Equal Monthly Payments and the Modification of Mortgages in Chapter 13

Consumers facing a home mortgage foreclosure may find bankruptcy is the most effective option for saving their home.  The dismissal statics from the Department of the Treasury of the number of permanent modifications under the Homeowners Affordable Modifciaton Program (HAMP) make Chapter 13 the only real option for the vast majority of distressed consumers with family homes.

Chapter 13 is the most commonly used form of bankruptcy in consumer home defense. It provides a powerful right generally unavailable under state law namely, the right to de-accelerate a mortgage default and cure the default by paying the arrearage over a period not exceeding five years.   For some debtors, particularly those with large arrearage amounts, balloon payment plans have been an important home saving device.  Under such plans, debtors typically make relatively small monthly payments[1] throughout the plan followed by a large lump sum payment in the final month. Debtors commonly intend to fund the final payment through the sale of the home or refinancing of their mortgage loan.

Prior to BAPCPA, the question of whether a balloon payment plan in chapter 13 could be confirmed focused on feasibility.[2] Post-BAPCPA balloon plan cases have turned their attention to the “equal monthly payment” provision added in 2005.

Section 1325 provides that the court “shall” confirm a chapter 13 plan if certain requirements are met.  Section 1325(a)(5) gives the debtor three options for dealing with allowed secured claims provided for by the plan: (1) the creditor may accept the plan, § 1325(a)(5)(A); (2) the debtor may surrender the collateral to the secured creditor § 1325(a)(5)(C); or (3) the plan may provide for treatment of the allowed secured claim in accordance with section 1325(a)(5)(B).  In turn, section 1325(a)(5)(B)(iii) states that:

“(iii) if

(I)            property to be distributed pursuant to this subsection is in the form of periodic payments, such payments shall be in equal monthly amounts, and

(II)          the holder of the claim is secured by personal property, the amount of such payments shall not be less than an amount sufficient to provide the holder of such claim adequate protection during the period of the plan.

Several courts have already been called upon to decide whether this new language bans balloon payment plans used to cure defaults on mortgage loans.  To date, no clear answer has emerged.

No Objection, No Problem.

As noted above, debtors are entitled to confirmation of their chapter 13 plans over the objections of secured creditors if the plan complies with the provisions of section 1325(a)(5)(B). However, obtaining a creditor’s consent to a plan instead is just as good.  Where creditors consent, failure to treat an allowed secured claim in accordance with section 1325(a)(5)(B) should not prohibit confirmation. Furthermore, it has long been held that courts may find creditor consent under section 1325(a)(5)(A) where the creditor fails to object to the confirmation of the proposed chapter 13 plan.[3] For example, in In re Schultz, 2007 WL 128827 (Bankr. E.D. Wis. Jan. 12, 2007), the court confirmed the debtor’s balloon payment plan finding that the plan satisfied the requirements of section 1325(a)(5)(A).  Despite the chapter 13 trustee’s objection to confirmation, the court held that the plan was deemed accepted by the creditor because it did not object.  Also, in In re Flynn, 402 B.R. 437, Bankr. L. Rep. 81,450 (1st Cir. B.A.P., March 6, 2009), the Court held that the failure of a secured mortgage creditor to object to the terms of the plan created a presumption of acceptance under Section 1325(a)(5)(A) of the code upon a showing of adequate notice under the applicable rules in the circumstances of the case.  See also In re Szostek, 886 F.2d 1405 (3rd Cir. 1989).

In some cases, a balloon payment plan might be viewed more favorably by a secured creditor than an alternative treatment that is clearly permissible under the Code. It is not surprising then that creditors sometimes choose not to object to balloon plans.[4] Where creditors have not objected to balloon provisions, the new equal monthly payment provision should not present a barrier to confirmation.

Real Property, Personal Property or Both?

Under the new language of 1325(a)(5)(B)(iii), whenever a plan proposes periodic payments, they must be in equal amounts and adequately protect the creditor’s interest in the collateral if the claim is secured by personal property.  Section 1325(a)(5)(B)(iii)(I) does not differentiate among types of secured claims.  Rather, it refers only to “property to be distributed pursuant to this subsection.”  If the term “this subsection” refers generally to subsection (a)(5) of 1325 then the equal monthly payment provision applies to claims secured by both real property and personal property.  However, if the phrase “this subsection” refers only to subsection (a)(5)(iii) then the requirements of (I) and (II) could be viewed as cumulative and applicable only to claims secured by personal property.

