USCA1 Opinion

United States Court of Appeals

For the First Circuit

____________________

No. 95-1956

LOMAS MORTGAGE, INC.,

Appellant,

v.

ESPERANDIEU & ANTONINE LOUIS,

Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Edward F. Harrington, U.S. District Judge]

___________________

____________________

Before

Lynch, Circuit Judge,

_____________
Aldrich and Bownes, Senior Circuit Judges.
_____________________

____________________

John J. Monaghan, with

_________________
Powers & Needham, P.C. were
_______________________

whom Deborah Paige Stone and

____________________
on brief, for

Sherbur
_______

appellant Lomas Mortga

Inc.
Gary Klein, with
___________
Albiani
_______

whom National Consumer Law Center,

______________________________

and Joseph G. Albiani and Associates

___________________________________

were on

Joseph
______
brief,

appellees Esperandieu and Antonine Louis.

____________________

April 18, 1996

____________________

LYNCH, Circuit Judge.

LYNCH, Circuit Judge.
______________

At issue is

the important

question of whether

U.S.C.

1322(b)(2) of the Bankruptcy

1322(b)(2),

prevents

"stripping down" their

debtors

reside in

Chapter

13

debtors

primary residence mortgages

a multi-family

house.

Code, 11

from

when the

"Stripping down"

would advantage such homeowners by permitting them to cap the

dollar amount of

the security

interest in the

home to

the

home's actual value rather than the higher amount of the note

itself.

The difference

would be treated as unsecured

debt.

That advantage is denied to resident single-family homeowners

by

1322(b)(2).

This case

"strip

thus raises the question

down"1 protections

residing in

which Congress

single-family homes,

of whether the

denied to

in order to

owners

encourage the

flow of residential mortgage funds, are nonetheless available

to owner

occupants of

multi-family housing.

Congress intends exactly such

antimodification provision

modification of a secured

which

one unit is

We hold

that

different results and that the

of

1322(b)(2)

does

claim on a multi-unit

the debtor's principal

not

bar

property in

residence and the

security interest extends tothe other income-producing units.

____________________

1.

The term "strip down" is a colloquialism used to describe

the

process by which a secured creditor's lien is limited to

the market value of its collateral.

also commonly used to

The term "cram down" is

describe this process.

See,
___

e.g., In
____ __

re Wilson, 174 B.R. 215, 218 n.2 (Bankr. S.D. Miss. 1994); In
_________
__
re Lutz, 164 B.R.
_______

239, 241 (Bankr. W.D. Pa.

other grounds, 192 B.R. 107 (W.D. Pa. 1995).

_____________

1994), rev'd on
________

-22

Esperandieu and Antonine

home

Louis own a

three-family

at 221 Spring Street in Brockton, Massachusetts.

Mortgage,

Inc. holds

mortgage secures a

$159,300.

The

the

mortgage on

note executed on

mortgage is

in the

the

property.

February 19, 1987,

standard FNMA

Lomas

The

for

form for

single-family dwellings, with the standard FNMA one- to four-

family rider, including

an assignment of rents.

hold a one-half interest

owned

by Mr.

in the property.

Louis's brother,

The Louises

The other half is

who occupies a

second unit.

The third unit is leased to tenants.

Between

filing

of

the

Massachusetts

resulted

in

time of

bankruptcy

suffered a

unemployment,

defaulted

foreclosure

the

harsh

common.

meet

note held

proceedings.

mortgage and

January

in

The

realities.

The Louises

1995,

recession

values,

The

Eventually,

Lomas,

the

in

Louises'

and foreclosures in

their mortgage

by

22,

property

Brockton was not immune

could not

on

1987

petition on

decline

other

neighborhood became

themselves

the

severe recession.

general

and

neighborhood in

the

the

the

Louises

payments.

and Lomas

filed

They

started

voluntary

petition under Chapter 13, and the foreclosure was stayed.

The Louises then moved to bifurcate or "strip down"

Lomas's

claim into a secured

the property,

agreed to be

claim for the

actual value of

$80,000, and an

unsecured claim

-33

for the balance, citing 11 U.S.C.

could

not take

security

the

advantage of

506(a).2

The

Louises

506(a), however,

if Lomas's

for the note extended only to real property that is

Louises'

principal

residence.

