. Bank of America filed a proof of claim that included late charges, attorney fees and other costs accrued both before and after the judgment. Under Pennsylvania law, “[u]pon entry of a foreclosure judgment ‘the terms of a mortgage [and note] are merged into a foreclosure judgment and thereafter no longer provide the basis for determining the obligations of the parties.’ . . . Generally, the right to collect any pre-judgment amounts which could have been included in the judgment, and the right to collect any post-judgment charges provided for by the note and mortgage are extinguished. . . . Reassessment of damages is accomplished through the filing of a post-judgment motion in which the plaintiff requests that the court modify the foreclosure judgment to incorporate certain charges incurred and interest accruing post-judgment[] . . . assuming that the right to assess those charges against the borrower survived the entry of judgment pursuant to the contractual exception to the merger doctrine. . . . BOA’s claim is allowed to the extent that the claim is based upon BOA’s state court foreclosure judgment, plus interest at the contract rate and those post-judgment charges that would be reassessable under state law.”).

In re Gonzalez, 550 B.R. 711, 717-26 (Bankr. E.D. Pa. May 19, 2016) (Frank) (After prepetition tax sale, when Chapter 13 is filed before expiration of statutory redemption period under Pennsylvania law, plan can provide for purchaser as a secured creditor and can modify that claim for payment over life of plan under § 1322(b)(5). "[T]he 'bundle of rights' . . . the purchaser receives through the tax sale and sheriff's deed is limited during the redemption period. . . . [T]he property owner's equitable interest in the property includes a superior right of possession. . . . When the right of redemption is viewed as an estate asset, it resembles an unexpired, unexercised option to purchase real property. . . . I conclude that the relationship between the former record owner and tax sale purchaser [is] slightly closer to the mortgagor/mortgagee relationship than to the relationship between an optionor/optionee or even a purchaser/seller of real estate. . . . [I]n a bankruptcy filed during the redemption period . . . , the Redemption Amount is a bankruptcy 'claim' that is subject to modification and treatment in a chapter 13 plan under 11 U.S.C. §§ 1322(b)(2) and 1325(a)(5).").

In re Pittman, 549 B.R. 614, 623-29 (Bankr. E.D. Pa. May 6, 2016) (Chan) (After Pennsylvania tax sale, when owner files Chapter 13 during nine-month statutory redemption period, plan can treat purchaser as holder of secured claim that can be modified under § 1322(b)(2) for payment over life of plan. "The ownership interests of prior owners and purchasers under mortgage foreclosure sales are completely different than the ownership interests of prior owners and purchasers in tax sales . . . . [A]t the conclusion of a mortgage foreclosure sale, the prior owner has no right to redeem property and the purchaser 'obtains vested equitable ownership of the property.' . . . In contrast, . . . the prior owner in a tax sale retains the right to redeem such property until nine months after the deed is acknowledged. During this redemption period, the prior owner may continue in possession of the property and the purchaser merely holds defeasible title in the property until the redemption period expires. . . . [T]he prior owner must merely start the redemption process within nine (9) months of the acknowledgement of the deed . . . . [T]he Purchaser is bound by the filing of the Claim and the Amended Claim and holds an allowed secured claim. . . . [T]he Purchaser clearly had a right to payment of the redemption amount contingent upon whether the Debtor timely elected to redeem the Property. . . . Reading § 108(b) to preclude debtors from extending these redemption payment periods under Chapter 13 plans directly conflicts with § 1322(b)(2), which explicitly permits a debtor to modify a secured claim over time. . . . [T]he proper way to reconcile § 108(b) with § 1322(b)(2) is to require a debtor to elect to redeem by the deadline set forth in § 108(b), but to permit payment of the redemption amount over time as a secured claim pursuant to § 1322(b)(2).").

In re Terry, 521 B.R. 90 (Bankr. E.D. Pa. Oct. 17, 2014) (Coleman) (Rooker-Feldman doctrine does not preclude consent agreement resolving dispute between debtor and purchaser at prepetition tax sale; agreement allowed debtor to exercise right of redemption through plan and respected sheriff's sale of property.).

In re Terry, 505 B.R. 660 (Bankr. E.D. Pa. Feb. 24, 2014) (Coleman) (Purchaser at prepetition tax sale is holder of secured claim that may be modified pursuant to § 1322(b)(2). Debtor retained right of redemption by filing petition before redemption period expired, and redemption could be paid in full over 60-month plan, treating tax purchaser as secured creditor.).

In re Ruiz, 501 B.R. 76 (Bankr. E.D. Pa. Nov. 8, 2013) (Raslavich) (Arrearage claim does not include foreclosure fees and costs when foreclosure notice contained incorrect cure amount; inspection fees inconsistent with HUD regulations are not allowed, but late charges are allowed. Property inspections for reasons other than to confirm that property is occupied are inconsistent with HUD regulations. Loan agreement that allowed inspections "solely on the basis of default" is trumped by HUD regulations. Late fees provided for in loan documents are allowed consistent with § 1322(b)(5) and HUD regulation, which require defaulting borrower who desires to reinstate loan to pay all past-due amounts.).

In re Smith, 463 B.R. 756 (Bankr. E.D. Pa. Jan. 19, 2012) (Frank) (Under consent agreement, mortgage lender was entitled to post-judgment interest, preconfirmation interest, costs, and reasonable attorney fee. Citing Stendardo v. Federal National Mortgage Ass'n (In re Stendardo), 991 F.2d 1089 (3d Cir. June 21, 1993) (Mansmann, Hutchinson, Garth), after prepetition foreclosure judgment, debtor waived benefit of merger doctrine by agreeing to interest accrual and costs.).

In re Bradley, No. 07-14607bf, 2008 WL 4065810 (Bankr. E.D. Pa. Aug. 26, 2008) (unpublished) (Fox) (Under Pennsylvania law, foreclosure sale was final at fall of hammer at sheriff's sale six months before petition. Filing Chapter 13 does not invalidate prepetition foreclosure and attempt to cure mortgage delinquency violates § 1322(c)(1).).

Padilla v. GMAC Mortgage Corp. (In re Padilla), 389 B.R. 409 (Bankr. E.D. Pa. June 30, 2008) (Frank) (Section 1322(e) "trumps" § 506(b) for mortgage contracts after October, 1994, but it does not apply to this 1988 mortgage transaction.), related to In re Padilla, 365 B.R. 492 (Bankr. E.D. Pa. 2007).).

In re Patton, 388 B.R. 629 (Bankr. E.D. Pa. June 6, 2008) (Sigmund) (Objection to accrued late charges and escrow shortages is sustained when mortgagee failed to provide basis for numbers; objection to claim for attorney fees is overruled when mortgagee provided proof that it had been billed for fees and had paid customary and reasonable costs.).

In re Pitts, 354 B.R. 58 (Bankr. E.D. Pa. Nov. 8, 2006) (Frank) (Debtor's objection to claim of Wachovia Bank for taxes included in its arrearages is sustained; debtor obligated to pay real property taxes under mortgage, but Wachovia introduced no evidence to verify that it paid $2,286.52 for taxes.).

In re Lammy, 356 B.R. 168, 176 (Bankr. E.D. Pa. Oct. 11, 2006) (Sigmund) (Applying § 1322(e), prebankruptcy extension agreement, which modified original contract, determined amount of arrearage. Cure of that arrearage "return[ed] the parties to the status quo ante and permit[s] the Debtors to have the benefit of the [prebankruptcy] loan extension.").

Middle District of Pennsylvania

In re Placidi, No. 5:07-bk-51657 RNO, 2008 WL 474239 (Bankr. M.D. Pa. Feb. 21, 2008) (unpublished) (Opel) (Including postpetition mortgage arrearages in plan is permissible under § 1322(b)(5), citing Green Tree Acceptance, Inc. v. Hoggle (In re Hoggle), 12 F.3d 1008 (11th Cir. 1994). Allowing flexibility in plans fosters congressional intent to save homes.).

In re Louwerse, 389 B.R. 400, 403 (Bankr. M.D. Pa. Feb. 8, 2008) (Thomas) (Section 1322(e) requires interest on arrearage when "[a]ccruing interest is provided for by the specific terms of the promissory note." Although plan is confirmable, "failure to address accruing interest on the delayed payment of arrears will result in a failure to effect a total cure of the mortgage by the time the plan reaches its culmination. . . . This may have a consequential impact on the Bank's ability to declare a post bankruptcy default at such time as the automatic stay terminates.").

Western District of Pennsylvania

Iannini v. Deutsche Bank Nat'l Trust Co. (In re Iannini), No. 10-55, 2010 WL 2104244 (W.D. Pa. May 24, 2010) (unpublished) (Conti) (Foreclosure had been completed and deed recorded before bankruptcy case was commenced, cutting off power to cure; Rooker-Feldman doctrine precluded bankruptcy court jurisdiction over foreclosure action that had been determined by state court.).

In re Mesich, No. 09-24910-GLT, 2014 WL 979188 (Bankr. W.D. Pa. Mar. 13, 2014) (unpublished) (Taddonio) (Arrearage claim reduced by cost of force-placed insurance when debtor established property was insured at time lender insured property.).

Porovne v. Deutsche Bank Nat'l Trust Co. (In re Porovne), 436 B.R. 791 (Bankr. W.D. Pa. Sept. 27, 2010) (Agresti) (Rooker-Feldman doctrine precluded bankruptcy court from exercising jurisdiction over debtor's complaint to set aside prepetition sheriff's sale. Debtor had opportunity to contest validity of writ of execution in state court prior to delivery of sheriff's deed. If court had subject matter jurisdiction, prepetition sheriff's sale was valid under Pennsylvania law.).

Rogel v. Deutsche Bank Nat'l Trust Co. (In re Rogel), 425 B.R. 231 (Bankr. W.D. Pa. Mar. 9, 2010) (Deller) (Distinguishing Stendardo v. Federal National Mortgage Ass'n (In re Stendardo), 991 F.2d 1089 (3d Cir. Apr. 9, 1993) (Mansmann, Hutchinson, Garth), under § 1322(e) and mortgage contract, curing default included payment of escrow advances for taxes and insurance. Merger of mortgage into foreclosure judgment was not at issue when debtors proposed to cure default and reinstate original mortgage under § 1322(b)(5).).

Rogel v. Deutsche Bank Nat'l Trust Co. (In re Rogel), 425 B.R. 231 (Bankr. W.D. Pa. Mar. 9, 2010) (Deller) (Section 1322(e) and mortgage contract obligated debtors to cure mortgage default which included escrow advances for taxes and insurance.).

Woodsbey v. Easy Mortgage (In re Woodsbey), 375 B.R. 145 (Bankr. W.D. Pa. Sept. 12, 2007) (Bentz) (Prepetition foreclosure judgment did not terminate debtor's cure remedy when sheriff's sale did not occur prior to bankruptcy. Under Pennsylvania law, 41 Pa. Stat. § 404, residential owner has until one hour before sheriff's sale to cure default, and § 1322(b)(3) and (5) give debtor cure opportunity in plan until hammer falls at sheriff's sale.).

D.  Fourth Circuit

Anderson v. Hancock, 820 F.3d 670, 674-77 (4th Cir. Apr. 27, 2016) (Wilkinson, Niemeyer, Norton) (Distorting beyond recognition the power to cure default and maintain payments in § 362(b)(2), (b)(3) and (b)(5), when mortgagee declared default and invoked default interest rate before petition, default interest rate applies to both curing prepetition arrears and making ongoing postpetition payments. Mortgagee declared a prepetition default and invoked default interest rate provision that raised interest rate from 5% to 7%. Plan proposed to cure arrearage over 60 months using 5% rate and to reinstate original installment payments at 5% interest. "The language of § 1322(b)(3) and (5) does not undo [§ 1322(b)(2)] protection of residential mortgage lenders' fundamental rights. Congress would not inexplicably make (b)(2) inoperative by means of a capacious power to cure written only a few sentences later. . . . The meaning of 'cure' thus focuses on the ability of a debtor to decelerate and continue paying a loan, thereby avoiding foreclosure. . . . [T]urning away from the debtors' contractually agreed upon default rate of interest would effect an impermissible modification of the terms of their promissory note. . . . The interest rate of a mortgage loan is tied up with the 'payments' that a legitimate cure requires must be 'maintain[ed].' . . . Inability to impose a practically useful default rate of interest would have predictable negative effects upon the home mortgage lending market. . . . Inability to impose default rates of interest might also motivate fewer lenders to engage in mortgage lending[.]").

Maryland

Schweiger v. MidFirst Bank, No. JKB-17-3255, 2018 WL 1471680, at *3 (D. Md. Mar. 26, 2018) (Bredar) (When foreclosure sale occurred 38 minutes before Chapter 13 petition, Maryland law provides that no right of redemption remained in debtor for § 1322(c) purposes. “Because the right of redemption does not continue past the foreclosure sale, Schweiger’s attempt to create such from 11 U.S.C. § 1322 (c)(1) fails. . . . [T]he foreclosure sale in Schweiger’s case occurred before he filed his bankruptcy petition. . . . ‘A petition filed subsequent to the falling of the auctioneer’s gavel simply comes too late.’”).

North Carolina

Eastern District of North Carolina

Anderson v. Logan (In re Anderson), No. 5:14-CV-690-FL, 2015 WL 1543242, at *4-*6 (E.D.N.C. Apr. 6, 2015) (Flanagan), aff'd in part, rev'd in part and remanded by No. 15-1505, 2016 WL 1660178 (4th Cir. Apr. 27, 2016) (Wilkinson, Niemeyer, Norton) (Curing default and maintaining payments do not include undoing default interest rate triggered by prepetition default; plan can deaccelerate and preclude foreclosure, but debtor is stuck with default interest rate. Debtor defaulted prepetition. Mortgagee accelerated and imposed 7% default interest rate. Plan reinstated original maturity, cured default and proposed to continue installments at original 5% interest rate. "Curing and maintaining payments are distinct legal concepts, and thus the bankruptcy plan may not mix 'curing' apples with 'maintenance of payment' oranges. . . . [T]he promissory note evidences that defendants were entitled to either the default interest rate, or the power to accelerate. But, the note does not allow both to occur simultaneously. . . . Upon defendants' election to accelerate the maturity date of plaintiffs' loan, defendants lost their right to demand the default interest rate. . . . After the December 2013, effective date of the plan, defendants are entitled to monthly payments calculated at the default rate of interest of seven percent (7%) per annum, for the remaining life of the loan. . . . Accordingly, debtors' plan is MODIFIED as follows: debtors must make payments calculated at a rate of five percent (5%) per annum, for the period between September 16, 2013, and the December 2013, effective date of the plan. For the period after the plan's effective date, debtors must make payments each month reflective of the increased rate of interest at seven percent (7%) per annum over the life of the loan."), aff'g as modified No. 13-05843-8-SWH, 2014 WL 8579623, at *3-*4 (Bankr. E.D.N.C. Sept. 5, 2014) (Warren) (§ 1322(b)(5) empowers Chapter 13 debtors to deaccelerate mortgage but does not restore predefault interest rate; curing default is limited by § 1322(b)(2) and does not include undoing the default interest rate in note. Predefault interest rate was 5%; postdefault rate was 7%. Creditor accelerated and imposed default interest rate before petition. Plan proposed to cure default and reinstate the 5% predefault rate of interest. "[Litton v. Wachovia Bank (In re Litton), 330 F.3d 636 (4th Cir. May 27, 2003) (Michael, King, Shedd),] and other cases that hold that the right to cure default within the meaning of § 1322(b)(5) includes returning the parties to their respective pre-default positions are distinguishable . . . because they contemplate situations in which the only consequence of default is acceleration of the debt. . . . By contrast, in the Debtors' case, the cure as proposed by the Debtors would lead to a fundamental alteration of the terms of the Note. . . . [T]he interest rate increased by 2.00% when the payments became more than 30 days delinquent. . . . Litton and its progeny can nevertheless coexist with a finding that while cure allows for a previously accelerated loan to be reinstated, the concept of cure does not expand to allow a debtor to reinstate a promissory note and in addition alter terms that are a fundamental aspect of a creditor's claim. . . . Allowing the Debtors to cure the default by returning to the pre-default interest rate and monthly payments would be taking a step beyond reinstating the pre-bankruptcy agreement. Instead, the change would modify the Note in violation of § 1322(b)(2) . . . . While the Debtors have the right to reverse the acceleration of the Note pursuant to 11 U.S.C. § 1322(b)(5) and cure the arrearages as prescribed by [Nobelman v. American Savings Bank, 508 U.S. 324, 113 S. Ct. 2106, 124 L. Ed. 2d 228 (June 1, 1993),] they may not extend the terms of the contract and propose a plan with monthly payments at the pre-default rate without running afoul of 11 U.S.C. § 1322(b)(2).").

In re Alexieff, No. 12-03248-8-JRL, 2012 WL 2064584 (Bankr. E.D.N.C. June 7, 2012) (Leonard) (Mortgage was beyond rehabilitation and residence was not property of Chapter 13 estate when statutory period for upset bids under North Carolina law expired before the petition. Completion of foreclosure sale was not stayed and mortgagee's motion for stay relief was moot.).

In re Monroe, No. 11-05167-8-RDD, 2011 WL 5509219 (Bankr. E.D.N.C. Nov. 7, 2011) (Doub) (Mortgage claim could not be cured or treated in plan when debtor had only possessory interest; foreclosure was completed and upset bid period expired prepetition.).

In re McDonald, No. 10-09196-8-JRL, 2011 WL 5909628 (Bankr. E.D.N.C. June 1, 2011) (Leonard) (Under North Carolina law, completed foreclosure sale could not be set aside after 10-day upset bid period expired; debtor's motion to set aside case dismissal was denied, when purpose was to attack foreclosure completed after dismissal, when automatic stay had terminated.).

In re Mize, No. 09-02784-8-JRL, 2009 WL 2497824 (Bankr. E.D.N.C. Aug. 14, 2009) (Leonard) (Although § 1322(e) overruled Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), with respect to contracts after October 22, 1994, when note provided for interest at 9% on all sums in default, noteholder was entitled to compound interest on interest portion of amount in default at petition.).

In re Mize, No. 09-02784-8-JRL, 2009 WL 2497824 (Bankr. E.D.N.C. Aug. 14, 2009) (Leonard) (To cure default under § 1322(e), mortgage holder was entitled to compound interest at 9% based on provision in note.).

In re Mize, No. 09-02784-8-JRL, 2009 WL 2497824, at *1 n.1 (Bankr. E.D.N.C. Aug. 14, 2009) (Leonard) ("Under § 1322(e), the amount necessary to cure default is determined without regard to whether the claim is oversecured or undersecured.").