The court in In re Lemieux, 347 B.R. 460 (Bankr. D. Mass. 2006), appears to have considered and rejected such an argument.  In particular, the court stated because the word “if” precedes both subsection (I) and (II), the two clauses are independent of one another.  Therefore, the explicit reference to personal property in section 1325(a)(5)(B)(iii)(II) did not serve to exclude claims secured by real property from treatment under section 1325(a)(B)(iii)(I).[5] But see In re Crickmore, Case No. 07-01350-5-ATS (Bankr. E.D.N.C., August 29, 2007)(holding single distribution to mortgage creditor permissible under 1325(a)(5)(B)(iii)(I) with interest-only AP payments to Trustee provided plan feasible).

It is interesting to note that section 309(c) of BAPCPA, which adds section 1325(a)(5)(B)(iii)(I) is entitled “ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED CREDITORS.”  Additionally, section 309 of BAPCPA deals almost exclusively with personal property.  While there is little legislative history to clarify whether equal monthly payments applies to claims secured by real property, the pre-BAPCPA practices that were seen, by many, as abusive and for which 1325(a)(5)(B)(iii) was intended to remedy relate to car creditor payments, not mortgage lenders.[6]

Obligations Maturing Before the End of Plan

Section 1322(b)(2) permits debtors to modify the rights of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence.  One exception to this anti-modification provision, however, can be found in section 1322(c)(2), which allows for the curing of mortgage loans that mature before the final payment on the plan is due.[7] Treatment of a secured claim under section 1322(c)(2) is explicitly conditioned on compliance with section 1325(a)(5).  As a result, the equal monthly payment provision applies to such a claim. In In re Lemieux, 347 B.R. 460 (Bankr. D. Mass. 2006), the court concluded, after considering this relationship between 1322(c) and 1325(a)(5), that the plain language of the statute precluded confirmation of a debtor’s plan that proposed unequal periodic payments.

In Lemieux, the debtors used section 1322(c) to deal with two junior mortgages that would become payable during the term of the plan.  In order to satisfy these secured claims, the debtors proposed a 36-month plan under which they would pay $1081 per month for the first 35 months with a final payment of $95,853 in the 36th month.  Debtors stated that the final balloon payment would come from a refinancing. Finding the debtors’ proposed plan violated the equal monthly payment provision of 1325(a)(5), the court denied confirmation.  The court, however, specifically distinguished the facts presented in Lemieux from situations in which debtors might propose a single lump-sum payment or seek to cure arrears and maintain payments under section 1322(b)(5).

The One Payment Alternative

Notably, section 1325(a)(5)(B)(iii)(I) does not mandate periodic payments.  It merely states that “if” periodic payments are provided for in the plan, they must be in equal monthly amounts.  It would appear then that the new language does not preclude a plan providing for a single lump sum payment to a creditor.[8] While no court has addressed this issue directly, the Lemieux court did not rule out such a provision.  The Schultz court also did not rule directly on the propriety of a single payment plan but suggests that such plans are incompatible where the debtor seeks to cure and maintain payments under section 1322(b)(5).  The Schultz court noted that where ongoing monthly mortgage payments are required by the mortgage loan contract, a one-payment proposal would not result in the “maintenance of payments.” Under both Lemieux and Schultz then, it appears that a debtor may be able to propose a single lump sum payment plan to address short-term obligations that become due before the end of the plan.

In Crickmore, supra, the Court suggested that “an interesting alternative approach” presented by the debtor’s counsel in In re Porter, 370 B.R. 891 (Bankr. M.D. Pa., June 15, 2007), where a mortgage claim is amenable to modification under Section 1322(c)(2), complied with Section 1325(a)(5)(B)(iii)(I).  In Porter, the proposed plan provided that the debtor would make interest-only payments during the plan directly to the Trustee, who would defer distribution to the creditor until the end of the plan, at which point the debtor would either sell the residence or refinance the mortgage loan; the creditor could waive the requirements of 1325(a)(B)(iii) and receive interest-only payments from the Trustee; and the dismissal of the case would result in the fund held by the Trustee being released to the secured mortgage creditor, instead of being returned to the debtor.  The Court also acknowledged that, depending on the facts of a particular case, feasibility concerns might bar confirmation, so that a hearing on that issue would be required (after such a hearing the Court in fact confirmed the plan).

