Ralph Schiano, et ux. v. Wells Fargo Bank, N.A., as Trustee for Park Place Securities, Inc., Asset-Backed Pass-Through Certificates Series 2004-WHQ2

Under Section 9 of the standard form mortgage agreement used by residential lenders nationwide, what is the scope of the lender’s right to recover attorney’s fees from the borrower in a non-default civil lawsuit? a. Can the lender obtain a personal money judgment against the borrower despite the contractual language stating that any attorney’s fees “disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument”? b. Is the lender’s right to recover attorney’s fees triggered when the lender files suit against the borrower to reinstate the mortgage accidentally discharged by the lender’s own servicer? Is that “a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations)”? c. How is a “reasonable” attorney’s fee measured under this provision? To what extent must the fees claimed be linked to the “reasonable or appropriate” actions “to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property”?