Middle District of North Carolina

In re Saeed, No. 10-10303, 2010 WL 3745641 (Bankr. M.D.N.C. Sept. 17, 2010) (unpublished) (Waldrep) (Habitat for Humanity waived fees in its proof of claim by failing to comply with North Carolina statute requiring servicer of mortgage to mail statement clearly and conspicuously explaining attorney fees.).

In re Sarver, No. 10-81039C-13D, 2010 WL 3501795, at *2 (Bankr. M.D.N.C. Sept. 1, 2010) (unpublished) (Stocks) (Debtor's equity of redemption expired under North Carolina law—leaving no interest to become property of the estate—when Chapter 13 petition was filed after close of business in state clerk's office, on last date for submitting upset bid after foreclosure. "[B]ecause the petition was filed after the close of normal business, the filing did not occur within the upset bid period which meant that the upset bid period was not suspended by the bankruptcy filing and the ownership rights of the debtor therefore had ended before the bankruptcy case was filed.").

In re Obie, No. 09-80794C-13D, 2009 WL 4113587 (Bankr. M.D.N.C. Nov. 24, 2009) (Stocks) (Under § 1322(e), creditor's claim for attorney fees is dependent on state law; mortgage servicer waived right to attorney fees under North Carolina law by failing to provide a required statement within 30 days after fee was assessed explaining the fee in clear and conspicuous manner.).

In re Obie, No. 09-80794C-13D, 2009 WL 4113587 (Bankr. M.D.N.C. Nov. 24, 2009) (Stocks) (Undersecured mortgage creditor can be entitled to attorney fees, but § 1322(e) makes recovery of attorney fees dependent on contract and applicable nonbankruptcy law; mortgage servicer waived right to attorney fees under North Carolina law by failing to provide statement of attorney fees to debtor within 30 days after fees were assessed.).

In re Bartch, No. 09-80623C-13D, 2009 WL 3853215 (Bankr. M.D.N.C. Nov. 16, 2009) (Stocks) (Under § 1322(e), creditor's claim for attorney fees is not dependent on claim's being oversecured but is dependent on state law; under North Carolina law, creditor (mortgage servicer) waived right to attorney fees by failing to provide a required statement within 30 days after fee was assessed, explaining fee in clear and conspicuous manner.).

In re Bartch, No. 09-80623C-13D, 2009 WL 3853215 (Bankr. M.D.N.C. Nov. 16, 2009) (Stocks) (Although § 1322(e) does not require mortgage creditor to be oversecured to be entitled to attorney fees, that section does make recovery of attorney fees dependent on parties' contract or applicable nonbankruptcy law; North Carolina law requires mortgage servicer to provide statement of attorney fees to debtor within 30 days after fee is assessed, explaining fee in clear and conspicuous manner, and servicer's failure to provide such statement was waiver of attorney fees.).

Western District of North Carolina

In re Polkinghorn, No. 08-31360, 2011 WL 6782546 (Bankr. W.D.N.C. Dec. 27, 2011) (Beyer) (Arrearage caused by addition of forced-place insurance during prior completed Chapter 13 case was added to principal balance of loan, rather than treated as arrearage in current plan.).

South Carolina

Ginn v. CitiMortgage, Inc. (In re Ginn), 465 B.R. 84 (Bankr. D.S.C. Jan. 11, 2012) (Burris) (Section 1322(e) trumps § 506(b) for purposes of curing and maintaining mortgage under § 1322(b)(5).).

In re Madison, 438 B.R. 866 (Bankr. D.S.C. Nov. 3, 2010) (Duncan) (Prepetition foreclosure sale complied with South Carolina law and divested debtor of all but bare legal title. Sixteen-day waiting period under state law from first publication date to sale did not require mortgagee to wait until 17th day after publication to conduct sale. Advertisement of sale was proper. Cause existed to lift stay to allow mortgagee to take administrative steps necessary to complete foreclosure.).

Virginia

Eastern District of Virginia

In re Arnold, No. 06-10671-SSM, 2006 WL 2685103, at *2 (Bankr. E.D. Va. Sept. 18, 2006) (unpublished) (Mitchell) (Interest on arrearages when plan cures default and maintains payments under § 1322(b)(5) is required under § 1322(e) only when agreement and applicable nonbankruptcy law require interest. "The court has reviewed the promissory notes . . . and is unable to discern any language in the notes that would entitle Burke & Herbert to interest on interest or to interest on late charges. Nor, at the hearing, could counsel for Burke & Herbert point to such language. Thus, there is no requirement for the plan to pay interest on the arrears.").

Western District of Virginia

In re Wolfe, 344 B.R. 762 (Bankr. W.D. Va. Mar. 30, 2006) (Stone) (Applying Virginia law, interest in residence became property of Chapter 13 estate because foreclosure sale was conducted before the petition but no memorandum of sale was executed until after. Mortgage holder is not entitled to relief from stay to complete foreclosure because debtors assert there is equity and that defaults can be cured through plan.).

West Virginia

Northern District of West Virginia

In re Bardell, 374 B.R. 588 (N.D. W. Va. Aug. 10, 2007) (Bailey) (Prepetition foreclosure sale conducted in accordance with West Virginia law was complete upon acceptance of bid and execution of memorandum of sale, and debtor had no right to cure defaults or avoid sale.), aff'g 361 B.R. 468 (Bankr. N.D. W. Va. 2007).).

E.  Fifth Circuit

Wells Fargo Bank, N.A. v. Stewart (In re Stewart), 647 F.3d 553 (5th Cir. July 22, 2011) (Higginbotham, Clement, Owen) (Individual Chapter 13 debtor lacks standing and bankruptcy court lacks jurisdiction to order Wells Fargo to audit every proof of claim filed in district and to provide complete loan history on every account.), vacating in part, dismissing appeal in part No. 08-3225, 2009 WL 2448054 (E.D. La. Aug. 7, 2009) (Berrigan), aff'g 391 B.R. 327, 357 (Bankr. E.D. La. Apr. 10, 2008) (Magner) (On facts similar to Jones v. Wells Fargo Home Mortgage (In re Jones), 366 B.R. 584 (Bankr. E.D. La. 2007): mortgage servicing agent failed to notify debtor of fees and other charges; servicer applied mortgage payments to hidden fees and charges, contrary to provisions of note; drive-by inspection fees were unreasonable and disallowed; charges for nine separate value opinions were unnecessary; misapplication of payments to satisfy late charges and inspection fees made escrow calculations incorrect; and, servicer improperly interpreted mortgage documents to permit multiple late charges on single late payment. "The Court finds that Wells Fargo was negligent in its practices and took insufficient remedial action following this Court's rulings in Jones v. Wells Fargo to remedy problems with its accounting. The Court will assess damages in the amount of $10,000.00, plus $12,350.00 in legal fees, for the abusive imposition of unwarranted fees and charges (late fees and inspection costs); the illegal imposition of fees disguised as costs (BPO charges); the negligent imposition of fees and costs not due (legal charges and deposits reimbursed); the improper calculation of escrow payments; the misapplication of payments contrary to the terms of the Note and Mortgage; the failure to notify Debtor of fees and charges on her account; and the improper payment of unnoticed fees and charges during pending bankruptcies. The Court will also sanction Wells Fargo in the amount of $2,500.00 for its actions in connection with presenting a consent adequate protection order to the Court, which did not reflect the agreement between the parties as represented to the Court. Finally, the Court will sanction Wells Fargo $2,500.00 for filing significantly erroneous proofs of claim in 2004 and 2007 and misrepresenting the costs associated with Premiere. In order to rectify this problem in the future, the Court orders Wells Fargo to audit every proof of claim it has filed in this District in any case pending on or filed after April 13, 2007, and to provide a complete loan history on every account. For every debtor with a case still pending in the District, the loan histories shall be filed into the claims register and Wells Fargo is ordered to amend, where necessary, the proofs of claim already on file to comply with the principles established in this case and Jones. For closed cases, Wells Fargo is ordered to deliver to Debtor, Debtor's counsel and Trustee a copy of the accounting.").

In re Hence, No. 07-20400, 2007 WL 3252139, at *2 (5th Cir. Nov. 5, 2007) (unpublished) (Reavley, Smith, Barksdale) (Bankruptcy court "carefully considered all the circumstances of the instant case and did not abuse its discretion" to allow debtor to cure mortgage defaults by making payments during months 15 through 57 of plan.), aff'g Nos. H-07-0098, 06-32451-H4-13, 2007 WL 1176787 (S.D. Tex. Apr. 20, 2007) (Bankruptcy court did not abuse discretion in approving cure of $5,000 mortgage arrearage during months 15 through 57 of plan when debtor is devoting disposable income and making good-faith, best effort.), aff'g 358 B.R. 294, 304-05 (Bankr. S.D. Tex. Dec. 20, 2006) (Payment of mortgage arrearages in months 15 through 57 satisfies "reasonable time" requirement in § 1322(b)(5). "[T]he flexible, case-by-case approach adopted by most courts considering the issue is in line with cases from the Fifth Circuit. . . . The Debtor's Amended Plan provides for payment of the arrearages within the last 42 months of a 60-month plan. . . . [S]uch a schedule does not contradict cases from courts in the Fifth Circuit as the payment of all of the arrearages would still occur within the term of the Amended Plan. [The mortgagee] has provided no authority supporting its contention that delaying commencement of payments on the arrearages until the 15th monthly payment is unreasonable, and this Court finds none.").

In re Hence, No. 07-20400, 2007 WL 3252139, at *2 (5th Cir. Nov. 5, 2007) (unpublished) (Reavley, Smith, Barksdale) ("[W]e are not convinced that Hence's promissory note and deed of trust require interest-on-interest payments as part of the cure."), aff'g Nos. H-07-0098, 06-32451-H4-13, 2007 WL 1176787, at *3 (S.D. Tex. Apr. 20, 2007) (Curing mortgage arrearage without interest is approved based on finding that under Texas law contract did not clearly and unequivocally provide "that default will automatically result in acceleration of the maturity date, and there is no evidence that Indian Cave undertook any steps otherwise to cause all amounts owed on the Note to become immediately due."), aff'g 358 B.R. 294, 306-07 (Bankr. S.D. Tex. Dec. 20, 2006) (Mortgage that ambiguously provided for interest on "matured, unpaid amount" did not require interest on arrears under § 1322(e). "Considering that Congress intended that 'a cure pursuant to a plan should operate to put the debtor in the same position as if the default had never occurred,' [the mortgagee] is not entitled to 18.00% 'interest-on-interest' on any 'matured, unpaid amounts.' . . . Under the underlying agreement and applicable nonbankruptcy law, [the mortgagee] is not entitled to 18.00% 'interest-on-interest' on 'matured, unpaid amounts,' primarily because the Note is ambiguous. . . . There is no evidence that [the mortgagee] accelerated the Note, or clearly and unequivocally declared the amounts due immediately, thereby accelerating the Maturity Date of July 1, 2019.").

Louisiana

Eastern District of Louisiana

Jones v. Wells Fargo Home Mortg., Inc., 489 B.R. 645 (E.D. La. Mar. 19, 2013) (Lemelle) (After remand, bankruptcy court entered punitive damage award of 10 times $317,115.40 compensatory damage award. District court affirmed, holding amount did not violate due process limitations. Bankruptcy court found that mortgage lender violated automatic stay by misapplying plan payments without notice to debtor and without leave of court in numerous cases. Wells Fargo was on sufficient notice that actions were impermissible and could incur significant penalties.), aff'g No. 06-1093, 2012 WL 1155715 (Bankr. E.D. La. Apr. 5, 2012) (Magner), on remand from 439 Fed. Appx. 330 (5th Cir. Aug. 24, 2011) (unpublished) (Higginbotham, Smith, Haynes), remanding No. CIV. 07-3599, 2010 WL 3398849 (E.D. La. Aug. 24, 2010) (Lemelle), aff'g 418 B.R. 687, 698-99 (Bankr. E.D. La. Oct. 1, 2009) (Magner) (On remand to consider whether punitive damages should be awarded instead of requiring Wells Fargo to implement accounting procedures, injunctive relief is necessary to prevent Wells Fargo from violating the stay in Chapter 13 cases and to enforce compliance with cure provisions in confirmed plans. Accounting procedures ensure that plan payments are properly allocated between postpetition and prepetition debts, that debtors are notified of charges incurred and that Wells Fargo seeks permission before imposing charges payable from estate funds. Wells Fargo had assured bankruptcy court that it would alter its procedures but then reneged prior to appeal. Court found that Wells Fargo had adopted a "scream or die" approach: "[E]very debtor in the district should be made to challenge, by separate suit, the proofs of claim or motions for relief from the automatic stay filed by Wells Fargo. It has steadfastly refused to audit the pleadings or proofs of claim on file in the district for errors and has refused to voluntarily correct any errors that come to light except through threat of litigation. Although its own representatives have admitted that it routinely misapplied payments on loans and improperly charged fees, they have refused to correct past errors. They stubbornly insist on limiting any change in their conduct prospectively, even as they seek to collect on loans in other cases for amounts owed in error."), remanded by 391 B.R. 577 (E.D. La. July 1, 2008) (Berrigan) Wells Fargo violated automatic stay by charging attorney and other fees during case administration without disclosure and by applying postconfirmation installment payments to prepetition debt. Remand is necessary to reconsider whether injunctive relief, requiring Wells Fargo to change its accounting procedures in all bankruptcy cases, is appropriate.), aff'g in part and rev'g in part, 366 B.R. 584, 602-03 (Bankr. E.D. La. 2007) (Willful violation of § 362(a)(3) and (6) when Wells Fargo applied postpetition payments to undisclosed fees and charges. Wells Fargo is ordered to return $16,852.01. "Bankruptcy courts can not function if secured lenders are allowed to assess postpetition fees without disclosure and then divert estate funds to their satisfaction without court approval.").

In re Curley, 572 B.R. 622, 626-37 (Bankr. E.D. La. July 7, 2017) (Magner) (Purchaser at Louisiana property tax sale is not a creditor and is not bound by plan that redeems property on terms different from those permitted by state law. Purchaser is entitled to stay relief to complete tax certificate process. Debtors’ failure to list purchaser for notice purposes is due process violation. Confirmed plan proposed to pay city its priority tax claim in full with interest. Property had been sold before the petition at a tax sale and purchaser was not listed as a creditor nor given notice of the plan before or after confirmation. “A plan may force a creditor to accept payment to cure a default over time. However, it may not adjust the rights of a third party who is not a creditor of the estate . . . . Because only a creditor with an allowed claim may receive distributions under a Chapter 13 plan, . . . it is inappropriate for a debtor to place payments to a non-creditor into a plan. By virtue of the Tax Sale, AP became the 70% owner of [the debtor’s property]. . . . AP’s payment of taxes after the Tax Sale extinguished Debtors’ obligation to the City. . . . When AP purchased [the property], it did not purchase Debtors’ obligation to the City. Instead, it obtained a right to [the property’s] title, assuming Debtors did not exercise their right to redeem. . . . Debtors were under no obligation to exercise the redemptive right and owed no obligation to AP if they did not redeem. Nor could AP force Debtors to redeem or waive their right of redemption. . . . The Tax Sale was completed prior to the Petition Date. Because the Tax Sale was complete, the tax obligation was satisfied. What remained was Debtors’ right of redemption. That right burdened AP’s ability to obtain title, but did not create an enforceable right to payment in favor of AP because as of the Petition Date, Debtors had not yet exercised their right to redeem. . . . AP has no ‘right to payment’ from Debtors or ‘claim’ pursuant to section 101(5) because under Louisiana law, Debtors had the right, but not the obligation, to redeem [the property]. . . . Because AP was not a creditor but held an interest in property of the Debtors’ estate, it was a party in interest to this case. . . . Despite [In re LaMont, 740 F.3d 397 (7th Cir. Jan 7, 2014) (Manion, Kanne, Sykes)]’s holding, this Court can find no support for the permanent modification of a third party noncreditor’s rights under state law through a plan. . . . A Chapter 13 Plan is not binding on third parties. . . . Even if AP was a creditor, a Chapter 13 plan is only binding on creditors who received notice. . . . [T]he City’s rights were unaffected by the Plan . . . because the City had already been paid in full. Debtors attempted to obtain, through confirmation, a material change in AP’s rights. . . . Debtors’ failure to notice AP cannot be maintained, for certainly this was an attempt to make a taking without due process. . . . [I]t was improper for Debtors to list redemption payment to the City as a Plan term. Instead, Debtors were obligated to perform as required by law. . . . [T]his Court declines to follow the reasoning of [In re Pittman, 549 B.R. 614 (Bankr. E.D. Pa. May 6, 2016) (Chan)]. . . . What [In re Jimerson, 564 B.R. 430 (Bankr. N.D. Ga. Jan. 27, 2017) (Baisier)], [Prado v. Cash America Advance, Inc. (In re Prado), 340 B.R. 574 (Bankr. S.D. Tex. Mar. 31, 2006) (Isgur)], and Pittman all have in common is the fact that the property remained property of the estate, and the right to redeem was against each of the debtors’ creditors. This Court believes that these facts lead the courts to conclude that a ‘cure’ of the default or extension of the redemptive period was justified. . . . [T]his Court respectfully disagrees. . . . While the automatic stay prevents AP from taking steps to quiet title, it does not stay the redemptive period. . . . Because the redemptive period expired without Debtors redeeming [the property], the Court will grant AP’s Motion for Relief from the Automatic Stay so that it may proceed to confirm the Tax Sale.”).

In re Shelby, No. 12-11532, 2013 WL 1344494 (Bankr. E.D. La. Apr. 3, 2013) (Magner) (CitiMortgage improperly required force-placed insurance when debtors had insurance throughout loan, increasing escrow amount substantially. Debtors were credited with force-placed premiums and costs associated with policy. Escrow balance was adjusted and debtors may seek sanctions within 120 days.).

Middle District of Louisiana

Saylor v. Select Portfolio Servicing, Inc. (In re Saylor), No. 06-8035, 2007 WL 128789, at *2 (Bankr. M.D. La. Jan. 12, 2007) (unpublished) (Sawyer) ("Post-confirmation charges to a mortgagee's account are not governed by the provisions of section 506," citing Telfair v. First Union Mortgage Corp., 216 F.3d 1333, 1340 (11th Cir. 2000); agreed order on Select Portfolio's motion for relief from stay had fixed delinquency and provided for $600 attorney fee to Select, but Select "was not precluded from making any charges, except those that were actually litigated or settled." Assessment of other postconfirmation attorney fees did not violate § 362(a)(3).).