By contrast, the court in In re Wagner, 342 B.R. 766 (Bankr. W.D. Tenn. 2006), implicitly rejected the possibility of a one-payment plan altogether when it held that section 1325(a)(5)(B)(iii)(I) required equal monthly payments over the life of the plan.  The Wagner court denied confirmation of the debtor’s plan in which she proposed bi-weekly payments for 60 months to the trustee of $420.00, monthly “maintenance installments” on her mortgage for 23 months in the amount of $728.00, and a balloon payment for the balance due on the mortgage in month 24.

The Wagner court holding–that equal monthly payments must commence immediately upon confirmation and continue until the allowed secured claim is paid in full–has been rejected by several other courts.  For example, in In re DeSardi, 340 B.R. 790 (Bankr. S.D. Tex. 2006), the court held that section 1325(a)(5)(B)(iii)(I) required payments to be equal once they begin, and to continue to be equal until they cease. [9]

Must Cure and Maintenance Payments Be Equal?

A second exception to the anti-modification provision of section 1322(b)(2) is contained in section 1322(b)(5), which provides that the debtor’s plan may “provide for the curing of any default within a reasonable period of time and maintenance of payments while the case is pending on any…secured claim on which the last payment is due after the date on which the final payment under the plan is due.”  This section allows debtors to cure a default on a long-term obligation without having to pay the entire debt balance before the end of the plan term.  Unlike section 1322(c), section 1322(b)(5) does not specifically require compliance with section 1325(a)(5).  The question then is whether secured claims dealt with under section 1322(b)(5) must nevertheless provide equal monthly payments.

In re Davis, 343 B.R. 326 (Bankr. M.D. Fla. 2006), the only decision that directly addresses the issue, holds that subsection 1325(a)(5)(b)(iii)(I) is inapplicable and that equal monthly payments are not required for the cure and maintenance of long-term debts.  In Davis, the debtor relied upon subsection 1322(b)(5) to cure and maintain payments on her mortgage, the last payment for which was due after the due date of the final plan payment.  Her plan proposed to pay the mortgage arrearage at the rate of $0.00 per month for months one through 10, and $122.23 per month for months 11 through 57.[10] After examining the interplay between section 1325(a)(5) and section 1322(b), the court held that section 1322(b)(5) provides an independent basis for treatment of long-term secured debt.  The Davis court also found that the addition of section 1322(e),[11] following the Supreme Court’s decision of Rake v. Wade,[12] had the effect of overriding section 1325(a)(5) when arrears on long-term debt are cured.[13] While the focus of section 1322(e) was to eliminate the present value requirement of section 1325(a)(5)(B)(ii), the statute has been construed more broadly since the introductory language of the section is not limited to 1325(a)(5)(B)(ii) .  Other courts, like Davis, have found that section 1325(a)(5) has no applicability in the cure situation. [14]

The court in Schultz reached the opposite conclusion relying on Wagner and finding that cure and maintenance payments are subject to the equal monthly payment provision of 1325(a)(5)(B)(iii)(I).  Curiously, the court in Schultz engages in a lengthy discussion of the equal monthly payment requirement even though the creditor did not object to the debtor’s plan, and the court found that section 1325(a)(5)(A) was satisfied.  In Schultz, the debtor’s plan provided for monthly payments of $533.24 per month representing principal and interest on a mortgage loan with the unpaid balance of $71,195.68 due at the end of 60 months.  The final scheduled payment under the debtor’s mortgage loan extended beyond the term of the plan, but the balloon payment proposed by the debtor would have paid the loan in full.  Though the debtor’s proposal to pay the mortgage loan in full differed from the facts of the Davis case, where the debtor proposed to simply cure and maintain payments, the Schultz court found this distinction without a difference.  The Schultz court found that mortgage creditors’ claims, regardless of whether the debtor intends to cure or pay in full, are still “allowed secured claims” entitled to treatment under section 1325(a)(5).  The court did not address the fact that 1322(b)(5), unlike 1322(c)(2), does not explicitly require modification pursuant to section 1325(a)(5).  Nor did the Schultz court address the effect of 1322(e) which clearly limits the applicability of 1325(a)(5) to secured claims dealt with under section 1322(b)(5).

