From the Editor – Classification and Cure of Defaults

By The Honorable William Houston Brown (Retired)

Mortgagee not entitled to default interest rate. If state law permits it and contract provides for default interest and if that rate has become payable prepetition, curing the default requires payment of the default rate, but here mortgage provision for default interest rate was not self-operative, giving mortgagee option to declare entire mortgage debt as matured and to demand default rate. In absence of evidence that mortgagee had informed debtor of its prepetition election to accelerate entire debt, the mortgagee was not entitled to 24% default interest. To . . .

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