That

is

because

1322(b)(2), which governs Chapter 13 plans, provides:

(b) Subject to subsections (a) and (c) of

this section, the plan may --

(2)

modify

holders

of

the

rights

secured

of

claims,

other than a claim secured only

_______________________________
by a security interest in real
_______________________________
property that is the debtor's
_______________________________
principal
residence,
_____________________

or

of

holders of unsecured claims, or

leave unaffected

the rights of

holders of any class of claims.

11 U.S.C.

1322(b)(2) (emphasis supplied).

The Supreme

language

of

Court has

1322(b)(2),

held that the

called

an

"other than"

"antimodification

____________________

2.

Section 506(a) provides, in pertinent part:

An allowed claim of a creditor secured by

a lien

on property

in which

the estate

has an interest . . . is a secured

to

the

extent

creditor's

of

the

interest

value

in

the

claim

of

such

estate's

interest in such property . . . and is an

unsecured
value
is less

claim to

the extent

of such creditor's

that the

interest . . .

than the amount of

such allowed

claim.

11
a

U.S.C.

506(a).

creditor's secured

collateral.

Section 506(a) allows a debtor to limit

claim to

Any amount of

the value of

the secured claim

value of the collateral becomes unsecured.

a general
and thus

provision under Chapter

5 of the

is applicable to individual

the underlying
exceeding the

Section 506(a) is
Bankruptcy Code

bankruptcy cases under

Chapter 13.

See 11 U.S.C.
___

103(a).

-44

provision," In re Hammond, 27
______________

bars

bifurcation

where

secured only by a lien

the

F.3d 52, 55

creditor's

(3d Cir.

1994),

secured claim

"is

on the debtor's principal residence."

Nobelman v. American Sav. Bank, 508 U.S. 324, 332 (1993).

________
__________________

In

Nobelman, the
________

modify

debtors'

Supreme Court addressed

home

mortgage

owner-occupied

a Chapter 13

lender's secured

condominium.

claim

The

plan to

on

joint

debtors

owed

$71,335 in principal, interest, and fees under a note payable

to

the

lender

condominium.

monthly

and

The debtors'

payments required

value of

The lender

of

by the

objected

deed of

note

trust

up to

relying on

the lender's

506(a) notwithstanding,

from

by

on

Chapter 13 plan proposed

the residence, and,

the remainder of

326.

secured

to make

$23,500, the

506(a),

to treat

claim as unsecured.

to

the plan,

the

Id.
___

asserting

at

that,

1322(b)(2) prohibited the debtors

modifying its rights under the note secured by the deed

trust

on

the

condominium.

Although

noting

that the

debtors were

in

order

secured

correct to seek valuation

to determine

claim,

the

determination under

the

'rights' the

protected by

whether the

Court

506(a)

bank

held

lender

that

506(a)

in fact

the

held a

valuation

"does not necessarily mean that

enjoys

1322(b)(2), are

its secured claim [under

pursuant to

as

limited by the

506(a)]."

-55

a mortgagee,

Id. at 329.
___

which

are

valuation of

Determining that the term "rights"

refers

to

rights

reflected

in

the

instrument enforceable

by state law,

1322(b)(2)

the

prohibited

lender's claim into

331-32.

Because

debtor

in

1322(b)(2)

relevant

mortgage

the Court held

from

that

bifurcating

secured and unsecured portions.

the

contained in a unitary

lender's

contractual

Id. at
___

rights

note, it would be impossible

the

were

for the

debtor to modify the rights of the lender as to the unsecured

portion

of its claim without also modifying the terms of the

secured

component.

Id.
___

Thus,

the

court held,

"to give

effect to

506(a)'s valuation

claims through

propose

holder

a Chapter 13

would require

and

bifurcation of

plan in the

manner petitioners

a modification of

of the security interest."

secured

the rights

of the

Id. at 332. Thus Nobelman

___
________

provides that if a lender's claim "is secured only by

on the debtor's principal residence," id.,

___

a lien

bifurcation under

506(a) will, in most cases, be prohibited.