Western District of Louisiana

In re Mallett, No. 06-50564, 2006 WL 2844018 (Bankr. W.D. La. Sept. 19, 2006) (unpublished) (Schiff) (Sheriff's sale an hour before petition divested debtor of all interest in mobile home under Louisiana law; motion to extend automatic stay under § 362(c)(3) is denied because debtor had no interest in mobile home to protect in Chapter 13 case.).

Mississippi

Northern District of Mississippi

In re Pease, No. 09-16595-DWH, 2010 WL 2505890 (Bankr. N.D. Miss. June 21, 2010) (unpublished) (Houston) (Prepetition arrearage claim was recalculated to give debtor full credit for prepetition mortgage payments.).

In re Evans, 421 B.R. 217 (Bankr. N.D. Miss. Oct. 26, 2009) (Houston) (On trustee's motion to declare § 1322(b)(5) claim of mortgagee current and all defaults cured, debtors must pay premiums for forced-placed insurance. Mid-State Homes did not seek permission prior to assessment of forced-placed hazard insurance under Bankruptcy Rule 2016(a), which was applicable because property of estate did not revest in debtors at confirmation and automatic stay remained in effect. Debtors were not completely blameless, having executed deed of trust and contract contemplating forced-placed insurance if debtors failed to acquire coverage. As equitable solution, debtors must repay insurance premiums over five years with 6% interest.).

Murry v. Green Tree Servicing, LLC (In re Murry), 416 B.R. 290 (Bankr. N.D. Miss. Aug. 25, 2009) (Houston) (Under Green Tree Financial Corp. v. Payton (In re Payton), 22 F.3d 1094 (5th Cir. 1994), mortgage servicer may not penalize debtors based on administrative procedures used by Chapter 13 trustees; factual issues remained in adversary proceeding alleging that Green Tree improperly charged interest when payments timely made by debtors to trustee were not timely received by Green Tree from trustee.).

In re Hines, No. 03-10885, 2009 WL 1111117, at *2 (Bankr. N.D. Miss. Apr. 22, 2009) (unpublished) (Houston) (Claim for hazard insurance premiums was disallowed because mortgage creditor failed to comply with Bankruptcy Rule 2016(a). Quoting In re Padilla, 379 B.R. 643, 659 (Bankr. S.D. Tex. 2007): "Without Rule 2016(a) applications, the court cannot insure compliance with § 1327(a), protect a debtor's rights under [§] 1322(b)(5), or protect a debtor's right to a 'fresh start' after completing a Chapter 13 plan."), reconsideration denied, 2009 WL 1726371, at *3 (Bankr. N.D. Miss. June 18, 2009) (Houston) (Claims of mortgage creditor are disallowed for forced-placed insurance premiums imposed without disclosure and request under Bankruptcy Rule 2016(a).).

Hodges v. Deutsche Bank Nat'l Trust Co. (In re Hodges), No. 08-1036-DWH, 2008 WL 4905474 (Bankr. N.D. Miss. Oct. 8, 2008) (unpublished) (Houston) (In adversary proceeding disputing validity of nonjudicial foreclosure, issues of fact prevent summary judgment to either party on whether foreclosure sale was held in compliance with applicable nonbankruptcy law.).

Greenpoint Credit, LLC v. Isom (In re Isom), 342 B.R. 743 (Bankr. N.D. Miss. May 17, 2006) (Houston) (Only debtor's two-year statutory right of redemption became property of Chapter 13 estate when residential real property was sold at a tax sale in April of 2001 and petition was filed in December of 2002; automatic stay did not toll statutory right of redemption which expired four months after Chapter 13 petition, ending all interest of the debtor in the real property.).

In re Madison, 337 B.R. 99, 103 (Bankr. N.D. Miss. Jan. 5, 2006) (Houston) (Fees for preparation and filing of proofs of claim are not part of arrearage claim for curing default under § 1322(e). Section 1322(e) only addresses payments necessary to cure default. Preparation and filing of proofs of claim are not related to default being cured. "Whether this service is to be paid by the debtor or the creditor depends on whether the creditor's claim is oversecured, and whether the underlying security agreement provides for the debtor to pay such a fee, all as contemplated by § 506(b). An undersecured creditor should not be permitted to string any ambiguity in § 1322(e) to 'bootstrap' itself into the same posture as an oversecured creditor just so that it can collect an additional fee from the debtor that would otherwise not be allowed.").

Texas

Northern District of Texas

Jones v. Wells Fargo Bank, N.A. (In re Jones), 573 B.R. 665, 67275 (Bankr. N.D. Tex. Aug. 30, 2017) (Jernigan) (Prepetition nonjudicial foreclosure sale under Texas law cut off debtor’s rights under § 1322(c) notwithstanding that recording of trustee’s deed occurred after the petition. Nonjudicial foreclosure sale occurred one day before the petition. Substitute trustee’s deed may not have been delivered but definitely was not filed until after the petition. There was no allegation of irregularity in the foreclosure sale. “[A] foreclosure sale is considered complete so as to give a purchaser superior rights at the time the actual sale event occurs (not when follow-up documentation is completed, delivered, and recorded). . . . [T]he Substitute Trustee had authority to act as both purchaser and seller and ‘delivered’ the Substitute Trustee’s Deed to the purchaser (i.e., the Lender) when he executed the Substitute Trustee’s Deed and had it notarized on the day before the Debtor filed bankruptcy.”).

In re Rodriguez, No. 16-10047-rlj13, 2016 WL 4595484 (Bankr. N.D. Tex. Sept. 2, 2016) (Jones) (Applying § 1322(e), arrearage on contract to buy real estate will be paid through the plan without interest when contract does not require interest on interest but instead only requires interest on principal.).

Southern District of Texas

Rodriguez v. Countrywide Home Loans, Inc., 421 B.R. 341 (S.D. Tex. Dec. 3, 2009) (Hanen) (District court agrees with Padilla v. Wells Fargo Home Mortgage, Inc., 379 B.R. 643 (Bankr. S.D. Tex. 2007), that lender must disclose and seek bankruptcy court approval of fees and expenses charged postpetition and pre-discharge. District court rejects Padilla v. GMAC Mortgage Corp., 389 B.R. 409 (Bankr. E.D. Pa. 2008), which held that neither § 506(b), § 1322(b)(5) nor Bankruptcy Rule 2016 requires creditor to give notice or seek court approval of postpetition fees. Issues in adversary proceeding were core, and neither mandatory nor permissive withdrawal of reference was justified.).

Hence v. Indian Cave Park P'ship, No. H-07-0098, Bankr. No. 06-32451-H4-13, 2007 WL 1176787, at *3 (S.D. Tex. Apr. 20, 2007) (Curing mortgage arrearage without interest is approved based on finding that under Texas law contract did not clearly and unequivocally provide "that default will automatically result in acceleration of the maturity date, and there is no evidence that Indian Cave undertook any steps otherwise to cause all amounts owed on the Note to become immediately due.").

In re Daulton, No. 11-33892-H5-13, 2017 WL 1155696 (Bankr. S.D. Tex. Mar. 27, 2017) (Brown) (Homeowners’ association improperly applied payments from debtor to prepetition arrears and then assessed late charges, fees and interest throughout years of Chapter 13 case; homeowners’ association was bound by confirmed play to apply payments from the trustee to its arrearage claim and to apply payments from the debtor to current assessments with result that debtor was actually paid in advance by end of Chapter 13 case. Homeowners’ association was ordered to pay debtor’s attorney fees for failing to properly account for payments during Chapter 13 case.).

In re Lewis, No. 15-80355-G3-13, 2016 WL 4141040, at *2–*3 (Bankr. S.D. Tex. Aug. 2, 2016) (Paul) (“Section 1322(b)(5) gives debtors the opportunity to keep their homes by curing defaults and maintaining payments under the chapter 13 plan. . . . Debtor in the instant case is permitted to maintain payments, and cure the arrearage, notwithstanding the prepetition acceleration of the mortgage and the termination of stay.”).

In re Perez, No. 13-36124-H5-13, 2014 WL 4792226, at *3 (Bankr. S.D. Tex. Sept. 24, 2014) (Brown) (Citing Velazquez v. Countrywide Home Loans Servicing, L.P. (In re Velazquez), 660 F.3d 893 (5th Cir. Oct. 17, 2011) (King, Davis, Garza), postpetition, preconfirmation fees and expenses—$300 proof of claim/bankruptcy fee plus $350 attorney fee—provided for in loan documents and allowed by nonbankruptcy law are part of amount required to cure default under § 1322(e). "A mortgagee is entitled to recover its attorney's fees incurred post-petition where: (1) the language of the deed of trust provides for such fees, (2) there was a default under the loan documents, (3) a triggering event under the deed of trust has occurred, such as the filing of a chapter 13 case which may significantly affect the mortgagee's rights under the deed of trust, (4) the mortgagee incurred fees for acts that were reasonable or appropriate to preserve its rights under the deed of trust, and (5) the fees were reasonably and appropriately incurred to protect the mortgagee's rights under the deed of trust. . . . If fees and costs are permitted under the underlying agreement and applicable nonbankruptcy law, then Bankruptcy Code § 1322(e) requires the debtor to include the fees and costs in the arrearage cure amount notwithstanding the mortgage creditor's undersecured status.").

Saldivar v. JPMorgan Chase Bank, N.A. (In re Saldivar), No. 12-01010, 2013 WL 2452699 (Bankr. S.D. Tex. June 5, 2013) (Isgur) (Property taxes were properly escrowed under deed of trust, and debtors did not prove that inspection and appraisal fees were inflated.).

Rodriguez v. Countrywide Home Loans, Inc. (In re Rodriguez), No. 08-01004, 2013 WL 1748800 (Bankr. S.D. Tex. Apr. 23, 2013) (unpublished) (Isgur) (Inspection fees are governed by Bankruptcy Rule 2016, requiring Countrywide to seek approval before reimbursement from debtors. Late fees are not governed by rule because they are contractual obligations rather than reimbursable expense. Legal fees charged without seeking court approval violated confirmation order. Permanent injunction was issued to prevent future violations of Rule 2016 requirements.).

In re Wagner, No. 06-30919, 2011 WL 2636841 (Bankr. S.D. Tex. July 1, 2011) (Isgur) (Reimbursement of hazard insurance premiums advanced postpetition by mortgage creditor was subject to local rule requirement for annual reports of postpetition expenses for which creditor may seek reimbursement. Secured creditors are not required to file proofs of claim but must file claims and comply with local rules if they wish to be paid under confirmed plans. Compliance with annual report was not violation of § 1322(b)(2). Creditor lost reimbursement for years in which it failed to file reports.).

In re Brown, No. 10-40234-H3-13, 2011 WL 1258182 (Bankr. S.D. Tex. Apr. 1, 2011) (Paul) (Purchaser at prepetition foreclosure sale was denied stay relief—conditioned that debtor make payments and cure arrears—when debtor had filed adversary proceeding contesting foreclosure. Movant made no showing of authority to foreclose.).

Rodriquez v. Countrywide Home Loans, Inc. (In re Rodriguez), 396 B.R. 436, 459-60 (Bankr. S.D. Tex. Sept. 18, 2008) (Isgur) (Complaints alleging that Countrywide violated confirmed plans and discharge orders by assessing attorney fees and postconfirmation charges without disclosure and without approval under Fed. R. Bankr. P. 2016 survive motions to dismiss. Padilla v. Wells Fargo Home Mortgage, Inc. (In re Padilla),379 B.R. 643 (Bankr. S.D. Tex. 2007), correctly determined that mortgagee is bound by Chapter 13 plan to properly allocate postconfirmation payments and to seek court approval under Rule 2016 before assessing fees or other reimbursable expenses. Under Padilla, charging fees without approval under Rule 2016 violates confirmation order. Contract rights to reasonable fees are subject to bankruptcy court determination of reasonableness. Attempting to collect unapproved fees and charges after discharge violates discharge injunction. Court distinguishes Padilla v. GMAC Mortgage Corp. (In re Padilla), 389 B.R. 409 (Bankr. E.D. Pa. 2008), which held that § 1327(a) rather than confirmation order created legal right from which § 105 remedies arose. Bankruptcy courts may not use § 105 "to create new substantive rights or contravene specific Code provisions. . . . A prohibition against creating new substantive rights is not a direction to gut § 105 in a manner that precludes enforcement of substantive rights. Allowing debtors to seek damages for violations of Court orders confirming chapter 13 plans and the Bankruptcy Code provisions implemented by the Court enforces the rights. This use of § 105 creates no rights. Rather, this use is a remedy to enforce rights explicitly provided for in the Bankruptcy Code and the promised fresh start. Consistent with § 105, the remedy may take the form of a private cause of action. Section 105's plain language authorizes bankruptcy courts to issue any judgments necessary or appropriate to carry out the provisions of the Bankruptcy Code. ").

In re Hight, 393 B.R. 484 (Bankr. S.D. Tex. Aug. 13, 2008) (Bohm) (Claim for escrow shortage is denied when mortgagee failed to establish that it had paid delinquent taxes; claim for late charges is allowed when debtor failed to establish absence of entitlement to late charges under note and deed of trust.).

In re Prevo, 394 B.R. 847, 850-51 (Bankr. S.D. Tex. Aug. 7, 2008) (Bohn) (Amended proof of claim lacking documentation prevents determination of reasonableness of fees and charges and results in disallowance; show cause is set to determine whether mortgagee should pay debtor's fees for filing and prosecuting objection. "The Court needs to see evidence that these fees were actually incurred by Citi, such as invoices detailing who performed what services and for how long-essentially the same information that would be included in a fee application. . . . The Court would also note that amending proofs of claim, only after the debtor files an objection, to withdraw fees that should not have been included in the first instance is unsatisfactory because it does not address the larger problem with the way mortgage companies are filing proofs of claim. Based upon hearings in this and other cases, the Court believes that certain members of the mortgage industry are intentionally attempting to game the system by requesting undocumented and potentially excessive fees and then reducing those fees in amended proofs of claim only after being exposed by debtor's counsel.").

Wilborn v. Wells Fargo Bank, N.A. (In re Wilborn), No. 07-3481, 2008 WL 2078089 (Bankr. S.D. Tex. May 15, 2008) (unpublished) (Bohm) (Motion to strike mortgagee's jury demand granted when debtor seeks disgorgement as equitable remedy for violations of § 506(b) and Bankruptcy Rule 2016 in complaint alleging that mortgagee improperly charged attorney fees and costs in excess of reasonable amounts and without proper disclosure; mortgagee forfeited jury trial right by filing proof of claim.).

Harris v. Fidelity Nat'l Info. Servs. Inc. (In re Harris), No. 08-3014, 2008 WL 924939 (Bankr. S.D. Tex. Apr. 4, 2008) (unpublished) (Bohm) (Mortgage servicer is not a creditor to whom § 506(b) might apply; complaint alleging "unauthorized fee splitting with law firms" by mortgage servicer is dismissed in part, but Rule 2016(a) may apply to the extent mortgage servicer paid fees to law firms.).

Gomez v. Kamper Invs., LLC (In re Gomez), 388 B.R. 279 (Bankr. S.D. Tex. Apr. 3, 2008) (Isgur) (Foreclosure sale one day before Chapter 13 filing is avoided when trustee's deed had not been delivered to third-party purchaser; under § 1322(c)(1), applying Texas law, foreclosure sale was not complete and did not terminate debtor's redemption rights. "At most, [third-party purchaser] may have possessed a contract right to purchase the property contingent on future events. Had inquiry been made, the hypothetical purchaser would have learned that the purported foreclosure sale was subject to . . . conditions [and would have realized sale was not complete under Texas law.] Accordingly, the Court finds that a bona fide purchaser, at the moment of the bankruptcy filing, would not have had notice that the property had been sold at a valid foreclosure sale.").

In re Harris, No. 07-34495-H3-13, 2007 WL 4105957, at *2 (Bankr. S.D. Tex. Nov. 16, 2007) (unpublished) (Letitia Clark) (Applying § 1322(e), contract and state law provide that mortgagee is entitled to interest on interest. Contract included words "plus interest" in definition of "loan," adding interest to "all sums due under this security instrument.").

Padilla v. Wells Fargo Home Mortgage, Inc. (In re Padilla), 379 B.R. 643, 656, 657, 659, 668 (Bankr. S.D. Tex. Aug. 3, 2007) (Isgur) (When mortgage lenders charged postconfirmation inspection fees, attorneys' fees and other expenses and without court authorization, § 506(b) is not applicable, citing Rake v. Wade, 508 U.S. 464, 468, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993) ("506(b) applies only from the date of filing through the confirmation date"), and Telfair v. First Union Mortgage Corp., 216 F.3d 1333, 1337 (11th Cir. 2000) (§ 506(b) has no application after confirmation), but "Rule 2016(a)'s plain language encompasses post-confirmation fees and expenses equally with pre-confirmation fees and expenses. The rule applies to any 'entity seeking interim or final compensation for services or reimbursement of necessary expenses, from the estate'." "Rule 2016(a) does not deny Wells Fargo or Novastar the ability to charge and collect post-petition Reimbursable Expenses. Rule 2016(a) only requires Wells Fargo and Novastar to receive approval for their Reimbursable Expense." Applying Texas law, unreasonable fees and expenses would be denied. Reasonableness under Rule 2016(a) is necessary for "just, speedy, inexpensive, efficient, and equitable" administration of Chapter 13 estates, including "ensur[ing] debtors can exercise their right to cure defaults[,]" and obtain a fresh start. Charging and collecting unauthorized fees and expenses can be remedied by disgorgement under § 105(a); "[h]owever, disgorgement is only proper if the professional costs were actually imposed or collected." Further hearing is required to determine if violation of confirmed plans has occurred though actual collection of unauthorized fees and expenses.).

Sanchez v. Ameriquest Mortgage Co. (In re Sanchez), 372 B.R. 289, 307, 308 (Bankr. S.D. Tex. July 24, 2007) (Bohm) (Postconfirmation charges for attorney's fees, costs and property inspection fees that were collected by Ameriquest without disclosure or approval are per se unreasonable under Texas law. "In failing to disclose the attorney's fees, costs, and property inspection fees to the Plaintiffs, the Defendant did not afford the Plaintiffs an opportunity to object to these charges, and thereby failed to give the Plaintiffs due process. In failing to disclose the attorney's fees, costs, and property inspection fees to the Court, as required by Rule 2016, the Defendant failed to give the Court the opportunity to determine the reasonableness of these charges as required by § 506(b), and therefore, the Court did not adjudicate the allowance of the Defendant's charges on the merits." Finding violation of stay and civil contempt, court allows recovery of all charges, with potential punitive damages to be decided in further trial.).