Adjusting Mortgage Payments

No case has yet to address the applicability of the equal monthly payment provision to adjustable rate mortgage (ARM) loans or other mortgage loans that may have differing monthly payments over time.  While preemptively delving into the equal monthly payment debate, the Schultz court chose not to wade into the quagmire created by an adjustable rate mortgage.  The court concedes, however, that a mortgage note that provides for interest adjustments might make the payments “not equal.”[15] The same could be true for mortgage loans that require escrow payments.  For the majority of home loans escrow payment amounts are analyzed and adjusted annually.[16] Fluctuation in mortgage payments required by the underlying contract may not be a problem if 1322(b)(5) permits the debtor to cure and maintain payments independently of the requirements of 1325(a)(5).  However, if courts find that section 1325(a)(5)(B)(iii)(I) is applicable to cure and maintenance payments under 1322(b)(5), it would difficult, if not impossible, for debtors to propose a plan that satisfied the requirements of 1322(b) and 1325(a)(5).

Discretion of Chapter 13 Trustee

Another significant point overlooked in many of the cases is that the Chapter 13 Trustee is not bound by the equal payment provision of Code Section 1325(a)(5)(B)(iii).  Sections 1322 and 1325 concern the contents of a plan and what a debtor must do to have a plan confirmed.  The debtor is required to propose a plan that provides for equal monthly payments to secured creditors, if payments are so structured.  The directives relating to the Trustee’s administration of the debtor’s confirmed plan are contained in Section 1326 of the Code and are few, indicating intent of the Congress to repose broad discretion in Trustees for the administration of plans.  Part of this Code-drive discretion concerns the timing of when the payments to the secured creditors under the plan should begin.  See, e.g., In re Butler, 403 B.R. 5, Bankr. L. Rep. 81,470 (Bankr. W.D. Ark., March 17, 2009).  But See In re Hamilton, 401 B.R. 539 (1st Cir. B.A.P., March 6, 2009)(balloon payment violates equal payment requirement despite Trustee’s discretion as to distributions).

Other courts have held that Section 1325(a)(b)(B)(iii) only requires the debtor to make equal monthly payments to the plan, not to a particular creditor.  The Chapter 13 Trustee, however, is not obligated to disburse equal monthly payments to the secured creditors because the Trustee has a duty to pay priority claims.  See, e.g., In re Erwin, 376 B.R. 897 (Bankr. C.D. Ill. 2007); In re Marks, 394 B.R. 198 (Bankr. N.D. Ill. 2008); and In re Hernandez, 2009 WL 1024621 (Bankr. N.D. Ill., April 14, 2009).  But see In re Hamilton, 401 B.R. 539, Bankr. L. Rep. 81,443 (1st Cir. B.A.P., March 6, 2009)(Balloon payment violates equal payment requirement notwithstanding discretion of Trustee).

Plan Modification

Another issue that has yet to be addressed by any court is the effect of the equal monthly payment requirement on plan modification.  Section 1329(a)(1) permits a modified plan to “increase or reduce the amount of payments on claims of a particular class.”  Section 1329(a)(2) allows a modified plan to “extend or reduce the time for such payments…”  However, section 1329(b)(1) requires compliance with section 1325(a).  It seems unlikely that the addition of the equal monthly payment provision was intended to limit modification of plans pursuant to section 1329.  A better interpretation of the relationship between sections 1325(a)(5)(B)(iii)(I) and 1329 is that where section 1325(a)(5)(B)(iii)(I) applies  debtors may modify their plans to increase or reduce the amount of the equal monthly payment, but that the new payment amount must remain equal throughout the remainder of the plan.

However, a number of courts have held that a post-confirmation modification under Section 1329(a) are not impacted by Section 1325(b)(1)(B) due to the failure of Congress to incorporate this section in 1329(a).  See In re White, Case. No. 07-30899, Bankr. W.D.N.C., April 17, 2008)(holding debtor could modify payments to less than 60 months under 1329(a) notwithstanding 60 month commitment period required by B22C and 1325(b)(1)(B)).  See also In re Ireland, 366 B.R. 27 (Bankr. W.D. Ark. 2007)(holding debtors could modify under 1329(a) to reduce dividend to unsecured creditors notwithstanding 1325(b)).