Nobelman,
________

what secured claims

security

principal

interest

however, did not address the question of

would be considered

in real

residence."

noted that one

11

"secured only by

property

that

is the

U.S.C.

1322(b)(2).

of the purposes of the provision

debtor's

Nobelman
________

was to give

special protection to home lenders

flow

508

in order to encourage the

of capital into the home lending market.

U.S. at 332 (Stevens,

See Nobelman,
___ ________

J., concurring) (citing Grubbs v.

______

-66

Houston First Am. Sav. Ass'n, 730 F.2d 236, 245-46 (5th Cir.
_____________________________

1984)).

The

precise question of whether home

lenders whose

security interest extended beyond the principal residence

other

property or

principal

other income-producing components

residence

could

be

considered

to

have

to

of the

claims

secured "only by a security interest in real property that is

the debtor's principal residence" was not raised in Nobelman.

________

This case raises that question.

In

Louises

their motion before

argued

1322(b)(2), as

security

the

antimodification

had

on 221

interest extended

court, the

provision

interpreted by Nobelman, did

________

interest Lomas

Lomas's security

including

that

the bankruptcy

of

not reach the

Spring Street

because

to the

entire property,

the income-producing components.

Lomas objected,

arguing

that

1322(b)(2)'s

applied because its

Street

and

address.

the

antimodification

security interest was only on 221 Spring

property

included

The bankruptcy court

order

and Lomas

the

Louises' principal

agreed with the

allowed the motion to bifurcate.

the

provision

appeals.

Louises and

The district court affirmed

Review

court's conclusion of law is de novo.

__ ____

of the

bankruptcy

See In re Winthrop Old

___ __________________

Farm Nurseries, Inc., 50 F.3d 72, 73 (1st Cir. 1995).

____________________

The

Street.

Louises' "principal

Were

the

property

residence" is

single-family

1322(b)(2)'s antimodification provision surely

-77

221 Spring

house,

would apply

and bar bifurcation,

not extend

27

to any other property.

F.3d 52

personal

assuming Lomas's security interest

(3d

Cir. 1994)

property

within

See, e.g., In re Hammond,

___ ____ _____________

(note secured

the

did

home

is

by

home and

outside

scope

by

of

antimodification provision); see also 5 Collier on Bankruptcy

___ ____
_____________________

1322.06[1][a], at 1322-21 to 1322-23 (Lawrence P. King ed.,

15th ed. 1995) (a claim secured by any other real property or

by

personal property of the estate or debtor, or by personal

property of another may be modified by the Chapter 13 plan).

Starting,

1322(b)(2),

see
___

as they

should,

with the

language

Consumer Prod. Safety Comm'n

_______________________________

v.

of

GTE
___

Sylvania, Inc., 447 U.S. 102, 108 (1980) ("the starting point
______________

for

interpreting a

itself"),

Lomas

statute is the

and

the

language of

Louises

the statute

present

competing

constructions of

the statutory language.

Lomas argues that

the

modifies "by

interest

term "only"

property"

and

the

term

a security

"that is

the

debtor's

residence" further modifies "real property."

results

in

1322(b)(2)

applying when

(1)

in real

principal

Lomas's reading

the

security

interest

is only in

intangible

or

property is

reading,

real property (as

other non-real

property)

opposed to personal,

and

the "debtor's principal residence."

there is no need

that the real

the debtor's principal residence.

-88

(2) the

real

Under this

property be "only"

The

modifies

in contrast,

the entire phrase

property that

that the

Louises,

argue (1)

"by a security

is the debtor's principal

word "is" requires complete

that "only"

interest in real

residence"; and (2)

and exclusive identity

between "real property" and "principal residence."3

Lomas criticizes the Louises' reading on the ground

that the

the

statutory language

real

property

principal

residence.

must

The

does not explicitly

be

"exclusively"

the

state that

debtor's

Louises criticize Lomas's reading

on the ground that the statutory language does not explicitly

state

that

the

real

property

must

merely

"contain"

or

"include" the principal residence.

The

"plain

meaning"

approach

to

1322(b)(2)

appears to us to be, in

terms could

the end, inconclusive.

(as Lomas claims)

distinguishing

security

serve the limited

interests

security interests in personal or

could also

(as the

The disputed

in

real

purpose of

property

other property.