Campbell v. Countrywide Home Loans, Inc. (In re Campbell), 361 B.R. 831 (Bankr. S.D. Tex. Mar. 16, 2007) (Isgur) (Reasonable postpetition inspection fees and attorney fees are recoverable when a debtor cures default and maintains payments consistent with § 1322(b)(5) even when not allowed by § 506(b); because debtor cannot modify claim secured by principal residence except consistent with § 1322(b)(5), postpetition fees and charges do not violate automatic stay and will be determined after trial consistent with state law.).

In re Perez, 339 B.R. 385 (Bankr. S.D. Tex. Mar. 23, 2006) (Bohm) (Under uniform local plan and local rules, mortgage holder has option to apply monthly payment received after the petition to the next monthly installment due by contract—in which case late charges are assessable for a late payment during the Chapter 13 plan—or the mortgage holder can apply the monthly payment to an earlier past-due payment in which case the lender is automatically required to waive all postpetition late charges during the Chapter 13 plan. Citing In re Lee, 167 B.R. 417 (Bankr. S.D. Miss. Oct. 30, 1992) (Ellington), aff'd sub nom., Green Tree Fin. Corp.-Miss. v. Cowan, 168 B.R. 319 (S.D. Miss. Aug. 19, 1993) (Lee), aff'd sub nom., Green Tree Fin. Corp.-Miss. v. Payton (In re Payton), 22 F.3d 1094 (5th Cir. May 4, 1994) (Davis, Jones, Duhe), payment of a home mortgage by a Chapter 13 trustee on dates other than the monthly contract due date is not an impermissible modification for purposes of § 1322(b)(2).), aff'd, 373 B.R. 468 (S.D. Tex. July 19, 2007) (Rosenthal).).

Western District of Texas

Munoz v. James B. Nutter & Co. (In re Munoz), No. 10-3039-hcm, 2011 WL 710501 (Bankr. W.D. Tex. Feb. 22, 2011) (unpublished) (Mott) (Foreclosure was completed prepetition under Texas law by acceptance of purchaser's bid; property never became property of Chapter 13 estate. Recording of trustee's deed postpetition did not violate automatic stay, and foreclosure sale was not avoidable by debtors under §§ 544 or 549.).

F.  Sixth Circuit

Deutsche Bank Nat'l Trust Co. v. Tucker, 621 F.3d 460, 465 (6th Cir. Sept. 15, 2010) (Sutton, McKeague, Jonker) (Applying plain language of § 1322(e), arrearage claim of undersecured mortgagee includes reasonable fees and costs allowed by contract and nonbankruptcy law. Potential conflict between §§ 506(b) and 1322(e) resolves in favor of specific language in § 1322(e). Deutsche Bank's claim for arrearage included attorney fees to prepare proof of claim, prior bankruptcy fees, attorney fees for foreclosure, fees for property inspections and escrow advances. Underlying note and mortgage permitted bank to assess fees and expenses, and reasonableness was not disputed. Consideration of legislative history was unnecessary but would not change outcome. "The most that can fairly be inferred from this legislative history is that Congress wanted § 1322(e) to overrule [Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (June 7, 1993)]. But Congress could do so in two equally plausible ways: (1) tack on two new requirements for oversecured creditors like the one in Rake, or (2) create a new and broader rule that applies to all secured creditors, whether oversecured or undersecured. The legislative history does not say which path Congress chose, but the open-ended use of 'notwithstanding' in the text suggests it chose the latter. And that suffices to rely on the language of the statute. . . . Of course, the Court is bound to apply the plain language that Congress used. That language has only one unambiguous meaning: when it comes to curing a default in a Chapter 13 plan, the debtor has to include all the amounts required under section 1322(e) '[n]otwithstanding . . . section[ ] 506(b).' 11 U.S.C. § 1322(e). Accordingly, Deutsche Bank's fees and advances, which were allowed under the parties' agreement and applicable nonbankruptcy law, must be included in the cure amount.").

Deutsche Bank Nat'l Trust Co. v. Tucker, 621 F.3d 460, 465 (6th Cir. Sept. 15, 2010) (Sutton, McKeague, Jonker) (Applying plain language of § 1322(e), arrearage claim of undersecured mortgagee includes reasonable fees and costs allowed by contract and nonbankruptcy law. Any conflict between §§ 506(b) and 1322(e) resolves in favor of § 1322(e). Deutsche Bank's claim for arrearage included attorney fees to prepare proof of claim, prior bankruptcy fees, attorney fees for foreclosure, fees for property inspections and escrow advances. Note and mortgage permitted bank to assess those fees and expenses, and reasonableness was not disputed. "The most that can fairly be inferred from this legislative history is that Congress wanted § 1322(e) to overrule [Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (June 7, 1993)]. But Congress could do so in two equally plausible ways: (1) tack on two new requirements for oversecured creditors like the one in Rake, or (2) create a new and broader rule that applies to all secured creditors, whether oversecured or undersecured. The legislative history does not say which path Congress chose, but the open-ended use of 'notwithstanding' in the text suggests it chose the latter. And that suffices to rely on the language of the statute. . . . Of course, the Court is bound to apply the plain language that Congress used. That language has only one unambiguous meaning: when it comes to curing a default in a Chapter 13 plan, the debtor has to include all the amounts required under section 1322(e) '[n]otwithstanding . . . section[ ] 506(b).' 11 U.S.C. § 1322(e). Accordingly, Deutsche Bank's fees and advances, which were allowed under the parties' agreement and applicable nonbankruptcy law, must be included in the cure amount.").

Cain v. Wells Fargo Bank, N.A., (In re Cain), 423 F.3d 617, 619, 620 (6th Cir. Sept. 16, 2005) (Nelson, Batchelder, O'Malley) ("[R]egardless of whether a right of redemption survives the sale under state law," foreclosure sale terminates debtor's right to cure in bankruptcy. The phrase "conducted in accordance with applicable non-bankruptcy law" does not expand the term "foreclosure sale" to include "a state-law redemption period." Under Michigan law, purchaser at foreclosure does not acquire fully "operative" deed until expiration of redemption period, "but a delay in the time when the deed becomes effective simply does not equate to a delay in the time of the sale.").

Oliver v. Bankfirst Fin. Servs. (In re Oliver), No. 08-8053, 2009 WL 394435 (B.A.P. 6th Cir. Feb. 17, 2009) (unpublished) (Fulton, McIvor, Rhodes) (Under Federal Land Bank of Louisville v. Glenn (In re Glenn), 760 F.2d 1428, 1442 (6th Cir. 1985), foreclosure sale after dismissal of first case and before filing of second case cuts off power to reinstate mortgage.).

Oliver v. Bankfirst Fin. Servs. (In re Oliver), No. 08-8053, 2009 WL 394435 (B.A.P. 6th Cir. Feb. 17, 2009) (unpublished) (Fulton, McIvor, Rhodes) (Rule announced in Federal Land Bank of Louisville v. Glenn (In re Glenn), 760 F.2d 1428 (6th Cir. 1985), extends to curing default under § 1322(b)(5) with respect to real property that is not principal residence of debtors; prepetition foreclosure sale precludes curing default through plan.).

Kentucky

Eastern District of Kentucky

In re Parker, 563 B.R. 650, 652-55 (Bankr. E.D. Ky. Jan. 6, 2017) (Schaaf) (Applying Cain v. Wells Fargo Bank, N.A. (In re Cain), 423 F.3d 617 (6th Cir. Sept. 16, 2005) (Nelson, Batchelder, O’Malley), prepetition foreclosure sale cut off power to cure default or to pay mortgage in full through plan notwithstanding that sale was not yet confirmed by state court. “The Sixth Circuit recognized the continuing conflict with the statutory right to cure and determined that § 1322(c)(1) unambiguously sets the date of the foreclosure sale as the cut-off date . . . . Cain makes it clear that the foreclosure sale occurs ‘when the gavel comes down on the last bid . . . .’ . . . Glenn and Cain also make clear that a state law right of redemption has no bearing on whether the Debtor may cure her default pursuant to § 1322(b). . . . Sections 1322(b)(3) and 1322(c) cross-reference each other . . . . So every time § 1322(b)(3) is considered, the Debtor must take into account § 1322(c). . . . Section 1322(e) also does not assist the Debtor’s argument. . . . The Debtor has produced nothing that would suggest § 1322(c) is not applicable when construing § 1322(e). . . . The Debtor argues she can modify the claim to pay the full amount of the debt over the life of the plan pursuant to § 1322(c)(2), despite § 1322(c)(1). . . . Subsections (c)(1) and (c)(2) are separated by the conjunctive ‘and’ . . . . Debtor is required to satisfy both subsection (c)(1) and (c)(2).”).

Western District of Kentucky

In re Woodford, 354 B.R. 153 (Bankr. W.D. Ky. Oct. 15, 2006) (Fulton) (Citing Cain v. Wells Fargo Bank (In re Cain), 423 F.3d 617 (6th Cir. 2005), and Federal Land Bank of Louisville v. Glenn (In re Glenn), 760 F.2d 1428 (6th Cir. 1985), power to cure default under § 1322(c) expired at foreclosure sale on morning of day of petition notwithstanding that under Kentucky law a further step—judicial confirmation of commissioner's report of sale—had not occurred; stay annulled to permit completion of foreclosure process.).

Michigan

Eastern District of Michigan

Hopkins v. Federal Home Loan Corp. (In re Hopkins), No. 13-14757, 2014 WL 922773 (E.D. Mich. Mar. 10, 2014) (Duggan) (Citing Federal Land Bank of Louisville v. Glenn (In re Glenn), 760 F.2d 1428 (6th Cir. Apr. 16, 1985) (Engel, Krupansky, Weick), prepetition sheriff's sale and expiration of redemption period eliminated power to cure default under § 1322(b). Challenge to foreclosure barred by res judicata effect of prepetition state court proceedings.).

Craig-Likely v. Wells Fargo Home Mortgage (In re Craig-Likely), No. 06-13665, 2007 WL 5185289, at *4 (E.D. Mich. Mar. 2, 2007) (unpublished) (Battani) (Mortgagee waived recovery of postpetition arrearages by failing to give notice to debtor of escrow shortages, as required by local rule and Real Estate Settlement Procedures Act.).

Agee v. Fenton Poured Walls, Inc. (In re Agee), 330 B.R. 561 (E.D. Mich. Aug. 12, 2005) (Gadola) (Under Federal Land Bank of Louisville v. Glenn (In re Glenn), 760 F.2d 1428 (6th Cir. 1985), debtor's statutory power to cure default ended at completed prebankruptcy foreclosure sale; stay was properly lifted to allow state court confirmation of sale.).

In re Maike, No. 15-20218-dob, 2015 WL 5776007, at *8 (Bankr. E.D. Mich. Sept. 3, 2015) (Opperman) (Citing Green Tree Acceptance, Inc. v. Hoggle (In re Hoggle), 12 F.3d 1008 (11th Cir. Jan. 11, 1994) (Anderson, Dubina, Godbold), and Mendoza v. Temple-Inland Mortgage Corp. (In re Mendoza), 111 F.3d 1264 (5th Cir. May 12, 1997) (Smith, Parker, Justice), plan can pay attorney fees in advance of mortgage payments and then cure pre- and postpetition mortgage defaults without violating protection from modification in § 1322(b)(2). "[T]he Trustee has sufficient monies on hand to pay the Debtor's attorney fees . . . . Thereafter, . . . United Financial Credit Union will receive . . . its regular monthly payment with the remainder disbursed by the Trustee to cure the defaults, which include both pre-petition and post-petition defaults in payments. . . . [T]hese payments should be sufficient to cure all defaults within the mandatory 60-month period for the Chapter 13 Plan in this case . . . . [T]he curing of these defaults is not an improper modification described in Section 1322(b)(2)."), rev'd, No. 15-cv-13176, 2016 WL 1391855 (E.D. Mich. Apr. 7, 2016) (Ludington).).

In re Johnson, 384 B.R. 763 (Bankr. E.D. Mich. Apr. 9, 2008) (Shefferly) (Section 1322(b)(5) does not permit amortization of arrearage claim extending beyond plan term.).

In re Pickett, 325 B.R. 579 (Bankr. E.D. Mich. June 9, 2005) (Shapero) (Under Michigan's General Property Tax Act, Mich. Comp. Laws Ann. § 211.78(k)(5), debtor's right of redemption terminated 21 days from completed sale; debtor had no interest in property at petition.).

Western District of Michigan

In re Weese, 428 B.R. 380, 385 (Bankr. W.D. Mich. Apr. 28, 2010) (Dales) (Late charges of $7,676.84 are allowable under Michigan law. Ocwen Loan Servicing assessed $107.69 late fee each month. Under Michigan law, when debtor fails to direct how payments are to be applied, mortgage creditor has discretion and may decide to apply payments to oldest debt first. "The result, though perhaps unpalatable given the magnitude of the late fees, is consistent with applicable law.").

Ohio

Northern District of Ohio

In re Best, No. 14-30692, 2014 WL 3700698, at *4 (Bankr. N.D. Ohio July 24, 2014) (Whipple) (Confirmed plan that cured default and maintained payments on residential mortgage precluded creditor's objection that prepetition sheriff's sale cut off debtor's rights when creditor did not object to confirmation. "It is true . . . that a debtor may not provide in her Chapter 13 plan for the cure of a default with respect to a lien on the debtor's principal residence if a foreclosure sale has already occurred. . . . However, because no objection to confirmation was made based upon a foreclosure sale having taken place, this provision does not render Debtor's confirmed Plan unenforceable. . . . As a result of confirmation, the issue raised by the Motion is a § 1327(a) issue and not a § 1322(c)(1) issue.").

Boday v. Franklin Credit Mgmt. Corp. (In re Boday), 397 B.R. 846, 850 (Bankr. N.D. Ohio Oct. 2, 2008) (Speer) (Abrogation of principal holding of Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), by § 1322(e) did not upset Supreme Court's observation that cure provisions of § 1322(b)(5) operate to split secured claims into long term debt and arrearages that must be separately accounted for by creditor. "Section 1322(b)(5), by splitting a claim, means that a creditor is no longer permitted to allocate payments according to the terms of its contract. Instead, its effect is to require that any prepetition arrearage claim must be paid separately, according to the terms of the debtor's confirmed plan, based upon the creditor's allowed claim. The remaining debt, consisting of those payments which become due after the petition is filed, is then paid according to the terms of the parties' contract and original loan amortization as if no default ever existed.").

Boday v. Franklin Credit Mgmt. Corp. (In re Boday), 397 B.R. 846, 851, 850-51 (Bankr. N.D. Ohio Oct. 2, 2008) (Speer) (Mortgage creditor improperly applied on-going contract payments to prepetition interest and other charges and wrongly credited payments to oldest outstanding installment so that debtors were never brought current during plan and note was never cured as required under § 1322(b)(5). "Not only does this accounting fail to adequately take into consideration that the 'cure' provision of § 1322(b)(5) operates so as to split a creditor's secured claim into two separate claims—the underlying debt and the prepetition arrearage—the Defendant's accounting is violative of other aspects of bankruptcy law. First, it goes contrary to the binding effect of the Debtors' confirmed plan of reorganization, whose terms, among other things, provided that the Defendant was required to adjust its record so as to indicate that all arrearages had been paid, and that the amount due should correspond to the Parties' original amortization schedule. Second, to the extent that the Defendant seeks to collect from the Debtors, as a personal liability, funds for which it has not properly accounted, the Defendant is in violation of this Court's order of discharge." "Section 1322(b)(5), by splitting a claim, means that a creditor is no longer permitted to allocate payments according to the terms of its [prepetition] contract. Instead, its effect is to require that any prepetition arrearage claim must be paid separately, according to the terms of the debtor's confirmed plan, based upon the creditor's allowed claim. The remaining debt, consisting of those payments which become due after the petition is filed, is then paid according to the terms of the parties' contract and original loan amortization as if no default ever existed. . . . From an accounting standpoint, this requires that a creditor allocate a debtor's loan payments in the following manner: First, the creditor must apply the arrearage payments it receives during the plan's duration in accordance with the terms of the plan, so that upon completion of the plan the debtor is deemed current on the prepetition amortization schedule. . . . Second, payments received from the debtor to service those payments which contractually accrue postpetition, must be allocated according to the terms of the parties' contract as if no default had occurred. . . . Creditors who adopt accounting procedures contrary to this method can be held liable for damages suffered by the debtor." Creditor is ordered to adjust its records to show debtors are current and that arrearages have been paid in plan.).

In re Dean, 360 B.R. 750 (Bankr. N.D. Ohio Nov. 21, 2006) (Speer) (Although debtor presented no evidence to overcome prima facie validity of mortgage holder's arrearage claim, bankruptcy court "in the interests of equity" reduced late charges to reflect 11 late payments, not 18 and court eliminated $170 "Broker Price Opinion" fee together with a $47.10 charge for property inspection because these charges were "unreasonable and unsubstantiated.").

Southern District of Ohio

Chase Manhattan Mortgage Corp. v. Tudor, No. 2:06cv26, 2007 WL 4322187, at *8 (S.D. Ohio Dec. 7, 2007) (unpublished) (Watson) (Applying Miller v. Kyle, 85 Ohio St. 186 (1911), "default-based attorney fee provisions were not the product of free understanding and negotiation between parties of equal bargaining power and similar sophistication. Accordingly, the Court holds that Miller is applicable and operates to void the Mortgage's default-based attorney fee provisions.").

In re Joslin, 544 B.R. 877, 881-82 (Bankr. S.D. Ohio Jan. 25, 2016) (Buchanan) (Because curing default and maintaining payments under § 1325(a)(5) is not the same as "contractual mortgage reinstatement," mortgagee has no enforceable contract right to attorney fees under Ohio law for § 1322(e) purposes. "[C]ontractual reinstatement requires a debtor to pay the full arrearage immediately while the statutory remedy under the Bankruptcy Code allows a debtor to cure any default over a reasonable period of time. . . . The Debtor in this case elected to pursue his bankruptcy right to cure and maintain his mortgage under § 1322(b)(5) and not under the Restatement Provision in his Mortgage. Accordingly, the Restatement Provision does not provide a basis for Sharefax's claim for attorney fees as part of its prepetition arrearage claim because it is not operative in this case. . . . Sharefax has not met the two-part requirement of § 1322(e)[.]").

