Document: 508 U.S. 324 113 S.Ct. 2106 124 L.Ed.2d 228 Leonard NOBELMAN, et ux., Petitioners,v.AMERICAN SAVINGS BANK al. No. 92-641. Argued April 19, 1993. Decided June 1, Syllabus * In their debt repayment plan under Chapter 13 of the Bankruptcy Code, petitioners relied on 11 U.S.C. § 506(a)—which provides, inter alia, that an allowed claim secured by a lien debtor's property "is to extent value [the] property," and unsecured claim" it exceeds value—to propose mortgage principal residence in Texas be reduced from $71,335 residence's $23,500 fair market value. Respondents, lender trustee, objected plan, arguing proposed bifurcation lender's into for effectively worthless modified its rights as homestead mortgagee violation 1322(b)(2), which, among other things, allows "modify holders claims, than only security interest real is residence." The Court agreed with respondents denied confirmation plan. District Appeals affirmed. Held: Section 1322(b)(2) prohibits debtor relying 506(a) reduce undersecured mortgaged residence. Although were correct looking judicial valuation determine status claim, does not necessarily limit "rights [as claim] holde[r]," which are focus 1322(b)(2)'s protection. absence controlling Code definition, must presumed Congress left determination "rights" estate assets state law. Butner v. United States, 440 48, 54-55, 99 914, 918, 59 136. mortgagee's "rights," therefore, reflected relevant instruments, enforceable Those include, others, right monthly installments over fixed term at specified adjustable rates, they protected modification 1322(b)(2). That section's "other than" exception cannot read protect subset "secured claims," determined application 506(a), home. Rather, more reasonable interpretation "a [homestead lien]" referring lienholder's entire including both components, since would impossible petitioners' outstanding without modifying contractual payment amounts, or term. Pp. ____. 968 F.2d 483 (CA5 1992), THOMAS, J., delivered opinion unanimous Court. STEVENS, filed concurring opinion. Philip Palmer, Dallas, TX, petitioners. Michael J. Schroeder, respondents. Justice THOMAS 1 This case focuses interplay between two provisions Code. question whether We conclude therefore affirm judgment Appeals. 2 1984, respondent American Savings Bank loaned Harriet Nobelman $68,250 purchase residence, condominium Texas. exchange, executed rate note payable bank deed trust 1990, after falling behind payments, sought relief proof principal, interest, fees owed note. Petitioners' valued mere $23,500—an uncontroverted valuation—and make payments pursuant contract up amount (plus prepetition arrearages). Relying Code,1 treat remainder bank's unsecured. Under creditors receive nothing. 3 also here, They argued mortgagee, affirmed, re Nobelman, 129 B.R. 98 (ND Tex.1991), did Appeals, (1992). granted certiorari resolve conflict Courts Appeals.2 506 ----, 654, 121 580 II 4 individual debtors may obtain adjustment indebtedness through flexible approved bankruptcy court. 1322 sets forth elements confirmable provide, submission portion future earnings income control trustee supervised period exceeding five years. See §§ 1322(a)(1) 1322(c). provision issue creditors, subject special protection whose claims It provides 5 leave unaffected any class claims." (emphasis added). 6 parties agree proscribes mortgagee. Petitioners maintain, however, proposes no such modification. argue applies holds we look first claim." property"; property, claim."3 contend provided operates automatically adjust downward home before disposition this view, holder $23,500—the collateral property. Because worth terms contract, argue, effects alteration claim. assert, unconditional leftover "unsecured 7 fails take adequate account "rights." modify "claims" by" mortgage. " claims. By virtue petitioners, indisputably was permissible seek proposing states "[s]uch shall . conjunction hearing affecting creditor's interest." But even if accept valuation, still "holder" claim," because retains collateral. componen[t]" States Ron Pair Enterprises, Inc., 489 235, 239, n. 3, 109 1026, 1030 103 290 (1989) (internal quotation marks omitted); mean enjoys limited 8 nowhere defined federal rule, generally assume has "left bankrupt's law," "[p]roperty interests created law." 136 (1979). Barnhill Johnson, 503 112 1386, 1389, 118 39 Moreover, have specifically recognized "[t]he justifications law ownership interests," but "apply equal force interests, mortgagee." Butner, supra, 55, S.Ct., 918. include rates retain until paid off, accelerate loan upon default proceed against foreclosure public sale, bring action recover deficiency remaining foreclosure. Record 135-140 (deed trust), 147-151 (promissory note); Tex.Prop.Code Ann. 51.002-51.005 (Supp.1993). These "bargained mortgagor mortgagee," Dewsnup Timm, 502 773, 778, 116 903 (1992), 9 say, course, mortgagor's bankruptcy. power enforce rights—and, particular, foreclose event default—is checked Code's automatic stay provision. 362. Assn. Timbers Inwood Forest Associates, Ltd., 484 365, 369-370, 108 626, 629-630, 740 (1988). addition, 1322(b)(5) permits cure defaults paying off arrearages life "notwithstanding" 1322(b)(2).4 statutory limitations rights, independent otherwise outside prohibition. 10 urge us apply so-called "rule last antecedent," been some interpret way favor. E.g., Bellamy, 962 176, 180 (CA2 1992); Hougland, 886 1182, 1184 (CA9 1989). According argument, operative clause residence" refer immediate antecedent, Thus, then home—including, respect involved $23,500. acknowledge reading quite sensible matter grammar. compelled. chose use phrase "claim exception, rather repeating art unqualified word "claim" broadly encompass "right payment, secure[d] unsecured" equitable remedy breach performance gives rise unsecured." 101(5) (1988 ed., Supp. III). plausible, components Indeed, itself uses lien" portions latter one, discern how could administered interpretation. collateral, and, same time, insist can do so "as [other] terms." Brief 7. appears impossible. contained unitary once overall components. component, do, component. preserve each having $23,500, dramatically. significant right. Furthermore, mortgage, recalculated rate. There nothing suggests basis recalculating amortization schedule—whether reference face unamortized conundrum alone indicates operate combination manner theorized 12 words, give effect 506(a)'s require interest. where, 14 Affirmed. 15 concurring. 16 At blush seems somewhat strange should provide less individual's retaining possession his her assets. anomaly is, explained legislative history indicating favorable treatment residential mortgagees intended encourage flow capital lending market. Grubbs Houston First Assn., 730 236, 245-246 1984) (canvassing provisions). clear Court's literal text statute faithful intent Congress. Accordingly, I join judgment. syllabus constitutes part prepared Reporter Decisions convenience reader. Detroit Lumber Co., 200 321, 337, 26 282, 287, 50 L.Ed. 499. part, follows: "An creditor estate's Such light purpose 506(a). Four Circuits held under-secured mortgages. 176 Hart, 923 1410 (CA10 1991); Wilson Commonwealth Mortgage Corp., 895 123 (CA3 1990); 1182 As general 13. 103(a). 1322(b)(5), may, "notwithstanding paragraph (2) subsection, curing within time maintenance while pending due date final due."

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