Louises claim)

serve

But

the more

from

they

general

____________________

3.

The

Louises' reading

case law.

approach preferred

See In re Adebanjo, 165 B.R. 98,

___ _______________

Conn. 1994)

(collecting cases);

B.R. 718, 720

to extend

is the

in the

104 (Bankr. D.

accord In re McGregor, 172

______ _______________

(Bankr. D. Mass. 1994) ("If [Congress intended

1322(b)(2) to multi-unit buildings,] the

should refer to real

statute

property that 'includes' the residence.

Instead, the word 'is' appears, which more aptly describes an

equivalence between the real

estate and the residence."); In

__

re Legowski, 167
____________

714-15 (Bankr.

(employing
Guilbert,

same

B.R. 711,
plain

165 B.R.

meaning

88, 90

D. Mass.

argument); but see

________

(Bankr. D.R.I.

1994)
In re
______

1994) (rejecting

________
that

plain meaning

approach), rev'd on other grounds, 176

________________________

B.R. 302 (D.R.I. 1995).

-99

purpose of distinguishing lenders secured only by a principal

residence from lenders who may have additional security.

In re Legowski, 167 B.R. 711,

______________

Cf.
___

714 n.9 (Bankr. D. Mass. 1994)

("Meaning

is

always

interpretation.").

plain

to

the

proponent

of

an

"When ambiguity is identified, a dispute

about a statute's or

regulation's proper construction cannot

be resolved simply by placing the gloss of 'plain meaning' on

one

competing interpretation."

Massachusetts v. Blackstone
_____________
__________

Valley Elec. Co., 67 F.3d 981, 986 (1st Cir. 1995).

________________

Given

the

lack

legislative

history

O'Neil,
______

F.3d 292,

11

legislative

297-98

is

proper

(1st

meaning,

See
___

we

turn

to

United States
_____________

v.

Cir. 1993)

where "there

the meaning of statutory

legislative history of

the issue.

plain

for guidance.

history

disagreement" over

of

1322(b)(2) does

(resort

to

room

for

language).

The

is

not clearly resolve

Section

1322(b)(2)

Bankruptcy Code of 1978.

was

enacted

Congress created

States.

report

its findings

draft bill.

was the

It

In 1973 the

Section 6-201(2)

and

that a

plan

the Bankruptcy

Commission issued a

recommendations

and a

of the Commission's draft bill

predecessor of what eventually

provided

of the

began in 1970, the

the Commission on

Laws of the United

containing

part

The Bankruptcy Code of 1978 was the

culmination of a legislative process that

year the

as

under

-1010

became

Chapter

13

1322(b)(2).

"may

include

provisions dealing with

severally,

defaults

claims secured by personal

on any terms, and

within a

may provide for

reasonable

time and

the curing of

otherwise alter

modify the rights of the holders of such claims."

the Commission on

H.R.

Doc.

(1973).

The focus

claims

secured by

have

left

the Bankruptcy Laws of

No. 137,

largely

93d Cong.,

of this provision was on

untouched

or

Report of

the United States,

1st Sess.,

personal property.

property

It

then existing

pt. II,

at 204

modification of

apparently would

law

in

which

security interests

in real

provisions of Chapter

property were excluded

XIII.

See id. pt. I,

___ ___

from the

at 165 (stating

that claims that may be dealt with under Chapter XIII include

secured

and unsecured

estates

in real

claims,

property or

but that

claims secured

"chattels real"

by

were excluded

from Chapter XIII).4

But the

bill as

reported out

8200, had quite different language in

proposed

by the

Commission Report.

of the House,

H.R.

1322(b)(2) than that

H.R. 8200

provided in

1322(b)(2) that a debtor's plan might "modify the rights of

holders of secured claims or of holders of unsecured claims."

See H.R.
___

8200, 95th

Cong., 1st

Sess.

1322(b)(2) (1977).

____________________

4.
plan

The

Commission did

may include

provide in

provisions

reasonable time on claims

residence.
Laws

See Report on
___

section 6-201(4)

for curing

that a

defaults within

secured by a lien on
the Commission on

the debtor's
the Bankruptcy

of the United States, H.R. Doc. No. 137, 93d Cong., 1st

Sess., pt. II, at 204.

