Court Opinion

ID: 196708
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:12:17+00
Date Added: 2024-06-11T13:11:06.998038
License: Public Domain

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  whom Deborah Paige  Stone and  Sherburne,
                                                                              
Powers  & Needham, P.C. were  on brief, for  appellant Lomas Mortgage,
                               
Inc.
Gary  Klein, with  whom National  Consumer  Law Center,  Joseph G.
                                                                              
Albiani  and Joseph  G.  Albiani and  Associates  were on  brief,  for
                                                        
appellees Esperandieu and Antonine Louis.

                                         

                        April 18, 1996
                                         

          LYNCH, Circuit  Judge.   At issue is  the important
                      LYNCH, Circuit  Judge.
                                           

question of whether    1322(b)(2) of the Bankruptcy  Code, 11

U.S.C.    1322(b)(2),   prevents  Chapter  13   debtors  from

"stripping down" their  primary residence mortgages  when the

debtors  reside in  a multi-family  house.   "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  thus raises the question  of whether the

"strip  down"1 protections  which Congress  denied to  owners

residing in  single-family homes,  in order to  encourage the

flow of residential mortgage funds, are nonetheless available

to owner  occupants of  multi-family housing.   We hold  that

Congress intends exactly such  different results and that the

antimodification provision  of     1322(b)(2)  does  not  bar

modification of a secured  claim on a multi-unit  property in

which  one unit is  the debtor's principal  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.   The term "cram down" is
also commonly used to  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.  1994), rev'd on
                                                                         
other grounds, 192 B.R. 107 (W.D. Pa. 1995).    
                         

                             -2-
                                          2

          Esperandieu and Antonine  Louis own a  three-family

home  at 221 Spring Street in Brockton, Massachusetts.  Lomas

Mortgage,  Inc. holds  the  mortgage on  the  property.   The

mortgage secures a  note executed on  February 19, 1987,  for

$159,300.   The  mortgage is  in the  standard FNMA  form for

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

family rider, including  an assignment of rents.  The Louises

hold a one-half interest  in the property.  The other half is

owned  by Mr.  Louis's brother,  who occupies a  second unit.

The third unit is leased to tenants.

          Between  the  time of  the  1987  mortgage and  the

filing  of  the  bankruptcy  petition on  January  22,  1995,

Massachusetts  suffered a  severe recession.   The  recession

resulted  in  a  general   decline  in  property  values,  in

unemployment,  and  other  harsh  realities.    The  Louises'

neighborhood in  Brockton was not immune  and foreclosures in

the  neighborhood became  common.   Eventually,  the  Louises

themselves  could not  meet  their mortgage  payments.   They

defaulted  on  the  note held  by  Lomas,  and Lomas  started

foreclosure  proceedings.    The Louises  filed  a  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  claim for the  actual value of

the property,  agreed to be  $80,000, and an  unsecured claim

                             -3-
                                          3

for the balance, citing 11 U.S.C.   506(a).2  The     Louises

could  not take  advantage of    506(a), however,  if Lomas's

security  for the note extended only to real property that is

the  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   the  rights   of
               holders   of  secured   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  Court has  held that the  "other than"

language   of     1322(b)(2),  called   an  "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  claim
          to  the  extent  of  the  value  of  such
          creditor's   interest  in   the  estate's
          interest in such property . . . and is an
          unsecured  claim to  the extent  that the
          value  of such creditor's  interest . . .
          is less  than the amount of  such allowed
          claim.

11  U.S.C.   506(a).  Section 506(a) allows a debtor to limit
a  creditor's secured  claim to  the value of  the underlying
collateral.   Any amount of  the secured claim  exceeding the
value of the collateral becomes unsecured.  Section 506(a) is
a general  provision under Chapter  5 of the  Bankruptcy Code
and thus  is applicable to individual  bankruptcy cases under
Chapter 13.  See 11 U.S.C.   103(a).
                            

                             -4-
                                          4

provision," In re  Hammond, 27  F.3d 52, 55  (3d Cir.  1994),
                                      

bars  bifurcation  where  the  creditor's  secured claim  "is

secured only by a lien  on the debtor's principal residence."