In Ireland, supra, the Court held that the debtors should compare Schedules I & J to determine disposable income in a plan modified pursuant to Section 1329 rather than being bound by the calculations of Form B22C.  Id. at 34.  In that regard, the Court concluded as follows:  “Absent a clear statutory command that 1325(b) applies to modifications under 1329, the Court is not inclined to adopt a tortured view of this statute in order to reach an absurd result.  There is no indication that with the enactment of BAPCPA, Congress intended to repeal, by implication, the provisions of Section 1329. . . .”  Id.

Feasibility Still Matters.

Even if the equal monthly payment provision is found not to apply to a debtor’s situation, a balloon payment plan will still be scrutinized to determine whether it is feasible.   Section 1325(a)(6) requires debtor to demonstrate that they are “able to make all payments under the plan and to comply with the plan.” Under section 1325(a)(6), most courts have framed the feasibility inquiry with respect to balloon payments as one that looks to the totality of the circumstances. While the Bankruptcy Code does not require absolute certainty that a balloon payment will be made, the likelihood of such a payment must be based on more than pure speculation.[17] Courts have enumerated several factors to be considered in balloon payment cases:

1) the equity in the property at the time of filing;

2) the future earning capacity of the debtor;

3) the future disposable income of the debtor;

4) whether the plan provides for the payment of interest to the secured creditor over the life of the plan;

5) whether the plan provides for payment of recurring charges against the property, including insurance, local property taxes and utility charges; and

6) whether the plan provides for substantial payments to the secured creditor which will significantly reduce the debt and enhance the prospects for refinancing at the end of the plan.

If these factors weigh in the debtor’s favor, a balloon payment plan should still be viable under a number of different theories discussed above.

Summary of Argument

As the Court noted in Ireland, supra, the amendments to the Code as implemented by BAPCPA should not be construed to reach what would otherwise be an absurd result.  As noted above, the clear Congressional intent in enacting Section 1325(a)(5)(B)(iii)(I) was to provide for “ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED CREDITORS.”  The Bill makes no reference to mortgage creditors secured by first liens on residential real estate.  Additionally, section 309 of BAPCPA deals almost exclusively with “personal” property.  If Congress had intended this rule to apply to mortgage loans, then the statute and the bill should have so provided.  While there is little legislative history to clarify whether equal monthly payments applies to claims secured by real property, the pre-BAPCPA practices that were seen, by many, as abusive and for which 1325(a)(5)(B)(iii) was intended, related solely to car creditor payments, not to mortgage lenders.

Also, as the Crickmore court noted, a plan provision that eliminated periodic payments by “making one lump sum distribution” to the mortgage creditor, when there were sufficient funds accumulated by the Trustee to satisfy the arrearage claim, was fully consistent with the provisions of Section 132(a)(5).

The issue in any of these cases should focus on feasibility rather than imposing some type of per se ban or prohibition on all balloon payment mortgage plans.  For instance, in Crickmore the Court heard evidence from an experienced mortgage broker that a consumer involved in a Chapter 13 case could not even qualify for a refinanced mortgage until the consumer made at least twelve timely plan payments and direct mortgage payments.  The message is that in order to rebuild a credit history the Chapter 13 debtor needs time to re-establish his or her credit and that the primary focus of the Court should be on the ability of the debtor to do so given the facts of each particular case.

[1] In some cases, the monthly payments represent the monthly post-petition payment due on the mortgage loan plus a small fraction of the arrears with the majority of the arrears being paid through the lump sum payment at the end of the plan.

[2] 11 U.S.C. 1325(a)(6); See In re Wagner, 259 B.R. 694 (B.A.P. 8th Cir. 2001); In re Fanatasia, 211 B.R. 420 (B.A.P. 1st Cir. 1997); In re Endicott, 157 B.R. 255 (W.D. Va. 1993); In re Cloud, 209 B.R. 801 (Bankr. D. Mass. 1997); In re Harris, 199 B.R. 344 (Bankr. N.H. 1996); In re Gregory, 143 B.R. 424 (Bankr. E.D. Tex. 1992); In re Groff, 131 B.R. 703 (Bankr. E.D. Wis. 1991); In re Brunson, 87 B.R. 304 (Bankr. D.N.J. 1988).