-1111

Although the accompanying

House Report did not

specifically

state

that this

language

would allow

for modification

of

secured claims in real as well as personal property, see H.R.

___

Rep.

No. 595, 95th Cong.,

does not

1st Sess. 124

suggest that the

(1977), the report

term "claim" which

quite broad application, should

otherwise has

somehow be limited to claims

in personal property in this context.

H.R. 8200 was passed

Senate,

but

the

Senate

by the House and sent

chose

to consider

S. 2266, which had been reported out

Committee on July

14, 1978.

of

holders

secured

unsecured

of

secured

by mortgages

claims."

real property)

S.

2266,

1322(b)(2) in

plan may "modify the rights

claims (other

on

simultaneously

of the Senate Judiciary

The version of

S. 2266 provided that a debtor's

to the

95th

than

or

claims

wholly

of holders

Cong.,

2d

of

Sess.

1322(b)(2) (1978).

This language, which would preclude modification of

any claim wholly secured

to have been the

before

Senate

effect

that

H.R.

by a real estate mortgage,

product of testimony given

Judiciary Committee

8200 would

cause

appears

during hearings

subcommittee

"residential

to

the

mortgage

lenders to be extraordinarily conservative in making loans in

cases where the general financial resources of the individual

borrower are

not particularly strong."

See Hearings Before

___

the Subcomm. on Improvements of the Judicial Machinery of the

-1212

Senate

Comm.

on the

Judiciary, 95th

(1977) (statement of Edward

Real

Estate

recommended

least,

Div., Mass.

Cong., 1st

Sess. 707

J. Kulik, Senior Vice President,

Mut. Life

Ins.

Co.).

Mr. Kulik

that H.R. 8200 should be changed so that, at the

"a mortgage

on real

property other

property may not

be modified."

was specifically

asked

about

than investment

Id. at 714.
___

the effect

When Mr. Kulik

of

the

bill

on

individual

home

mortgages

(as

opposed to

its

effect

on

limited partnerships), Mr. Kulik's attorney, Robert O'Malley,

asked

to speak and said, "savings and loans will continue to

make

loans to individual

be,

believe,

homeowners, but they

extraordinarily

conservative than they are now

will tend to

conservative

and

more

in the flow of credit."

Id.
___

at 715.

The final

8200 and

S. 2266

H.R. 8200)

series of

process,

were

shaped into

agreed-upon floor

the

estate

Senate

and

1322(b)(2)

(passed by the

modifications would

real

version of

backed

Senate as an

amendment to

compromise bill

through

amendments.

off

more

As

its

be permitted of any

agreed to

came after H.R.

part of

position

that

that

no

mortgage secured by

limited

antimodification

language for

on

claims

1322(b)(2).

"secured only

Modification would not be allowed

by

-1313

security interest

in

real

property

that

U.S.C.

is the

debtor's

principal

residence."

11

1322(b)(2).5

This

with

legislative history

does

tend to

show that

1322(b)(2) Congress wanted to benefit the residential

mortgage market as opposed to the entire real estate mortgage

market.

It also

might suggest that a distinction

drawn between the residential

for

investment

property.

should be

mortgage market and the market

Nevertheless,

the

legislative

history does not state with clarity how a mortgage on a mixed

property,

one

with

both

characteristics, should be

over

estate

whether to

treated.

protect all

lenders and

residential

residential

mortgages,

While

and

investment

Congress debated

real estate lenders or no real

eventually

compromised on

protecting

Congress did not focus on what to do

in the multi-family context.

____________________

5.

The explanatory

noting the

statement

Senate's compromise

of

the provision,

on the mortgage

issue, does

not state the extent of the compromise:

Section 1322(b)(2) of the House amendment

represents a compromise agreement between
similar

provisions in the House bill and

Senate

amendment.

Under

the

House

amendment, the plan may modify the rights

of holders of secured claims other than a
claim secured
real

property

by a security
that

is

principal residence.

interest in

the

debtor's

It is intended that

a claim secured by the debtor's principal

residence

may

be

treated

section

1322(b)(5)

of

with

under

the

House

amendment.

