The following excerpt is from Hosseini v. Key Bank, N.A. (In re Hosseini), 504 B.R. 558 (B.A.P. 9th Cir. 2014):
However, contracts for the payment of attorney fees upon the default of a debt obligation are void and unenforceable. Id. at 549, 906 N.E.2d 396. It is the settled law of this state that stipulations incorporated in promissory notes for the payment of attorney fees, if the principal and interest be not paid at maturity, are contrary to public policy and void. Id. (quoting Leavans v. Ohio Nat'l Bank, 50 Ohio St. 591, 34 N.E. 1089 (Ohio 1893)(addressing foreclosure actions)). That is, a provision in a mortgage or promissory note that awards attorney fees upon the enforcement of the lender's rights when the borrower defaults, such as a foreclosure action that has proceeded to judgment, is unenforceable. Id. at 550, 906 N.E.2d 396.
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