In re McLemore, 426 B.R. 728, 745-46 (Bankr. S.D. Ohio Mar. 30, 2010) (Humphrey) (Holder of Ohio Real Estate Tax Certificate was entitled to reasonable prepetition foreclosure attorney fees and costs as part of § 502 claim, but "real estate tax claim does not fall within the purview of § 1322(e). . . . First, § 1322(e) sets forth how the amount necessary to cure a default that may be cured under § 1322(b)(5) is determined. . . . Second, § 1322(e) references § 1322(b)(2). Section 1322(b)(2) prohibits modification of holders of claims secured by a security interest in a debtor's principal residence. . . . Third, § 1322(e) addresses the curing of defaults in a plan." Legislative history to § 1322(e) supports view that when debt matured prepetition, such as with purchase of tax certificates, curing under § 1322(b)(3) and (5) does not apply.).

In re Thompson, 420 B.R. 763 (Bankr. S.D. Ohio Dec. 14, 2009) (Humphrey) (Title insurance premium incurred by mortgagee as part of prepetition foreclosure action was included in arrearage claim under § 1322(e) when mortgage provided for payment of costs of title evidence. Section 1322(e) does not require that expense be necessary to be recoverable, only that expense is reasonable, and $171 for title insurance was reasonable.).

In re Peppers, 397 B.R. 880, 882 (Bankr. S.D. Ohio Nov. 18, 2008) (Hopkins) (When debtor cures arrearage on mortgage that is protected from modification, debtor cannot use § 506(a) in conjunction with § 1322(e) to pay only value of collateral. Property was worth $71,000. Arrearage was $19,087 and balance of mortgage was $66,821. Debtor conceded that curing default required paying arrearage in full but contended that only $4,178 of arrearage claim was secured. "[Section] 506(a) is relevant only to the initial determination of whether the mortgagee is protected by § 1322(b)(2). Thereafter, § 506(a) is inapplicable to the cure of an arrearage under § 1322(b)(5) and § 1322(e). Instead, the express terms of § 1322(e) govern the cure." Curing mortgage default is accomplished under § 1322(b)(5), not under § 1322(b)(3). ).).

In re Thompson, 372 B.R. 860, 863 (Bankr. S.D. Ohio Aug. 9, 2007) (Walter) (Section 1322(e) trumps § 506(b) "so that even an undersecured creditor may add interest, costs, and fees to its arrearage claim if that creditor otherwise meets the requirements of § 1322(e)." Debtor objected to advances and costs included in arrearage, asserting AMC was undersecured. Adopting majority position court finds no reason to look behind § 1322(e)'s plain language.).

In re Evans, 336 B.R. 749, 752, 754, 755, 756 (Bankr. S.D. Ohio Jan. 20, 2006) (Aug) (Section 1322(e) only defines cure amount for oversecured claims under § 506(b). Finding meaning of § 1322(e) to be "far from plain and clear," term "notwithstanding" could mean either that "in spite of the fact that the creditor meets the requirements of § 506(b) with respect to its secured claim, that creditor must also meet the state law requirements of § 1322(e)," or it could mean that "we ignore the fact that the creditor does not meet the requirements of § 506(b), and the amount to cure the creditor's arrearage only needs to be included in the agreement between the parties and allowed by state law." Looking to legislative history and that § 1322(e) was added to address Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993), appropriate analysis of §§ 1322(e) and 506(b) is "[n]otwithstanding the fact that the creditor has met the requirements of § 506(b), entitling it to secured status for its claim for attorney fees or other expenses, when determining the amount required to cure a default, the creditor must also show that such expenses meet the additional requirement of § 1322(e) that such fees and expenses are permitted by state law." Section 506(b) applies only between petition and confirmation, and creditor is entitled to attorney's fees in its arrearage claim under that section only if oversecured. Fees and charges incurred after confirmation are not part of arrearage claim since "those amounts were not incurred or known at the time the plan was confirmed." Creditor may have unsecured claim for fees and charges that are not part of its arrearage or secured claim. If oversecured creditor meets requirement of § 506(b), it still may not be entitled to its attorney's fees as part of arrearage claim if state law does not allow it. "[C]ase law in Ohio is very clear that attorney fee provisions in a mortgage contract are void and unenforceable as contrary to public policy.").

In re Evans, 336 B.R. 749, 752, 754, 755, 756 (Bankr. S.D. Ohio Jan. 20, 2006) (Aug) (Oversecured creditor that meets requirements of § 506(b) is not entitled to attorney's fees as part of arrearage claim because Ohio law does not allow it. "[C]ase law in Ohio is very clear that attorney fee provisions in a mortgage contract are void and unenforceable as contrary to public policy." Because cure of mortgage default under § 1322(b)(3) is not equivalent to mortgage reinstatement, creditor is not entitled to attorney's fees under Ohio law that permits a mortgagee to assess attorney fees at reinstatement. Appropriate analysis of §§ 1322(e) and 506(b) is "[n]otwithstanding the fact that the creditor has met the requirements of § 506(b), entitling it to secured status for its claim for attorney fees or other expenses, when determining the amount required to cure a default, the creditor must also show that such expenses meet the additional requirement of § 1322(e) that such fees and expenses are permitted by state law. Recognizing that § 506(b) applies only to time period between petition and confirmation, only oversecured creditor may include claim for attorney fees in its arrearage claim. Fees and charges incurred after confirmation are not part of arrearage claim since "those amounts were not incurred or known at the time the plan was confirmed." Creditor may have unsecured claim for fees and charges that is not part of its arrearage or secured claim.).

In re Tudor, 342 B.R. 540, 550-68 (Bankr. S.D. Ohio Dec. 9, 2005) (Hoffman) (Section 1322(e) trumps § 506(b) to determine entitlement of oversecured mortgage holder to attorney's fees and costs as part of its arrearage claim; because § 1322(e) requires both a contractual entitlement and supporting state law, Ohio mortgage holder cannot recover attorney's fees as part of an arrearage claim because Ohio common law prohibits that recovery and mortgage cure through a Chapter 13 plan is not reinstatement for purposes of an exception to the common law rule. "[Section] 1322(e) expressly trumps § 506(b) and makes state law, rather than a creditor's oversecured status, determinative of the creditor's right to recover postpetition attorney fees as part of an arrearage claim. . . . [Section] 1322(e)'s application is not restricted to the interest component of an arrearage claim; it extends to attorney fees and other costs as well. . . . Chase's contention that § 506(b) mandates its recovery of Postpetition Fees simply 'ignores the plain language of 11 U.S.C. § 1322(e) which begins, "[n]othwithstanding . . . section 506(b) . . . of this title," and states that the amount necessary to cure the arrears under a Chapter 13 plan is determined in accordance with both the underlying agreement and nonbankruptcy law.'").

In re Tudor, 342 B.R. 540, 544-71 (Bankr. S.D. Ohio Dec. 9, 2005) (Hoffman) (Section 1322(e) prohibits recovery of attorney's fees and costs as components of an arrearage claim if not provided for by contract or prohibited by state law; common law of Ohio prohibits recovery of attorney's fees in a noncommercial mortgage transaction and reinstatement exception to that rule does not apply to curing default in a Chapter 13 case; in contrast, Ohio law permits recovery of foreclosure costs and § 1322(e) would allow recovery of those costs. "Chase's recovery of [attorney's fees] is . . . barred by Ohio common law . . . . [C]ontractual provisions in debt instruments calling for the payment of attorney fees upon a borrower's default are contrary to public policy and unenforceable. . . . Because cure of a mortgage arrearage through a Chapter 13 plan does not constitute a contractual mortgage reinstatement, the reinstatement exception to the Common Law Rule is not applicable in this case. . . . [Section] 1322(e) expressly trumps § 506(b) and makes state law, rather than a creditor's oversecured status, determinative of the creditor's right to recover postpetition attorney fees as part of an arrearage claim. . . . Ohio courts have long held that contractual provisions in mortgages and certain other debt instruments stipulating that a defaulting borrower is responsible for the lender's attorney fees are unenforceable. . . . Because contractual mortgage reinstatement and the Chapter 13 cure remedy are not one and the same, the reinstatement exception to the Common Law Rule . . . does not provide a basis for Chase to recover the Fees. . . . Ohio law permits '[a] mortgagee, as a general rule, . . . [to recover] . . . the costs of an action to foreclose.' . . . The Mortgage grants Chase a contractual right to recover the Costs, and their recovery is not prohibited by Ohio law.").

Tennessee

Eastern District of Tennessee

In re Simoukdalay, 557 B.R. 597 (Bankr. E.D. Tenn. Sept. 2, 2016) (Rucker) (On reconsideration, costs of mortgage modification were not “costs of collection” within meaning of note and deed of trust. Attorney fees for preparation of proof of claim and participation in bankruptcy were allowable fees. Federal law determines the reasonableness of fees under § 506(a). Applying In re Scarlet Hotels, LLC, 392 B.R. 698 (B.A.P. 6th Cir. Aug. 22, 2008) (Fulton, McIvor, Shea-Stonum), adjustments were necessary based on careful reading of fee applications, including adjustments for duplication, differences in experience and the need to reconstruct accounting in order file attachments.).

Bryant v. Hamilton Cnty. (In re Bryant), 548 B.R. 239, 241-46 (Bankr. E.D. Tenn. Apr. 5, 2016) (Whittenburg) (Extension of time in § 108(b) is available to Chapter 13 debtors and extends state law period within which debtor can redeem real property from a tax sale. Debtor's property sold at a tax sale on June 5, 2014. Chapter 13 case was filed on June 4, 2015. Debtor tendered check for full payment of tax debt on July 31, 2015. Tennessee law provides a one-year right of redemption from a tax sale. "The tax sale decree constitutes an order entered in a nonbankruptcy proceeding . . . that fixed a period within which the debtor may 'cure a default, or perform any similar act.' . . . [T]he redemption period would have expired less than sixty days after the order for relief . . . . As the chapter 13 debtor is given the rights and powers of a trustee over property of the estate by virtue of § 1303 and the right of redemption constitutes property of the estate, the extension of time to exercise that right afforded to a trustee by § 108(b) is available to the chapter 13 debtor just as it is available to the chapter 11 debtor in possession. . . . [Section] 108(b) of the Bankruptcy Code extends the time for the debtor in a chapter 13 case to redeem property from a tax sale.").

In re Comer, No. 13-12148, 2014 WL 917485 (Bankr. E.D. Tenn. Mar. 10, 2014) (Rucker) (Prepetition foreclosure sale and delivery of trustee's deed cut off power to cure default under § 1322(c)(1); confirmation of plan that cured default and maintained payments did not reinstate mortgage. Foreclosing creditor that bid on property at prepetition sale did not need relief from stay because property was not property of the estate. Recording trustee's deed postpetition did not violate stay. Foreclosing creditor granted relief from stay to remove debtor from property.).

In re Toney, 349 B.R. 516 (Bankr. E.D. Tenn. Sept. 7, 2006) (Cook) (Prepetition foreclosure sale and delivery of trustee's deed cut off power to cure default under § 1322(c)(1); confirmation of plan cannot resurrect the mortgage. Foreclosing creditor that bid on property at prepetition sale is entitled to relief from stay.).

Middle District of Tennessee

In re Beaudet, 455 B.R. 671 (Bankr. M.D. Tenn. Apr. 13, 2011) (Harrison) (Escrow shortage was part of prepetition claim, which could not be included in ongoing mortgage payments by increasing postpetition monthly escrow to make up for prepetition shortage. Agreeing with Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. Oct. 13, 2008) (Higginbotham, Stewart and Southwick), and In re Rodriguez, 629 F.3d 136 (3d Cir. Dec. 23, 2010) (Sloviter, Barry, Smith), postpetition escrow may be increased to cover future escrow requirements, but postpetition monthly payment must be reduced by excluding prepetition escrow shortage.).

In re Beaudet, 455 B.R. 671 (Bankr. M.D. Tenn. Apr. 13, 2011) (Harrison) (Agreeing with Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. Oct. 13, 2008) (Higginbotham, Stewart and Southwick), and In re Rodriguez, 629 F.3d 136 (3d Cir. Dec. 23, 2010) (Sloviter, Barry, Smith), escrow shortage was part of mortgagee's prepetition claim. Escrow shortage was not appropriately recovered by increasing ongoing mortgage payments by increasing postpetition monthly escrow. Postpetition escrow may be increased to cover future escrow requirements, but postpetition monthly payment must exclude prepetition escrow shortage.).

Western District of Tennessee

In re Love, 353 B.R. 216, 222-23 (Bankr. W.D. Tenn. Oct. 31, 2006) (Kennedy) (Applying In re Cain, 423 F.3d 617 (6th Cir. 2005), nonjudicial foreclosure sale was not completed before petition when sale was orally cried out two days before petition but Tennessee statute of frauds was not satisfied until after petition. On day of nonjudicial foreclosure sale, written memorandum of sale was signed by attorney crying out sale. Substitute trustee's deed was executed after Chapter 13 petition. "It has been well established and settled for many years in Tennessee that the statute of frauds must be satisfied before a foreclosure sale is deemed final and a binding contract exists. . . . [T]o satisfy the statute of frauds, a writing must be signed by the party to be charged and . . . the party to be charged is the party against whom enforcement of the contract is sought. The memorandum of sale here could not rise to the level of a binding contract for the sale of real property for this reason: no one other than the attorney who orally cried out the sale signed the document.").

G.  Seventh Circuit

Illinois

Central District of Illinois

In re Harris, No. 11-82633, 2012 WL 1410264 (Bankr. C.D. Ill. Apr. 23, 2012) (Perkins) (Mortgage creditor may not collect prepetition advance to pay delinquent real estate taxes by increasing mortgage payments postpetition; advance may be cured as part of prepetition arrearage. Applying Campbell v. Countrywide Home Loans, Inc., 545 F.3d 348 (5th Cir. Oct. 13, 2008) (Higginbotham, Stewart, Southwick), and In re Rodriguez, 629 F.3d 136 (3d Cir. Dec. 23, 2010) (Sloviter, Barry, Smith), debtor's contractual obligation to make tax escrow payments sufficiently supported that tax advance was prepetition claim for reimbursement.).

In re Covemaker, No. 10-83747, 2011 WL 2020856, at *1 (Bankr. C.D. Ill. May 23, 2011) (Perkins) (One-third of $1,100 flat fee agreed to between mortgage creditor and its attorney was reasonable for purposes of § 1322(e). "While law firms are free to negotiate the most favorable fee payment schedule that they can with their clients, the question of reasonableness under section 1322(e) is a separate issue. The issue in bankruptcy is limited to the proportion of the flat fee that may be reasonably charged to a Chapter 13 debtor, and in effect his unsecured creditors, under section 1322(e). This issue is controlled by the lodestar analysis, not the peculiarity of the fee payment agreement reached between a particular mortgagee with a particular law firm. A law firm could have an agreement with a mortgagee or servicer that the flat fee is earned in full when the complaint is filed, but that doesn't make it reasonable to charge the borrower (or creditors) the full amount when only a small portion of the work is performed.").

In re Rehberg, No. 07-90480, 2007 WL 2048663 (Bankr. C.D. Ill. July 16, 2007) (unpublished) (Fines) (Rights to redeem, pay arrearages and pay mortgage in plan were terminated by prepetition foreclosure sale, under Colon v. Option One Mortgage Corp., 319 F.3d 912 (7th Cir. 2003).).

In re Whitlow, No. 06-80329, 2007 WL 1087442 (Bankr. C.D. Ill. Apr. 4, 2007) (unpublished) (Perkins) (While $412 for serving three defendants in prepetition foreclosure is at high end, it is not unreasonable.).

In re McKinney, 341 B.R. 892, 897-901 (Bankr. C.D. Ill. May 17, 2006) (Perkins) (Because Illinois sale of delinquent real estate taxes does not reduce the debtor's fee simple ownership of real property until the period of redemption expires and a tax deed is delivered to the purchaser, when the debtor files a Chapter 13 case before delivery of the tax deed, the default that lead to the tax sale can be managed through the Chapter 13 plan—treated as a nonrecourse secured claim. "[W]hen a bankruptcy petition is filed prior to expiration of the redemption period, what becomes property of the estate is the entire fee interest owned by the debtor to the same extent as if no tax sale had occurred. . . . [T]he postpetition expiration of the right to redeem does not divest the debtor or the estate of any property interest. . . . [I]f bankruptcy is filed after the redemption period expires but before a tax deed issues, the owner's interest becomes property of the estate to the same extent as if the petition was filed during the redemption period, except that the right of redemption itself, a discrete asset, does not enter the estate. . . . One of the rights accorded a tax buyer under Illinois law is the right to be paid in full before the redemption period expires. Under the combination of Sections 1322(b)(2) and 1325(a)(5), . . . in agreement with the reasoning in [In re Bates, 270 B.R. 455 (Bankr. N.D. Ill. 2001)], that right may be modified in a Chapter 13 plan to allow the claim to be paid over the term of the plan. . . . A Chapter 13 debtor doesn't need Section 108(b) because he is not exercising the right to redeem under state law. Instead, the debtor is exercising a right accorded by federal bankruptcy law, which preempts contrary state law.").

Northern District of Illinois

French v. BMO Harris Bank, N.A., No. 12 C 1896, 2012 WL 1533310 (N.D. Ill. Apr. 30, 2012) (unpublished) (St. Eve) (Due-on-sale clause may be limited by Garn-St. Germain Act: debtor who acquired residence from estate of deceased aunt may have federal right to manage debt through Chapter 13 plan.).

Snowden v. Litton Loan Servicing, Inc., 356 B.R. 429 (N.D. Ill. Dec. 1, 2006) (Kennelly) (Section 1322(c)(1) did not give debtor right to cure a mortgage that had been foreclosed prepetition, citing Colon v. Option One Mortgage Corp., 319 F.3d 912 (7th Cir. 2002).).

In re McKenith, 428 B.R. 462 (Bankr. N.D. Ill. Feb. 2, 2010) (Schmetterer) (After prepetition foreclosure on nonresidential real property, Illinois debtor had no special right to redeem; but, assuming some right to redemption existed, it expired no later than 60 days after petition as extended by § 108(b).).

In re Redmond, 380 B.R. 179 (Bankr. N.D. Ill. Dec. 20, 2007) (Wedoff) (Dispute about amount of balloon note is state law question under § 1322(e); debtor fails to state cause to reopen eight years after discharge, since remedies are available in state courts.).