124 Cong. Rec. H11106 (daily ed. Sept. 28, 1978).

-1414

while

Lomas

specific evidence

Lomas, it

suggests

family house is

is

no

in the legislative history.

is enough that

mortgage lenders.

that there

Lomas

Congress intended to

need for

such

According to

protect home

argues that a mortgage on

a three-

just as much a "home" mortgage as a mortgage

on a single-family house, and that any distinction

three-family and one-family for

between a

these purposes is arbitrary.

If one accepts this premise,6

Lomas's point has some

If the antimodification provision

force.

is meant to encourage home

lending,

then excluding

multi-family

houses would

harm (in

relative terms) those purchasing

tend to

property in urban

neighborhoods, where owner-occupied multi-unit

housing would

tend to be more common, and to favor those purchasing single-

family

homes, more common in

lenders would

the case of

suburbia.

face relatively

default in

The

more risk of

urban areas, and

certainly

antimodification

does

provision

not
___

of

show

modification in

interest rates

loans in those areas would rise accordingly.

history

theory is that

on

The legislative

Congress

1322(b)(2)

intended

to

suburbanites to a greater degree than city dwellers.

the

benefit

Still,

the legislative

history is

silent on

scope of the incentive Congress wished to give home

Congress

certainly could have

the

lenders.

viewed single-family homes as

____________________

6.

The Louises dispute this assertion.

underwriting

practices for

two-

They claim

to four-family

different from those for single-family houses.

-1515

that the
houses are

less likely to be secured by other collateral, such as rents,

than

common

multi-family

in

resides is

properties.

cities and

Further,

condominium

condominiums are

in which

the

debtor

covered by the antimodification provision.

Nobelman, 508
________

U.S. at 332.

See
___

This blunts some of the force of

Lomas's claim that the Louises' interpretation would create a

disparate

and

perhaps

unfair

application

of

the

antimodification provision.

Additionally,

provision

to

difficult

line-drawing

extending

multi-family

the

houses

problem.

would

It

intended the antimodification provision

apartment complex

antimodification

also

create

is unlikely

Congress

to reach a

100-unit

simply because the debtor lives

in one of

the

units.

Limiting

single-family

the

antimodification

dwellings creates

a more

provision

to

easily administered

test.

We

question here

are left

from either

legislative history

from

in

then

of

another source:

without clear

the

language or

1322(b)(2).

contemporaneous

there is guidance

of 1994, Pub.

4106 (1994) (codified in scattered

U.S.C.).

In those

case law

under Chapter 13 holding

provision

But

did

not

the

the amendments to Chapter 11 contained

the Bankruptcy Reform Act

108 Stat.

guidance on

L. No. 103-394,

sections of 11

amendments Congress referred favorably to

apply

to

that the antimodification

multi-family

housing,

and

-1616

established

that it

wished petitions

under Chapter

11 and

Chapter 13 to treat the matter in the same way.

As part of the 1994 Act and post-Nobelman, Congress

________

added for

the first

provision to Chapter

time a home

11.

mortgagee antimodification

See Pub. L. No. 103-394, Title II,

___

206,

Oct. 22 1994, 108

Stat. 4123 (codified

1123(b)(5)) (a Chapter

11 plan may

at 11 U.S.C.

"modify the rights

of

holders of secured claims, other than a claim secured only by

security interest

principal

in real

residence").

1123(b)(5)

is

The

property that is

the debtor's

antimodification

language

identical to

legislative

history of

deliberately

tracked

1322(b)(2) and

that

of

1123(b)(5)

the

intended

1322(b)(2).

reveals that

antimodification

conformity of

Chapter 13 and Chapter 11:

This amendment conforms the

residential
that

in

mortgages

chapter

13,

treatment of

in chapter
preventing

11 to
the

modification of the rights of a holder of

a

claim

interest
residence.

secured
in

the

only

by

debtor's

security
principal

The

Congress

language

treatment

of

of

between

H.R.

Rep. No. 835, 103d Cong., 2d Sess. 46 (1994), reprinted

_________

in 1994 U.S.C.C.A.N. 3340, 3354.

