UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

COVINGTON DIVISION

IN RE:

DENISE ANN MOORE CASE NO. 00-20828

DEBTOR

OPINION AND ORDER

This matter is before the court upon motion by the debtor herein to enforce a reaffirmation agreement, and the motion by creditor, Citimortgage, formerly known as Fidelity National Foreclosure Solutions, to clarify and interpret the reaffirmation agreement between the parties, permit resumption of a pending foreclosure proceeding in state court, or, alternatively, to declare the reaffirmation agreement void. The parties filed supplemental briefs after the court=s hearing on the motions on April 10, 2001.

After the debtor filed the present bankruptcy case, the debtor and creditor entered into a timely reaffirmation agreement which is contained in the record herein. That agreement was executed by the debtor on June 19, 2000 and by the creditor, Citimortgage, on June 14, 2000. At the time this bankruptcy case was filed, the debtor was apparently substantially in arrears in payments under the original terms of the note and mortgage. After the execution of the reaffirmation agreement, the debtor tendered and the creditor accepted three monthly payments in the amount of $693 each. Three subsequent payments were apparently tendered and rejected by the creditor and demand was made for the debtor to cure the arrearage on the mortgage which appears to be $15,505.40.

The question here involves the interpretation of the reaffirmation agreement. That agreement appears to have been drafted by the creditor and any ambiguities therein should be interpreted against the creditor.

Case law makes plain that a reaffirmation agreement may vary or modify the terms of the original note and mortgage or may simply adopt those terms. In re Moore, 50 BR 301 (Bankr. S.D. Ohio 1985). In re Hotujac, 102 BR 733 (Bankr. W.D. Missouri 1989).

The reaffirmation agreement in question here restates the unpaid principal amount in the amount of $71,003.04 and the debtor promises to make payments in the amount of $693, which apparently, was the original payment amount in the note and mortgage. The third paragraph of the reaffirmation agreement clearly adopts all of the covenants, terms and conditions of the original note and mortgage. The fifth paragraph of the reaffirmation agreement appears to be the source of the plaintiff=s contention that the reaffirmation agreement was effectively an extension of the loan for the period of time necessary to pay the uncured arrearage. That paragraph reads as follows:

AFurther, the undersigned agree(s) that upon an uncured default of any one installment for a period or more than thirty (30) days, the entire balance herein reaffirmed shall be immediately due and payable.@

Arguably, this paragraph could be construed to reflect a new agreement. However, upon a reading of the instrument as a whole, it is plain to the court that the parties agreed to reaffirm the old obligation with all of its original terms and the language of the fifth paragraph appears to the court to be only a statement of terms of default. To the extent that such terms of default differ from the original mortgage, the terms of the reaffirmation agreement would control. It does not, however, cure or waive the already existing default at the time of the reaffirmation.

Accordingly, the reaffirmation agreement appears to have been breached by the debtor by her failure to comply with the terms of the original note and mortgage by curing the arrearage therein.

It is, accordingly, ORDERED AS FOLLOWS:

1) That the creditor, Citimortgage, should be permitted to proceed with the foreclosure proceeding which it has filed in state court; and

2) It is further ordered that the motion by the debtor herein to enforce the reaffirmation agreement, to the extent that it seeks a different interpretation of the reaffirmation agreement, be, and the same hereby is, OVERRULED.

Dated this day of April, 2001.

BY THE COURT

JUDGE

COPIES TO:

James Patrick Dady, Esq.

L. Craig Kendrick, Esq.

Trustee

Debtor