[3] See, e.g., In re Andrews, 49 F.3d 1404, 1409 (9th Cir. 1995)(Here, § 1325(a)(5) is fulfilled because subsection (A) was satisfied when the holders of the secured claims failed to object.  In most instances, failure to object translates into acceptance of the plan by the secured creditor.”); In re Szostek, 886 F.2d 1405 (3d Cir. 1989).

[4] See In re Schultz, 2007 WL 128827 (Bankr. E.D. Wis. Jan. 12, 2007)(noting the lack of objection no great surprise since creditor would receive money sooner under balloon plan than it would under an alternative confirmable plan).

[5] See also In re Hill, 2007 WL 499622 (Bankr. M.D.N.C. Feb. 12, 2007)(“When the collateral in question is “personal property,” these subsections must be read together; they require “equal monthly payments” to be made monthly, in equal amounts, and at the minimum level necessary to afford the secured creditor adequate protection.  When the collateral is real property, subsection (II) does not apply and no adequate protection payments are required by Section 1325(a)(5)(B)”).

[6] See In re DeSardi, 340 B.R. 790, 809 (Bankr. S.D. Tex. 2006); Richardo Kilpatrick, Selected Creditor Issues Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 79 Am. Bankr. L.J. 817, 835-36 (2005)(“ In many instances, creditors with a security interest have been required to await payment on their secured claims until after payment of administrative expenses which include unpaid attorneys’ fees. Further, Chapter 13 plans often provided for payment of the current mortgage, payment of the mortgage arrearages, and payments made pursuant to a lease and lease arrearages prior to payments on secured claims. This often resulted in uncompensated depreciation of collateral during the pendency of a Chapter 13 case. In the worst-case scenario, a creditor could wait as long as twenty-four months before receiving any distributions on an allowed secured claim.”).

[7] In relevant part section 1322(c)(2) states:

Notwithstanding subsection (b)(2) and applicable nonbankruptcy law…

(2)  in a case in which the last payment on the original payment schedule for a claim secured only by a security interest in real property that is the debtor’s principal residence is due before the date on which the final payment under the plan is due, the plan may provide for the payment of the claim as modified pursuant to section 1325(a)(5) of this title.

[8] See 8 Collier on Bankruptcy ¶ 1325.06[3][b][ii][A].  Another possible view is that a balloon payment is not one of the “periodic payments,” but rather comes after the periodic payments and therefore does not need to be equal.

[9] See also In re Hill, 2007 WL 499622, *5 (Bankr. M.D.N.C. Feb 12, 2007); In re Blevins, 2006 WL 2724153 (Bankr. E.D. Cal. Sept. 21, 2006)(equal monthly payments not required to be made over the life of the plan).

[10] Though the debtor in Davis did not propose a balloon payment plan, the reasoning of Davis would seem equally applicable where debtor proposes to cure a mortgage arrears in part through a balloon payment.

[11] Section 1322(e) provides that “Notwithstanding subsection (b)(2) of this section and section 506(b) and 1325(a)(5) of this title, 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.”

[12] 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993).

[13] At least one commentator noted that in enacting section 1322(e), Congress appears to have adopted the reasoning of pre-Rake cases that distinguish between cure and modification. Baxter Dunaway, Effect of the Bankruptcy Reform Act of 1994 on Real Estate, 30 Real Prop. Prob. & Tr. J. 601, 612 (Winter 1996).  See also In re Landmark Fin. Servs. V. Hall, 918 F.2d 1150, 1154 (4th Cir. 1990)(“The cure of mortgage or other long term debt is a distinct means of treating the claim of some secured creditors.  Like a cramdown, it may be imposed on creditors without their consent.  It operates, however, in an entirely different manner.”); Shearson Lehmon Mortg. Corp., v. Laguna, 944 F.2d 542 (9th Cir. 1991).

[14] See In re Harko, 211 B.R. 116 (B.A.P. 2d Cir. 1997)(“the introductory language, which specifically references §§ 506(b) and 1325(a)(5), makes clear that these sections have no applicability in a cure situation”).

[15] In re Schultz, 2007 WL 128827 (Bankr. E.D. Wis. Jan. 12, 2007).

[16] See 12 U.S.C. § 2609; Reg. X., 24 C.F.R. § 3500.17.

[17] See In re Wagner, 259 B.R. 694, 701 (B.A.P. 8th Cir. 2001); In re Fanatasia, 211 B.R. 420, 423 (B.A.P. 1st Cir. 1997).