__

More

importantly,

1123(b)(5) specifies

provision.

provision of

the

the

legislative

limits of

history

of

its

antimodification

That history specifies that the

antimodification

1123(b)(5)

-1717

does
or

not apply to a commercial property,

to

any

creditor
other

transaction

acquired

than real

in

lien

property

which
on

the

property

used

as

the

debtor's residence.

Id.
___

(footnote omitted).

This passage

from the

Judiciary

Committee Report refers to In re Ramirez, 62 B.R. 668 (Bankr.

_____________

S.D.

Cal.

1986), as

an

example

of a

case

in

which the

antimodification

provision of

Chapter 11

would not

See H.R.
___

No.

46 n.13.

Ramirez,
_______

construing

squarely

Report

the

holds

1322(b)(2) does

835

at

antimodification provision

that

the

not apply

antimodification

of

apply.

case

1322(b)(2),

provision

to multi-unit houses

of

where the

security interest extends

clear

becomes

expression

quite

of

to the rental units.7

congressional

strong

that

intent,

Congress

antimodification provision in Chapter

Given this

the

inference

believes

the

13 does not reach such

multi-unit properties.

Cf. 5 Collier on Bankruptcy, supra,

___
_____________________ _____

1322.06[1][a], 1322-23

n.13 (stating that

Ramirez was cited

_______

by Congress in the Bankruptcy Reform Act of 1994 as a correct

statement of the current law of

That this evidence

1322(b)(2)).

from the 1994 Act is

a species

of subsequent, not contemporaneous, legislative history gives

us little pause.

"Although subsequent legislative history is

____________________

7.

In

Ramirez

the

lender

held

security

interest

in

_______
property

that consisted of

and two rental units.

Ramirez do not
_______

the debtor's principal residence

See 62 B.R. at 668-69.

___

appear to be distinguishable in

The

facts of

any relevant

way from the facts here.

-1818

less

authoritative

subsequent

entitled

than

contemporaneous

Congressional declaration of

to

great

weight

in

explanation,

an act's

statutory

intent is

construction."

Roosevelt Campobello Int'l Park Comm'n v. E.P.A.,

________________________________________
______

431,

436-37 (1st

Cir. 1983)

(citing

711 F.2d

Seatrain Shipbuilding
_____________________

Corp. v. Shell Oil Co., 444

_____
_____________

U.S. 572, 596 (1980)).

The 1994

Act evidences

choice on

Congress

a deliberate

under Chapter 11 to

properties

Chapter

security

exclude security interests in multi-unit

like

antimodification

that

here

from

provision based

13's antimodification

interests.

frustrate the

the part of

To

the

on its

reach

such

in debtors' principal residences

so clearly Congress's aim in amending

reach such

evidence

uniform treatment under Chapters 11

secured interests

the

understanding that

provision did not

disregard

of

1123(b)(5).

would

and 13 of

that was

We

hold that

the

antimodification

1322(b)(2) does not bar modification of a

multi-unit property

debtor's

principal

in

which one

residence

and

provision

of

secured claim on

of

the units

the

security

is

the

interest

extends to the other income-producing units.

Because Lomas's

security interest

rental units of

221

Spring

extends to the additional

Street,

the

antimodification

-1919

provision

of

1322(b)(2) does not apply to that interest, and bifurcation

pursuant to

If

506(a) is appropriate.8

we

are wrong

as

to

legislation can provide a correction.

bear their own costs.

____________________

what Congress

Affirmed.
________

intended,

Parties to
___________

____________________

8.

The

holding

Louises
the

inapplicable
Street.

have presented

antimodification
to Lomas's

221 Spring

alternative theory

provision

security

The Louises point out

rents from

an

interest

of

for

1322(b)(2)
in

221

Spring

that Lomas is entitled to the

Street under

an assignment of

rents

provision.

The Louises

the assignment
other,

argue that under

of rents provision is

non-real

property,

and

F.3d at

57.

Lomas

additional security in

that,

antimodification provision would not

Massachusetts law

consequently,

apply.

disputes the Louises'

See Hammond, 27
___ _______
interpretation of

Massachusetts law, however, arguing that in

assignment

of

rents

interest in the real

is

not separate

property.

Massachusetts an

from

In light of

mortgagee's

our disposition

of the case, we need not resolve this question.

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the