In re Tewell, 355 B.R. 674, 681-82 (Bankr. N.D. Ill. Oct. 23, 2006) (Squires) (Plan cannot cure default and maintain payments when quitclaim deed to debtor violated due-on-sale clause and debtor is not personally liable to mortgage holder. "[D]ue on sale clauses are valid in Illinois . . . . To allow Chapter 13 debtors to effectively ignore due-on-sale clauses invoked by holders of home mortgages stretches the language of § 1322(b)(2) past the breaking point. . . . ['C]ure' here would require restoring full title to Almaraz, the original mortgagor. . . . [S]uch a 'cure would be fruitless because the automatic stay would not apply to a debtor without title to the mortgaged property or personal liability on the debt.' . . . [T]here can be no cure vis-a-vis the Debtor—the mortgagor here was Almaraz, not the Debtor. . . . [N]ot enforcing the due-on-sale clause when invoked by the holder would impermissibly modify the Creditor's rights in violation of § 1322(b)(2).").

Snowden v. Litton Loan Servicing, Inc. (In re Snowden), 352 B.R. 848 (Bankr. N.D. Ill. Oct. 11, 2006) (Schmetterer) (Section 1322(c)(1) did not upset holding in Goldberg v. Tynan, 773 F.2d 177 (7th Cir. 1985), that under Illinois law, only statutory right of redemption passes into Chapter 13 estate when petition is filed after foreclosure sale but before expiration of special right of redemption; although Litton misrepresented that third party bought property at foreclosure sale and thus debtor did not discover special redemption right under Illinois law until after it expired, debtor not entitled to injunction or to vacate orders allowing Litton to dispossess debtor.).

In re Snowden, 345 B.R. 607, 613 (Bankr. N.D. Ill. Apr. 14, 2006) (Schmetterer) (Applying Colon v. Option One, 319 F.3d 912 (7th Cir. 2003), and Goldberg v. Tynan, 773 F.2d 177 (7th Cir. 1985), debtor cannot cure default with respect to home mortgage when Illinois foreclosure sale occurred before petition, mortgagor bought in property, debtor had only special right to redeem within 30 days after judicial confirmation of foreclosure sale and 30-day period as extended by § 108 expired during Chapter 13 case. "[T]he only asset that passes into a bankruptcy estate when a mortgagor files a Chapter 13 petition prior to the expiration of a redemption right is the statutory right of redemption. . . . Unless this right is exercised within the statutory time limits imposed by Bankruptcy Code section 108(b), the debtor loses whatever right he may have to redeem the property . . . . [S]ection 1322(c)(1) of the Bankruptcy Code does not permit a debtor to toll the redemption period for the life of a Chapter 13 plan.").

In re Brooks, 324 B.R. 56 (Bankr. N.D. Ill. Mar. 30, 2005) (Cox) ("Consent foreclosure" agreement before petition cut off the debtors' rights to cure the default under Chapter 13.).

In re Wilson, 321 B.R. 222, 226-28 (Bankr. N.D. Ill. Feb. 25, 2005) (Hollis) (Procedures in model Chapter 13 plan for determining prepetition arrearage and requiring mortgage holders to file statement of postpetition fees, charges and other obligations arising during Chapter 13 case do not impermissibly modify rights of mortgage holder for purposes of § 1322(b)(2). Model Chapter 13 plan for Northern District of Illinois provides that if debtor pays prepetition cure amount, mortgage is reinstated according to its original terms and the mortgage holder's right to recover prepetition arrearages is extinguished. Also, 30 days before final payment under plan, standing trustee serves on mortgage holder a notice that cure amount has been paid and all prepetition mortgage obligations have been resolved. Mortgage holder then must file statement of any postpetition defaults and debtor has opportunity to dispute statement and to modify plan to pay additional amounts. "The Model Plan provisions were adopted to reduce the number of foreclosures filed against debtors immediately following the conclusion of their Chapter 13 case. . . . By providing a procedure for the parties to use to definitely ascertain what a debtor owes his home lender, the Model Plan does not modify a mortgage holder's rights in violation of § 1322(b)(2). Instead, it merely provides a framework within which to enforce those rights according to the loan document terms. [The Model Plan] does not modify the mortgage holder's right to charge late fees, attorneys' fees, or assess other collection costs as provided in the contractual agreement between the creditor and the debtor. . . . The Model Plan simply discourages a home lender from surprising a debtor with a foreclosure action immediately following the Chapter 13 case based on the default that existed at or before the end of the bankruptcy. What appears to trouble GMAC is that the Model Plan affirms that the bankruptcy court—not GMAC—is the adjudicator of disputes under the loan documents during the Chapter 13 case. . . . The majority of courts agree that since § 1322(b)(5) allows the cure of any default, a debtor can modify his plan under § 1329 to cure postconfirmation defaults, so long as the curing is done within a reasonable period of time and while current payments are being maintained. . . . [P]lan provisions that supply a way to cure postpetition defaults under § 1322(b)(5) do not violate § 1322(b)(2).").

In re Wilson, 321 B.R. 222, 224, 225, 227 (Bankr. N.D. Ill. Feb. 25, 2005) (Hollis) (It does not impermissibly modify the rights of a creditor secured in the debtor's residence to include in the district's model plan a provision requiring a mortgagee, upon notification by the trustee that the prepetition arrearage had been cured, to either treat the mortgage as reinstated and fully current or itemize all outstanding obligations due as of the date of the notice. In the Northern District of Illinois, the plan form required a mortgagee to either treat a mortgage as reinstated and fully current or itemize all outstanding payment obligations when notified by the trustee, thus giving the debtor the opportunity to object to any alleged discrepancy. If the mortgagee failed to respond, the mortgage would be treated as reinstated according to its original terms. GMAC Mortgage objected to this provision, arguing that it modified their rights in violation of § 1322(b)(2). The provisions of the model plan "provide a mechanism for resolving disputes over the accrual of postpetition charges assessed by a mortgage holder while the Chapter 13 case is pending. Without such a procedure, the lender may not inform the debtor of the charges, in order to avoid violating the automatic stay. . . . [The model plan] does not modify the mortgage holder's right to charge late fees, attorneys' fees, or assess other collection costs as provided in the contractual agreement between the creditor and the debtor. Instead, under the Model Plan, once the Chapter 13 trustee distributes the final payment of the arrearage cure amount, he must notify the mortgage holder that any fees and costs permitted under the loan documents, which accrued during the Chapter 13 case, must be itemized within 60 days or forfeited. . . . It is proper for the Chapter 13 Model Plan to provide this mechanism for fixing the amount of the mortgagee's postpetition attorneys' fees." The use of the model plan provisions gives the debtor certainty regarding the amount of any postpetition faults, and it "does not reduce the size or timing of installment payments under the plan or under the mortgage; instead, it is a provision that provides a mechanism for the debtor to cure any defaults, as plans may do pursuant to § 1322(b)(5).").

Indiana

Southern District of Indiana

Leonard v. Halifax Fin. Grp., LP (In re Leonard), No. 12-59031, 2013 WL 2237520 (Bankr. S.D. Ind. Jan. 3, 2013) (Coachys) (Plan can redeem property sold at prepetition tax sale but must pay appropriate interest rate and pay full amount of redemption claim.).

In re Collins, No. 03-10138-JKC-13, 2003 WL 25321292 (Bankr. S.D. Ind. July 17, 2003) (unpublished) (Coachys) (Under Ind. Code § 32-29-7-7, a sheriff's sale "is complete when the hammer falls"; debtors who waited until after sale to file Chapter 13 may not reinstate mortgage.).

Wisconsin

Eastern District of Wisconsin

Ruhl v. HSBC Mortgage Servs., Inc., 399 B.R. 49 (E.D. Wis. Dec. 23, 2008) (Adelman) (Confirmed plan that pays interest on cure of mortgage defaults precludes modification that eliminates interest based on § 1322(e). Without reaching issue whether § 1322(e) is mandatory, binding effect of confirmation and prior positions taken by debtors preclude argument that interest was not required.), aff'g, 394 B.R. 469 (Bankr. E.D. Wis. 2008).).

Herrera v. JPMorgan Chase Bank NA (In re Herrera), 369 B.R. 395 (E.D. Wis. May 16, 2007) (Stadtmueller) (Debtors are not required to first move for reconsideration of claims allowances before seeking disgorgement of alleged overpayments.), rev'g Case v. Wells Fargo Bank, NA, 359 B.R. 709 (Bankr. E.D. Wis. 2006) (Debtors had standing to pursue causes of action on behalf of bankruptcy estates for disgorgement of interest overpaid under §§ 502(j) and 1322(e), but adversary proceedings are dismissed with direction that debtors must first proceed under Rule 3008 for reconsideration of claims allowances.).

Patterson v. Homecomings Fin., LLC (In re Patterson), 444 B.R. 564 (Bankr. E.D. Wis. Feb. 23, 2011) (Kelley) (Although § 1322(e) provides that amount necessary to cure default will be determined by contract and nonbankruptcy law, Bankruptcy Rule 2016 still requires disclosure of fees payable from Chapter 13 estate. Decisions are split with respect to whether § 506(b) required mortgage lender to seek court approval before charging postpetition attorney fees to account. Complaint alleging that creditor improperly assessed and collected postpetition, preconfirmation attorney charges without court approval stated cause of action.).

Patterson v. Homecomings Fin., LLC (In re Patterson), 444 B.R. 564 (Bankr. E.D. Wis. Feb. 23, 2011) (Kelley) (Complaint alleging that mortgage creditor improperly assessed postpetition, preconfirmation attorney fees without court approval stated cause of action. Decisions are split with respect to whether § 506(b) required mortgage lender to seek court approval before charging postpetition attorney fees to account. Although § 1322(e) provides that amount necessary to cure default will be determined under contract and nonbankruptcy law, Bankruptcy Rule 2016 still requires disclosure of fees payable from Chapter 13 estate.).

In re Eiler, 390 B.R. 920 (Bankr. E.D. Wis. May 14, 2008) (McGarity) (Reaffirmation agreement in prior Chapter 7 case is strictly construed to include all arrearages, attorney fees and costs; mortgagee sanctioned for violating discharge injunction by attempting to collect in excess of reaffirmed amount. Sanction is disallowance of fees and costs incurred subsequent to Chapter 7 discharge.).

Case v. Wells Fargo Bank, NA (In re Case), 394 B.R. 469 (Bankr. E.D. Wis. Mar. 19, 2008) (Shapiro) (Debtors are bound by res judicata effect of confirmed plans that provided for payment of interest on interest, even though in conflict with § 1322(e); that section is discretionary rather than mandatory.).

Western District of Wisconsin

McCarthy v. Nekoosa Port Edwards State Bank, No. 13-cv-0092-wmc, 2013 WL 3942185 (W.D. Wis. July 30, 2013) (Conley) (Mortgage holder entitled to attorney fees under its contract for protecting and enforcing its lien during foreclosure action and in bankruptcy case. Fees measured against standard of commercial reasonableness.).

In re Wirth, 503 B.R. 800, 802-03 (Bankr. W.D. Wis. Oct. 29, 2013) (Martin) (Supplemental claim for attorney fees incurred postconfirmation disallowed because they resulted from creditor's prior insufficient itemization of fees and not as a result of debtor's default under mortgage. "By enacting 11 U.S.C. § 1322(e), Congress added as a requirement for the allowance of postpetition attorney's fees that they be an element of curing default. [Under § 1322(e)] 'if it is proposed in a plan to cure a default, the amount necessary to cure the default, shall be determined in accordance with the underlying agreement and applicable nonbankruptcy law.' . . . 'Failure of either condition—the absence of a contract provision or a prohibition under applicable nonbankruptcy law—will defeat recovery of attorney fees . . . as an element of curing default.' . . . The attorney's fees in this case resulted from the creditor's prior insufficient itemization of attorney's fees. While the debtor's default was the reason for the need of detailed itemization of 'the time spent and the nature of each discrete task performed,' the debtor was not responsible for [creditor's] lack of diligence in preparing its claim for attorney's fees.").

In re Wirth, 503 B.R. 800, 802-03 (Bankr. W.D. Wis. Oct. 29, 2013) (Martin) (Supplemental claim for attorney fees incurred postconfirmation disallowed because they resulted from creditor's prior insufficient itemization of fees and not as a result of debtor's default under mortgage. Oversecured creditor is allowed attorney fees under § 506(b) "'only from the date of filing through the confirmation date.' . . . '[A]fter confirmation, the creditors' rights to costs and fees are solely through the plan . . . .' . . . The one exception to this rule is a claim secured only by security interest in real property that is the debtor's principal residence. . . . Such claims are protected from modification under § 1322(b)(2). . . . If the underlying contract requires the debtor to pay attorney's fees, that contractual right cannot be modified by the Chapter 13 plan. . . . By enacting 11 U.S.C. § 1322(e), Congress added as a requirement for the allowance of postpetition attorney's fees that they be an element of curing default. [Under § 1322(e)] 'if it is proposed in a plan to cure a default, the amount necessary to cure the default, shall be determined in accordance with the underlying agreement and applicable nonbankruptcy law.' . . . 'Failure of either condition—the absence of a contract provision or a prohibition under applicable nonbankruptcy law—will defeat recovery of attorney fees . . . as an element of curing default.' . . . The attorney's fees in this case resulted from the creditor's prior insufficient itemization of attorney's fees. While the debtor's default was the reason for the need of detailed itemization of 'the time spent and the nature of each discrete task performed,' the debtor was not responsible for [creditor's] lack of diligence in preparing its claim for attorney's fees.").

In re Singer, 469 B.R. 293 (Bankr. W.D. Wis. Mar. 15, 2012) (Utschig) (When prepetition forbearance agreement reduced ongoing payments for six months without describing how arrearage in forbearance period would be calculated, mortgage arrearage claim could not include unpaid portions of payments during forbearance period.).

In re Holmdahl, 439 B.R. 876 (Bankr. W.D. Wis. Nov. 3, 2010) (Utschig) (When property had been foreclosed prepetition but second mortgage creditor buying at foreclosure did not pay balance of bid funds, debtors could cure prepetition default through plan; $27,250 down payment forfeited by second mortgage creditor was applied to prepetition arrearages. Debtors could not dictate that forfeited funds be applied to reduce principal.).

H.  Eighth Circuit

Olsen v. Habitat for Humanity (In re Olsen), 363 B.R. 908, 910-11 (B.A.P. 8th Cir. Mar. 9, 2007) (Kressel, Schermer, Venters) (When debtor owed two notes to Habitat for Humanity, one of which became due in full before the petition only because of default under other note, debtor can use § 1322(b)(5) to cure default with respect to one note, undoing default under the other. "Curing a default returns the situation to pre-default conditions and nullifies the consequences of that default. . . . According to the provision in Note 2, the amount due on Note 2 became fixed when the debtor defaulted on Note 1. However, Section 1322(b)(5) allows the debtor to cure the default on Note 1, return it to its status prior to the default and consequently 'unfix' the amount due under Note 2.").

Arkansas

Eastern District of Arkansas

In re Ausburn, 524 B.R. 816, 820-24 (Bankr. E.D. Ark. Feb. 20, 2015) (Taylor) (Section 1322(c) established federal bankruptcy right to cure mortgage default until foreclosure sale notwithstanding contractual waiver of equitable and statutory rights of redemption under state law; foreclosure sale after the petition violated automatic stay because power to cure default did not terminate before the petition. "[T]he debtors' equitable right to redeem the property terminated [prepetition] . . . . The debtors admit that they waived their statutory right of redemption in their mortgage . . . . [B]y state law, the debtors did not possess any legal or equitable interest in their home because their statutory and equitable rights of redemption terminated prepetition. . . . Section 1322 of the Code . . . represents such an exercise of Congress's authority in relation to debtors' state law property rights. . . . Congress adopted subsection (c)(1) in 1994 'to resolve th[e] confusion and [to] create a uniform standard' as to when a debtor's right to cure terminated. . . . Congress clearly intended that section 1322(c) would preempt state law and create a federal right to cure that only terminates upon a foreclosure sale. . . . Although FSB correctly asserts and the debtors concur that their statutory and equitable rights of redemption under Arkansas property law terminated prepetition, the debtors' federal right to cure the default on their home, pursuant to 11 U.S.C. § 1322(c)(1), did not terminate until the property was 'sold at a foreclosure sale.' . . . Relying on either the gavel rule or the sold rule, the debtors' home was 'sold at a foreclosure sale' postpetition—the commissioner's sale occurred one day after the debtors' filed bankruptcy and the order confirming the sale was signed thirteen days postpetition. . . . FSB violated the automatic stay imposed by 11 U.S.C. § 362 in proceeding with the commissioner's sale postpetition.").

In re Johnson, 460 B.R. 234 (Bankr. E.D. Ark. Sept. 28, 2011) (Evans) (Foreclosure fees and costs could not be included in cure amount because, at time Chase Home Finance and JP Morgan Chase Bank initiated nonjudicial foreclosure, they were not authorized to do business in Arkansas, a requirement of Statutory Foreclosure Act. Debtors awarded attorney fees for resisting lenders' objection to confirmation.), rev'd, 470 B.R. 829 (E.D. Ark. May 11, 2012) (Holmes).).

In re Jenkins, 422 B.R. 175 (Bankr. E.D. Ark. Jan. 12, 2010) (Mixon) (Under Arkansas Foreclosure Act, acceptance of bid is not final act required to sell debtor's residence; when Chapter 13 petition was filed before trustee's deed was recorded, debtor retained opportunity to cure default under § 1322(c)(1). Arkansas determines that "sold" means property has been irrevocably transferred by execution and delivery of deed to purchaser who accepts deed.).

Iowa

Northern District of Iowa

In re Christiansen, No. 15-00156, 2015 WL 4127185, at *3 (Bankr. N.D. Iowa July 8, 2015) (Collins) (Under Iowa law, foreclosure judgment without sale does not strip debtor of equitable right of redemption. "'If a debtor files a bankruptcy petition before the foreclosure sale, the debtor's equity of redemption is property in the estate. The general tolling provisions of the Bankruptcy Act will preserve this property interest until the release of that property by the trustee.'").

Missouri

Eastern District of Missouri

Beckham v. Bond (In re Beckham), 447 B.R. 603 (Bankr. E.D. Mo. Apr. 14, 2011) (Surratt-States) (Plan cannot manage tax lien when tax sale was completed prepetition and right to cure had expired.).

Nebraska

Zeitner v. Ocwen Loan Servicing (In re Zeitner), No. BK14-82049, 2016 WL 4035617 (Bankr. D. Neb. July 22, 2016) (Saladino) (Upon Ocwen’s failure to respond or appear, judgment entered fixing prepetition mortgage arrearage at $10,000 estimated by debtor. Trustee filed a proof of claim for Ocwen in the amount of $10,000, and court confirmed plan that paid $10,000 mortgage arrearage with interest at 11.375%.).

I.  Ninth Circuit

Frazer v. Drummond (In re Frazer), 377 B.R. 621, 629-32 (B.A.P. 9th Cir. Sept. 27, 2007) (Smith, Perris, Klein) (Contract for deed under Montana law is not treated like a mortgage and there is no foreclosure remedy; § 1322(c)(1) does not apply, but Chapter 13 debtors can cure default under § 1322(b)(3) and (b)(5), and § 108(b) does not apply. "For § 1322(c)(1) to be applicable, there must be, first, a default with respect to a lien on the debtor's principal residence and, second, the possibility of a foreclosure sale, whether strict, judicial, or nonjudicial, pursuant to nonbankruptcy law. . . . Debtors can establish that the Contract exclusively dealt with their principal residence and that Britton held a line-type interest on the property based on the fact that Montana law treats the contract for deed as a security device. . . . Debtors' § 1322(c)(1) argument fails, however, because under Montana law, there is no foreclosure sale (or a functional equivalent) where the security device is a contract for deed. . . . Because no foreclosure sale is required to be held prior to forfeiture of a contract for deed, we agree with the bankruptcy court that § 1322(c)(1) does not apply. . . . [T]hat § 1322(c)(1) does not apply in this situation does not deprive Debtors of the ability to employ a chapter 13 plan to cure the default on the contract for deed. . . . [T]he more specific cure provisions of § 1322 . . . apply rather than the more general provision of § 108(b).").

California

Central District of California

In re Richter, 525 B.R. 735, 744-49 (Bankr. C.D. Cal. Jan. 20, 2015) (Yun) (Adopting gavel rule for § 1322(c)(1) purposes, because condo was sold at a prepetition, nonjudicial foreclosure sale, debtor cannot cure defaults under § 1322(b)(3) or (b)(5). Buyer at prepetition foreclosure sale does not hold a "claim" against the debtor or the debtor's property; therefore, plan cannot modify the buyer's rights by redeeming property under § 1322(b)(2). Debtor's only right is to redeem in full within the extension period allowed by § 108(b). "This Court agrees with those courts adopting the gavel rule. . . . Property is 'sold at a foreclosure sale' at the completion of the foreclosure auction under California law . . . . The addition of a statutory right of redemption to the equation . . . does not extend the point in which property is 'sold at a foreclosure sale' . . . . '[Section] 1322(c)(1) terminates a debtor's right to cure a . . . default when the gavel comes down on the last bid at the foreclosure sale.' . . . Because the Residence '[was] sold at a foreclosure sale that [was] conducted in accordance with applicable nonbankruptcy law' before the petition date, Debtor could no longer utilize the cure provisions of § 1322(b)(3) and (b)(5), as limited by § 1322(c)(1), to cure the delinquent assessments . . . . Many courts have permitted debtors to modify their postsale right of redemption that arose after a tax sale under § 1322(b)(2), concluding that the third-party purchaser at the tax sale holds a 'claim' . . . . While it is true that a debtor will lose his remaining interest in the property as a consequence of not redeeming, the threat of this loss alone is insufficient to establish the purchaser's 'right to payment.' The 'right to payment' requires, in addition to enforceability, that there be an obligation. . . . [W]ith statutory redemption, what the debtor has is not an obligation or duty to pay the redemption price to avoid losing ownership of the property but a voluntary right or opportunity to pay the redemption price in order to regain ownership. . . . Rustling Oaks' right to delivery of the Trustee's Deed following the expiration of the redemption period is also not a 'right to an equitable remedy for breach of performance [that] gives rise to a right of payment' . . . . Because Rustling Oaks, as a purchaser of property subject to a statutory right of redemption, does not hold a 'claim' within the meaning of § 101(5)(A) or (B) by reason of Debtor's right to pay the redemption price, Debtor cannot rely on § 1322(b)(2) to exercise and modify his right of redemption. . . . [Section] 108(b) extended that period an additional 60 days. . . . [T]he § 108(b) option has expired for Debtor[.]").

In re Gallagher, No. 2:12-bk-10213-NB, 2012 WL 2900477 (Bankr. C.D. Cal. July 12, 2012) (Bason) (Plan not confirmable that would reinstate mortgage without paying substantial prepetition arrearage; plan must pay present value of arrearage and arrearage must be cured within reasonable time.).

Eastern District of California

In re Vassallo, No. 08-37113-D-13L, 2008 WL 5110999 (Bankr. E.D. Cal. Dec. 3, 2008) (unpublished) (Bardwil) (Debtor's motion to "overturn" prepetition foreclosure sale is not proper procedure; to determine debtor's interest in real property, adversary proceeding is required.).

Northern District of California

Gan B, LLC v. Sims, 575 B.R. 375, 379-89 (N.D. Cal. June 13, 2017) (Leinenweber) (Debtor can redeem property from an Illinois tax sale through the Chapter 13 plan and need not provide insurance or pay postpetition property taxes to defeat stay relief under § 362(d)(1). “The holder of a certificate of purchase has the right to receive the redemption amount . . . . Debtors may use the Chapter 13 device to pay such tax debt over time because ‘they are not exercising their right to redeem’ but instead ‘are using their Chapter 13 plan to pay a secured claim over time, as they are entitled to do’ under 11 U.S.C. § 1322(b)(2). . . . A debtor may satisfy its tax delinquency obligations if its Chapter 13 plan pays the county in full for the back taxes, interest, and penalty . . . . [T]he stay bars a tax purchaser’s attempt to enforce its lien . . . . [E]ven after expiration of the redemption period and until the tax deed is issued, the debtor holds title to the property. . . . Unlike the mortgagee/mortgagor relationship, in which the mortgagee often insists on payment of real estate taxes and maintenance of property insurance as a condition of advancing funds to the mortgagor-debtor, [the purchaser] could not have predicated acquisition of its tax claim on . . . performance of such obligations. . . . [T]he statute does not go so far as to require maintenance of insurance in order to forestall any potential loss on the property. . . . [The purchaser] is adequately protected despite Sims’s failure to pay post-petition real estate taxes or carry property insurance.”).

Hawaii

Pelosi v. Hoopai (In re Hoopai), 344 B.R. 134 (D. Haw. Oct. 14, 2005) (Ezra) (Mortgage holder appropriately raised issue in its first brief whether Chapter 13 debtor had any interest in property that was subject to a prepetition foreclosure sale.).

In re Hoopai, No. 04-02511, 2005 WL 1156091 (Bankr. D. Haw. Jan. 12, 2005) (unpublished) (Faris) (When mortgagee proceeded under older nonjudicial foreclosure statute, Haw. Rev. Stat. § 667-5, prepetition foreclosure was not complete to extinguish debtor's interest absent recording of statutory affidavit. Hawaii's legislature enacted an alternative foreclosure procedure, Haw. Rev. Stat. § 667-21, in 1998, which specifically requires both an affidavit and conveyance document. Section 1322(c)(1) does not apply when plan proposes to sell home and pay lender in full under § 1322(b)(8).).

Montana

In re Cardwell, No. 13-60311-13, 2013 WL 5963550, at *9 (Bankr. D. Mont. Nov. 7, 2013) (Kirscher) (Under § 1322(e), undersecured mortgagee's arrearage claim may include attorney fees, charges, costs and interest. "[T]he text of § 1322(e) is plain and unambiguous in disregarding § 506(b) in determining the amount of [mortgagee's] arrearage to be cured in Debtors' Plan[.]" Fees, charges and costs were provided for under note and deed of trust. Prepetition and postpetition attorney fees, costs and charges were allowed under state law.).

In re Cardwell, No. 13-60311-13, 2013 WL 5963550, at *9 (Bankr. D. Mont. Nov. 7, 2013) (Kirscher) (Under § 1322(e), undersecured mortgagee's arrearage claim may include attorney fees, charges, costs and interest. "[T]he text of § 1322(e) is plain and unambiguous in disregarding § 506(b) in determining the amount of [mortgagee's] arrearage to be cured in Debtors' Plan[.]" Fees, charges and costs were provided for under note and deed of trust. Prepetition and postpetition attorney fees, costs and charges were allowed under state law.).

In re Chitwood, No. 13-60311-13, 2013 WL 5946123, at *10 (Bankr. D. Mont. Nov. 6, 2013) (Kirscher) (Under § 1322(e), undersecured mortgagee's arrearage claim may include attorney fees, charges, costs and interest. "[T]he text of § 1322(e) is plain and unambiguous in disregarding § 506(b) in determining the amount of [mortgagee's] arrearage to be cured in Debtors' Plan[.]" Fees, charges and costs were provided for under note and deed of trust. Prepetition and postpetition attorney fees, costs and charges were allowed under state law.).

In re Chitwood, No. 13-60311-13, 2013 WL 5946123, at *10 (Bankr. D. Mont. Nov. 6, 2013) (Kirscher) (Under § 1322(e), undersecured mortgagee's arrearage claim may include attorney fees, charges, costs and interest. "[T]he text of § 1322(e) is plain and unambiguous in disregarding § 506(b) in determining the amount of [mortgagee's] arrearage to be cured in Debtors' Plan[.]" Fees, charges and costs were provided for under note and deed of trust. Prepetition and postpetition attorney fees, costs and charges were allowed under state law.).

In re Clark, No. 10-60414-13, 2010 WL 4272480, at *4-*5 (Bankr. D. Mont. Oct. 25, 2010) (Kirscher) ("Sale plan" that would cure default by sale of property sometime during next two years did not satisfy either § 1322(b)(5) or § 1322(c)(1) when court previously granted stay relief to mortgagee and foreclosure sale would take place by end of current year. "The fact that this Court has granted [creditors] relief from the automatic stay creates a dilemma for Debtors because generally this Court addresses 11 U.S.C. § 1322(b)(5) and a cure-by-sale clause either while the automatic stay is still in place or in conjunction with a stay motion. . . . Debtors have made no attempt to reimpose the automatic stay. Under such scenario, § 1322(c)(1) clarifies that Debtors' default . . . may be cured under § 1322(b)(3) or (5) until Debtors' residence is sold at a foreclosure sale conducted in accordance with applicable nonbankruptcy law.").

In re Clark, No. 10-60414-13, 2010 WL 4272480 (Bankr. D. Mont. Oct. 25, 2010) (Kirscher) (Although § 1322(b)(5) permits curing of defaults within reasonable time, when court had previously granted stay relief to permit foreclosure, "sale plan" that would cure defaults by sale sometime within the next two years was not confirmable because foreclosure was set before sale had to take place. Section 1322(c)(1) would require curing before foreclosure sale, and proposal to cure defaults by selling property violated § 1322(c)(1) when sale time was after foreclosure date.).

In re Snyder, 420 B.R. 794 (Bankr. D. Mont. Nov. 13, 2009) (Kirscher) (Plan providing for cure of all defaults by payment in full of secured claim from sale of residence within 24 months, with drop-dead date within which debtor would vacate and surrender residence if not sold, was proposed in good faith, was feasible and provided reasonable cure period. Evidence showed marketability of property within time proposed and equity cushion sufficient to pay all secured claims in full, including interest.).

In re Bassett, 413 B.R. 778 (Bankr. D. Mont. Feb. 26, 2009) (Kirscher) (Curing default in mortgage on business property by sale of property satisfied § 1322(b)(5) and did not violate § 1322(b)(2) when time period permitted for sale was reasonable, plan provided for stay relief to creditor if sale failed, location of property was good and equity cushion protected creditor.).

In re Ransom, 361 B.R. 895 (Bankr. D. Mont. Jan. 16, 2007) (Kirscher) (When plan cures mortgage arrearages under § 1322(e), attorney fees are limited by Montana law to 1% or 5% of principal and interest depending on whether a nonjudicial foreclosure occurs; oversecured creditor must submit fee application consistent with local rule or perhaps can disclose all prepetition fees and costs in a carefully prepared proof of claim.).

Oregon

Lee v. Nationstar Mortg., LLC, No. 16-3156-pcm, 2017 WL 3394482 (Bankr. D. Or. Aug. 7, 2017) (McKittrick) (Nationstar’s claim for advances for payment of delinquent taxes is allowed because loan documents permitted Nationstar to pay the delinquent taxes and then charge the loan.).

In re Pineda-Pineda, 510 B.R. 648 (Bankr. D. Or. Apr. 18, 2014) (Dunn) (Section 1322(c) precluded cure of delinquent real property taxes when prepetition default judgment constituted foreclosure sale under Oregon law and failure to redeem within statutory period resulted in transfer of property to county. Bankruptcy filing extended two-year redemption period that had not expired at petition date, but failure of debtors to redeem within time extended under § 108(b) foreclosed debtor's rights in the property. That county had yet to record deed did not change result, as recordation was ministerial act exempt from the automatic stay under McCarthy, Johnson & Miller v. North Bay Plumbing, Inc. (In re Pettit), 217 F.3d 1072 (9th Cir. July 6, 2000) (Schroeder, Beezer, Trott).).

Freeman v. Names (In re Names), No. 10-6244, 2011 WL 1837819 (Bankr. D. Or. May 13, 2011) (Perris) (Prepetition foreclosure sale was final, notwithstanding omission of required notice to residential tenants. Construing Oregon foreclosure law, debtor was properly served with notice of sale and omission of statutory notice to residential tenants did not make notice to debtor defective.).

Washington

Western District of Washington

Bell v. Aurora Loan Servs. (In re Bell), 386 B.R. 282 (W.D. Wash. Mar. 3, 2008) (Zilly) (Debtor in default of prepetition forbearance agreement could not invalidate completed foreclosure sale, having no interest in property at time of bankruptcy filing.).

J.  Tenth Circuit

Colorado

In re Dennis, No. 12-28423 MER, 2013 WL 593690 (Bankr. D. Colo. Feb. 15, 2013) (Romero) (Under Colorado law, once foreclosure has been filed, cure amount may include late charges, attorney fees and other costs.).

Kansas

In re Jackson, 452 B.R. 818 (Bankr. D. Kan. July 18, 2011) (Berger) (Foreclosure sale concluded in accordance with Kansas law between dismissal of case and actual reinstatement terminated debtor's right to cure.).

Payne v. Mortgage Elec. Registration Sys., Inc. (In re Payne), 387 B.R. 614 (Bankr. D. Kan. May 6, 2008) (Berger) (Mortgagee violated Real Estate Settlement Procedures Act by failing to adequately respond to Qualified Written Request for loan information, violated automatic stay by making unauthorized postpetition charges for late fees and attorney fees, and violated confirmation order by improperly applying postpetition payments to prepetition arrearage; violations resulted in damages under RESPA as well as for willful stay violation and violation of confirmation order: $3,350 for emotional distress, out-of-pocket and punitive damage award, and disallowance of $12,998.22 in unauthorized postpetition late charges and attorney fees. Mortgagee is further ordered to show debtors' account as current.).

In re Andrews, No. 07-20104, 2007 WL 2793401, at *1 (Bankr. D. Kan. Sept. 26, 2007) (unpublished) (Berger) (Objection to confirmation sustained because plan was unduly restrictive of Well Fargo's right to apply payments first to interest on its prepetition arrearage claim; court offers model language for plans curing prepetition and postpetition defaults. "On mortgage note obligations, within 60 days of issuing the final payment of the home mortgage cure amount (arrearages), the Trustee shall serve upon the mortgagee, its attorney, the debtor, and the debtor's attorney a notice stating that (1) the cure amount (arrearages) has been paid, satisfying all prepetition arrearage obligations of the debtor; (2) the mortgagee is required to treat the mortgage as reinstated and fully current unless the debtor has failed to make timely payments of postpetition obligations; (3) if the debtor has failed to make timely payments of any postpetition obligations, within 60 days after the Trustee's notice, the mortgagee is required to file a Statement of Outstanding Obligations, consisting of an itemization of all outstanding payment obligations as of the date of its statement, with service upon the Trustee, the debtor, and the debtor's attorney; (4) if the mortgagee fails to file and serve a Statement of Outstanding Obligations within the required time, the mortgagee is required to treat the mortgage as reinstated according to its original terms and fully current as of the date of the Trustee's notice; and (5) if the mortgagee does serve a Statement of Outstanding Obligations within the required time, the debtor may (i) within 30 days of service of the Statement, challenge the accuracy thereof by motion filed with the court, to be served upon the mortgagee, its attorney, and the Trustee, or (ii) propose a modified plan to provide for payment of additional amounts that the debtor acknowledges or the court determines are due. To the extent that amounts set forth on a timely filed Statement of Outstanding Obligations are not determined by the court to be invalid or are not paid by the debtor through a modified plan, the right of the mortgagee to collect these amounts will be unaffected." Postconfirmation fees and expenses remain subject to reasonableness evaluation.).

In re Coover, No. 06-40176, 2006 WL 4491439, at *7 (Bankr. D. Kan. Sept. 28, 2006) (unpublished) (Karlin) (Model plan language concerning prepetition arrearages and reinstatement of mortgages modified to provide as follows: "The amount of the pre-petition arrearage as specified in the creditor's proof of claim shall govern, unless specifically controverted in this plan or by objection to the claim as required by D. Kan. LBR 3015(b).1. Interest will not be paid on the arrearage unless ordered by the Court. If the Debtor pays the arrearage amount specified in the mortgage company's timely filed Proof of Claim, while timely making all required post petition payments (including any other reasonable amounts that properly come due pursuant to the pre-petition contractual agreement of the parties and of which the creditor gives such timely and appropriate notice as the parties' pre-petition agreement requires), the mortgage will be reinstated according to its original terms, extinguishing any right of the mortgagee to recover any amount alleged to have arisen prior to the filing of the petition, unless such amounts were included in the allowed proof of claim filed in this case.").

New Mexico

Yaryan-Parks Trust v. Martinez (In re Martinez), 476 B.R. 627, 643-46 (Bankr. D.N.M. July 30, 2012) (Starzynski) (Notwithstanding issuance of writ of replevin by state court before the petition, debtor retained rights sufficient to allow management of debt secured by mobile home through Chapter 13 plan. "[A] statutory or equitable right of redemption becomes property of the bankruptcy estate. . . . This right alone allows a debtor to cure under § 1322(b) until a foreclosure sale. . . . Although Plaintiff obtained a foreclosure judgment, Debtor retained a redemption right which allows her to cure the related obligation in her bankruptcy case. . . . [T]he state court issued a writ of replevin, which had not been served or returned by the filing of the bankruptcy. Under New Mexico law, the writ of replevin is the equivalent to a summons. . . . [T]he mere issuance of the writ [of replevin] by the state court did not divest Debtor's interest in the mobile home under state law. Therefore, the mobile home is property of the estate.").

K.  Eleventh Circuit

Alabama

Middle District of Alabama

In re Hubbard, 569 B.R. 188 (Bankr. M.D. Ala. Mar. 28, 2017) (Sawyer) (Plan cannot cure default and maintain payments with respect to mobile home and land because lender completed foreclosure sale under Alabama law before the Chapter 13 petition.).

In re Washington, 551 B.R. 644, 647–53 (Bankr. M.D. Ala. June 20, 2016) (Sawyer) (Alabama tax sale and delivery of deed does not cut off Chapter 13 debtor’s right to redeem under § 1322(b)(11) when modified plan complies with Alabama “judicial redemption” rules. “Washington’s interest in the Property is defined by Alabama’s tax sale law . . . . [U]nder Alabama law . . . the tax debtor has three years (or more) to redeem his interest in the land without losing legal title to the property — known as administrative redemption. . . . If the tax purchaser obtains a tax deed and maintains adverse possession of the land, the tax debtor has three years to redeem the land by filing suit — known as judicial redemption. If the tax debtor has at least constructive or scrambling possession . . . , then notwithstanding the tax deed the tax debtor has a right to redeem the land for as long as he retains possession. . . . Washington’s judicial redemption right . . . did enter his bankruptcy estate. . . . Washington’s ability to exercise his judicial redemption right in Chapter 13 is limited by the time constraints of state law and, if applicable, 11 U.S.C. § 108(b). . . . Section 1322(b) does not specifically authorize a debtor to exercise a right of redemption in a Chapter 13 plan; however, a plan may ‘include any other appropriate provision not inconsistent with [the Bankruptcy Code].’ . . . [Section] 1322(b)(11) contemplates a debtor’s exercise of a right of redemption through a Chapter 13 plan, so long as it is exercised in accordance with state law. . . . Alabama law requires a tax debtor to make a lump sum payment . . . . [T]he Trustee can simply hold the payments Washington makes toward the redemption until he has paid enough to make the lump sum payment to the probate court.”).

In re Gonzalez, No. 09-11503-DHW, 2010 WL 1490057 (Bankr. M.D. Ala. Apr. 15, 2010) (unpublished) (Williams) (When mortgage was not in default at time of filing, and contract only provided for attorney fees when borrower had defaulted or lender had accelerated debt, mortgage creditor had no claim for attorney fees for review of plan and filing proof of claim.).

Avery v. Wells Fargo Bank NA (In re Avery), No. 07-8062-WRS, 2009 WL 190038, at *3 (Bankr. M.D. Ala. Jan. 27, 2009) (Sawyer) (Under Green Tree Acceptance, Inc. v. Hoggle (In re Hoggle), 12 F.3d 1008 (11th Cir. 1994), debtor can cure postpetition arrearages, but debtor's Hoggle attempt to cure postpetition delinquencies fails because of multiple defaults "either by not making payments or by tendering checks which were dishonored.").

In re Morgan, No. 06-30531-DHW, 2006 WL 2338147, at *1 (Bankr. M.D. Ala. Aug. 9, 2006) (unpublished) (Williams) (Foreclosure sale several hours before Chapter 13 petition cut off right to cure default notwithstanding that foreclosure deed was not recorded until after petition. "Under § 1322(c), a foreclosure sale conducted in accordance with applicable nonbankruptcy law terminates the debtor's right to reinstate the mortgage on her principal residence.").

In re Barron, 325 B.R. 17, 20 (Bankr. M.D. Ala. Apr. 15, 2005) (Williams) (When mortgage contract required that the debtor maintain insurance "against such risks and in such amounts as [Green Tree] may reasonably require" debtor appropriately purchased physical damage insurance for the $15,000 value of the mobile home listed in the schedules; Green Tree is not entitled to recover the cost of force-place insurance in the amount of the principal balance of its debt, $32,000. Confirmed plan provided for postpetition payments directly to Green Tree and payment of a prepetition arrearage through the Chapter 13 trustee. The debtor valued the mobile home collateral at $15,000 in the schedules and purchased a physical damage insurance policy for $15,000. When Green Tree learned that insurance coverage was limited to the value, it purchased insurance coverage for the full amount of the principal balance of its debt, approximately $32,000. Bankruptcy court found that Alabama law would limit Green Tree's recovery from the hazard insurer to the value of the mobile home at the time of the loss, thus it was unreasonable for Green Tree to force-place hazard insurance in any amount greater than the $15,000 policy purchased by the debtor.).

Northern District of Alabama

Sandlin v. Ameriquest Mortgage Co. (In re Sandlin), No. 08-00191, 2010 WL 1416699 (Bankr. N.D. Ala. Apr. 8, 2010) (unpublished) (Mitchell) (Section 1322(e) does not limit court's authority to determine reasonableness of fees under § 506(b); § 1322(b)(5) cure provisions do not permit mortgage creditor to evade § 506(b) disclosure and reasonableness requirements.).

Florida

Middle District of Florida

In re Domenech, No. 6:11-bk-09422-ABB, 2012 WL 293662 (Bankr. M.D. Fla. Jan. 13, 2012) (Briskman) (Motion to compel Wells Fargo Home Mortgage to comply with loan modification denied when prepetition foreclosure judgment terminated right of redemption and debtor had no surviving right to cure defaulted mortgage through plan.).

In re Lozada, 446 B.R. 604 (Bankr. M.D. Fla. Mar. 31, 2011) (Glenn) (Lien on property quitclaimed to debtor as heir of deceased borrower could be managed through plan notwithstanding absence of personal liability and over lender's objection that quitclaim violated due on sale clause.).

In re Blinco, No. 3:06-BK-01569-GLP, 2006 WL 2471961 (Bankr. M.D. Fla. Aug. 28, 2006) (unpublished) (Proctor) (Payment of $147,000 mortgage arrearage in months 49-60 with no payments during first four years fails § 1322(b)(5) requirement that default be cured within a reasonable time.).

In re Dunbar, No. 03-GK-03506-PMG, 2005 WL 852585 (Bankr. M.D. Fla. Mar. 30, 2005) (unpublished) (Glenn) (Foreclosure fees and costs claimed in the current bankruptcy case are appropriately recoverable in accordance with the note and mortgage and can be recovered by Wells Fargo/Norwest Mortgage, Inc. by reversals of amounts previously credited to the debtor's loan amount.).

Northern District of Florida

In re Alexander, No. 06-30497-LMK, 2007 WL 2296741 (N.D. Fla. May 9, 2007) (unpublished) (Killian) (Curing mortgage default de-accelerates mortgage, deactivating Fla. Stat. § 95.11(2)(c), which requires foreclosure within five years of acceleration. Creditor had accelerated debt due to default prebankruptcy. Bankruptcy Code preempts Florida statute. If statute did apply, § 108(c) would toll limitations period.).

In re Alexander, No. 06-30497-LMK, 2007 WL 2296741, at *3 (N.D. Fla. May 9, 2007) (unpublished) (Killian) (Objection to plan based on incurable default by transfer of property without lender's consent is denied, when transfer resulted from death of debtor's spouse. "[U]nder the Garn-St. Germain National Depository Institutions Act of 1982, 12 U.S.C. § 1701j-3, a lender may not exercise its option pursuant to such a 'due-on-sale' clause when the transfer is to a relative resulting from the death of the borrower or when the spouse or children of the borrower become an owner of the property.").

In re Alexander, No. 06-30497-LMK, 2007 WL 2296741, at *3 (N.D. Fla. May 9, 2007) (unpublished) (Killian) (Five years not unreasonable time to cure monetary default. "[I]t is certainly not unreasonable for a debtor to cure the default over the time the Code provides for the completion of the plan. See Nobleman v. Am. Sav. Bank, 508 U.S. 324, 330, 113 S. Ct. 2106, 124 L. Ed. 2d 228 (1993) (stating, '§ 1322(b)(5) permits the debtor to cure prepetition defaults on a home mortgage by paying off arrearages over the life of the plan[.]'").

In re Alexander, No. 06-30497-LMK, 2007 WL 2296741, at *3 (N.D. Fla. May 9, 2007) (unpublished) (Killian) (Section 1322(e) requires defaults to be cured in amount determined under applicable nonbankruptcy law and parties' agreement; when note provided for 7.625% interest but nothing in note provided for interest on arrearages, "§ 1322(e) does not require the Plan to so provide.").

Southern District of Florida

In re Rodriguez, No. 16-14608-BKC-LMI, 2016 WL 8504994, at *2 (Bankr. S.D. Fla. July 12, 2016) (Isicoff) (Citing In re Jaar, 186 B.R. 148 (Bankr. M.D. Fla. June 30, 1995) (Glenn), “a debtor’s rights under section § 1322(c)(1) are cut off only after the certificate of sale is issued.” Debtor can manage a mortgage in a Chapter 13 case filed on March 31, 2016, at 10:58 a.m. when the property was sold in a foreclosure sale on March 31, 2016, at 10:10 a.m. but the certificate of sale had not issued at the time the bankruptcy petition was filed.).

In re Ramos, 357 B.R. 669 (Bankr. S.D. Fla. Nov. 21, 2006) (Isicoff) (Home had been conveyed to debtor in violation of due-on-sale clause, but lender waived breach of contract argument by seeking adequate protection. In dicta, agreeing with In re Garcia, 276 B.R. 627 (Bankr. D. Ariz. 2002), Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), held that debtor-creditor relationship, sufficient to permit curing of defaults, exists by virtue of lender's security interest in debtor's home, even when no personal liability exists.).

Georgia

Middle District of Georgia

Bishop v. GMAC Mortg., LLC (In re Bishop), No. 11-5055, 2011 WL 6813241 (Bankr. M.D. Ga. Dec. 27, 2011) (Walker) (Completed prepetition foreclosure sale was neither void nor voidable and left debtor with no interest to manage through Chapter 13 plan. MERS had authority to execute and transfer assignment of security deed to GMAC, giving GMAC authority to conduct foreclosure sale. Recording of foreclosure deed did not violate automatic stay. Under Georgia law, debtor had no equitable right of redemption nor equitable right of appeal from foreclosure.).

In re Tolbert, 458 B.R. 633, 634 (Bankr. M.D. Ga. Aug. 23, 2011) (Laney) (Cosigner cured arrearage on simple interest mortgage note in prior Chapter 13 case, but note continued to accrue interest on principal at an accelerated rate, and that amount remained unpaid at inception of current case. "When a payment is late, more of that payment goes toward interest and less goes to principal. The later a payment is, a progressively higher amount of the payment pays off the accrued interest and progressively less goes to amortize the principal balance. . . .[L]ate payment during the course of a simple interest loan repayment effectively creates a new amortization schedule, and any other late payments do the same." Loan remained subject to § 1322(b)(2) protection from modification in current case.).

Williams v. Suntrust Bank (In re Williams), 393 B.R. 813, 820 (Bankr. M.D. Ga. Sept. 4, 2008) (Hershner) (Under Georgia law, although deed was not recorded until after petition, foreclosure was completed prepetition when high bid was accepted at sale. "[D]ebtor's equity of redemption is terminated when the high bid is made at a foreclosure sale. The high bid is an appropriate and an objective standard under state law for determining when the foreclosure is final.").

Chase Home Fin. LLC v. Geiger (In re Geiger), 340 B.R. 422 (Bankr. M.D. Ga. Mar. 30, 2006) (Hershner) (Applying Georgia law, foreclosure sale 55 minutes before petition had not been consummated, leaving debtor's right of redemption in bankruptcy estate.).

In re Johnson, 329 B.R. 783, 787 (Bankr. M.D. Ga. Aug. 26, 2005) (Hershner) (Creditor may not impose a late fee which, by contract, applies to any late "periodic payment" when the debtor failed to make a lump-sum payment. The debtor filed a Chapter 13 petition seeking to cure defaults. The debtor objected to the claim asserted by the creditor, noting that the claim contained a late charge of $13,439. The note provided for a 5% late charge if "any periodic payment" was not made within 15 days of its due date. The note, however, required a single payment of $268,693.09 on August 12, 2001. The debtor did not make the payment. "The Court is persuaded that the usual and common understanding of 'periodic payment' does not include the making of a single payment for the full amount. . . . Periodic payment means one of a series of payments made over time instead of a single payment for the full amount. Since the promissory note did not provide for periodic payments, Movant could not have missed a periodic payment." Accordingly, including the late charge was inappropriate in the claim.).

Northern District of Georgia

In re Woodley, 579 B.R. 630, 637–39 (Bankr. N.D. Ga. Dec. 18, 2017) (Ellis-Monro) (Acknowledging deep split in the district, Chapter 13 debtor can modify rights of Georgia tax sale purchaser under § 1322(b)(2) and pay redemption amount over life of plan. Georgia state courts have determined that tax sale purchaser does not acquire the entire bundle of ownership rights until redemption period expires and right to redeem is foreclosed. This Chapter 13 case was filed before redemption period ended. Debtor retained rights in property sufficient to support modification under § 1322(b)(2). Purchaser at prepetition tax sale held a nonrecourse claim under Johnson that can be modified under § 1322(b)(2). “[S]ecurity deeds and tax deeds provide nearly identical rights; the holder of a non-recourse security deed unquestionably holds a claim in bankruptcy under [Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (June 10, 1991)]. . . . ‘[W]hat the tax sale purchaser receives is not fee simple title, but rather a defeasible fee interest evidenced by a tax deed.’ . . . That defeasible fee interest secures Encore’s claimeventually, Encore will get either the Redemption Price or Debtor’s interest in the Property. . . . The Plan provides for payment of Encore’s claim in full while modifying Encore’s state law right to timely receive a lump sum payment of the Redemption Price or else be able to foreclose Debtor’s redemption rights. . . . The Property is not Debtor’s principal residence. Encore’s rights, therefore, can be modified in the Plan, subject to the limitations in § 1325(a)(5) for the treatment of secured claims.”).

In re Francis, 489 B.R. 262 (Bankr. N.D. Ga. Mar. 13, 2013) (Hagenau) (Although property had been purchased at prepetition tax sale, debtor retained right of redemption by filing petition before redemption period expired; redemption could be paid in full over 60-month plan, treating tax purchaser as secured creditor.).

In re Drummer, 457 B.R. 912 (Bankr. N.D. Ga. Aug. 5, 2011) (Sacca) (Right of redemption that had not expired under Georgia law became property of bankruptcy estate and was necessary to effective reorganization.).

In re Taylor, No. 06-76846-MGD, 2007 WL 7140157 (Bankr. N.D. Ga. May 1, 2007) (Diehl) (Mortgage lender demonstrated necessity and reasonableness of foreclosure fees and costs and prebankruptcy fees included in arrearage claim.).

In re Haynes, No. 07-10365-WHD, 2007 WL 7141218 (Bankr. N.D. Ga. Apr. 17, 2007) (Drake) (Under Georgia law, foreclosure sale was complete prepetition and executed deed proved that equity of redemption expired.).

In re Respert, No. 05-90606-WHD, 2005 WL 6486373 (Bankr. N.D. Ga. Sept. 20, 2005) (Drake) (Section 1322(e) controls whether Ameriquest Mortgage was entitled to collect attorney fee as part of arrearage, but evidence before court did not include promissory note or other documents necessary to determine contract rights. Ameriquest was permitted to file supporting documents along with affidavit establishing authenticity if it wished to pursue fees.).

In re Respert, No. 05-90606-WHD, 2005 WL 6486373 (Bankr. N.D. Ga. Sept. 20, 2005) (Drake) (Section 1322(e) controls whether Ameriquest was entitled to collect attorney fee as part of arrearage. Evidence before court did not include promissory note or other documents necessary to determine contract rights. Ameriquest may file supporting documents along with affidavit establishing authenticity if it wished to pursue fees.).

In re Jacobs, 324 B.R. 402 (Bankr. N.D. Ga. Apr. 28, 2005) (Bonapfel) (Condominium association is entitled to add attorney's fees, reasonable and necessary to the collection of its prepetition debt for condominium association fees; however, prepetition legal services costing $3,474.70 when the debtor was only $325 in default of association fees is unreasonable, and the association's continued collection efforts without attempting nonjudicial resolution with the debtor was not necessary when the debtor was continuing to pay monthly fees without litigation.).

L.  D.C. Circuit

District of Columbia

In re Isaac, No. 06-00172, 2006 WL 3657439, at *1 (Bankr. D.D.C. Dec. 11, 2006) (unpublished) (Teel) (When Chapter 7 debtor converted to Chapter 13 to stop sale of home, court observes with respect to curing default: "[I]t is likely the court would hold, in the context of the mortgagee's pending motion for relief from the automatic stay, that the postpetition/preconversion arrears may not be cured via her chapter 13 plan. It appears unlikely that the debtor could cure her postpetition mortgage arrears pursuant to the typical chapter 13 order conditioning the automatic stay that the court enters to address postpetition defaults on a debtor's home mortgage. Pursuant to that type of order, the debtor is granted only a brief period to bring her postpetition home mortgage defaults current, and not the usual 36 or more months that a chapter 13 plan would entail.").

Stewart v. Capital City Mortgage Corp. (In re Stewart), Nos. 00-00046, 02-10020, 2004 WL 3130573 (Bankr. D.D.C. Nov. 10, 2004) (unpublished) (Teel) (When contract did not provide for interest on interest, § 1322(e) requires disallowance of interest.).

Stewart v. Capital City Mortgage Corp. (In re Stewart), Nos. 00-00046, 02-10020, 2004 WL 3130573 (Bankr. D.D.C. Nov. 10, 2004) (unpublished) (Teel) (Oversecured mortgage holder is entitled to one-time contractual late charge on each late payment, actual documented costs and reasonable attorney fees for in-house counsel if documented. Interest on late charges is not collectible because there was no provision of the note or deed of trust providing for such interest. Charges for courier service and other miscellaneous costs were mostly disallowed because of lack of documentation. Same for attorney fees—Capital City's records were incomprehensible or nonexistent, and many attorney fee charges were not documented or related to matters that were decided against Capital City in the claims litigation. Interest on attorney fees was not allowed because there was no provision in the note or modified deed of trust for such interest. Capital City's failure to give notice of defaults under the deed of trust precluded it from recovering interest even on amounts it justifiably advanced for the debtor.).