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

Nobelman, the  Supreme Court addressed  a Chapter 13  plan to
                    

modify  a  home  mortgage  lender's secured  claim  on  joint

debtors'   owner-occupied  condominium.    The  debtors  owed

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

to  the  lender  and  secured  by  a  deed of  trust  on  the

condominium.  The debtors'  Chapter 13 plan proposed  to make

monthly  payments required  by the  note  up to  $23,500, the

value of  the residence, and,  relying on   506(a),  to treat

the remainder of  the lender's  claim as unsecured.   Id.  at
                                                                     

326.    The lender  objected  to  the plan,  asserting  that,

  506(a) notwithstanding,   1322(b)(2) prohibited the debtors

from  modifying its rights under the note secured by the deed

of  trust  on  the  condominium.   Although  noting  that the

debtors were  correct to seek valuation  pursuant to   506(a)

in  order  to determine  whether the  lender  in fact  held a

secured   claim,   the   Court  held   that   the   valuation

determination under   506(a)  "does not necessarily mean that

the  'rights' the  bank  enjoys  as  a mortgagee,  which  are

protected by    1322(b)(2), are  limited by the  valuation of

its secured claim [under   506(a)]."  Id. at 329.
                                                     

                             -5-
                                          5

          Determining that the term "rights"  in   1322(b)(2)

refers   to  rights  reflected   in  the   relevant  mortgage

instrument enforceable  by state law,  the Court held  that  

1322(b)(2)  prohibited  the   debtor  from  bifurcating   the

lender's claim into  secured and unsecured portions.   Id. at
                                                                      

331-32.    Because  the   lender's  contractual  rights  were

contained in a unitary  note, it would be impossible  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  and  bifurcation of  secured

claims through  a Chapter 13  plan in the  manner petitioners

propose  would require  a modification of  the rights  of the

holder  of the security interest."  Id. at 332. Thus Nobelman
                                                                         

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

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

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

          Nobelman,  however, did not address the question of
                              

what secured claims  would be considered  "secured only by  a

security  interest  in real  property  that  is the  debtor's

principal  residence."   11  U.S.C.    1322(b)(2).   Nobelman
                                                                         

noted that one  of the purposes of the provision  was to give

special protection to home lenders  in order to encourage the

flow  of capital into the home lending market.  See Nobelman,
                                                                        

508  U.S. at 332 (Stevens,  J., concurring) (citing Grubbs v.
                                                                      

                             -6-
                                          6

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  to

other  property or  other income-producing components  of the

principal  residence  could  be  considered  to  have  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  their motion before  the bankruptcy  court, the

Louises  argued  that   the  antimodification  provision   of

  1322(b)(2), as  interpreted by Nobelman, did  not reach the
                                                     

security  interest Lomas  had  on 221  Spring Street  because

Lomas's security  interest extended  to the  entire property,

including  the income-producing components.   Lomas objected,

arguing  that      1322(b)(2)'s  antimodification   provision

applied because its  security interest was only on 221 Spring

Street  and  the  property  included  the  Louises' principal

address.   The bankruptcy court  agreed with the  Louises and

allowed the motion to bifurcate.  The district court affirmed

the  order  and Lomas  appeals.    Review  of the  bankruptcy

court's conclusion of law is de novo.  See In re Winthrop Old
                                                                         

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

          The  Louises' "principal  residence" is  221 Spring

Street.     Were   the   property  a   single-family   house,

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

                             -7-
                                          7

and bar bifurcation,  assuming Lomas's security interest  did

not extend  to any other property.  See, e.g., In re Hammond,
                                                                        

27  F.3d 52  (3d  Cir. 1994)  (note secured  by  home and  by

personal  property  within  the  home  is  outside  scope  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,  as they  should,  with the  language  of

  1322(b)(2),   see  Consumer  Prod.  Safety  Comm'n  v.  GTE
                                                                         

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

for  interpreting a  statute is the  language of  the statute

itself"),   Lomas   and   the   Louises   present   competing

constructions of  the statutory language.   Lomas argues that

the  term "only"  modifies "by  a security  interest  in real

property"  and  the  term  "that is  the  debtor's  principal

residence" further modifies "real property."  Lomas's reading

results  in     1322(b)(2)  applying when  (1)  the  security

interest  is only in  real property (as  opposed to personal,

intangible  or  other non-real  property)  and  (2) the  real

property is  the "debtor's principal residence."   Under this

reading,  there is no need  that the real  property be "only"

the debtor's principal residence.

                             -8-
                                          8

          The  Louises,  in contrast,  argue (1)  that "only"

modifies  the entire phrase  "by a security  interest in real

property that  is the debtor's principal  residence"; and (2)

that the  word "is" requires complete  and exclusive identity

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

          Lomas criticizes the Louises' reading on the ground

that the  statutory language  does not explicitly  state that

the  real  property   must  be  "exclusively"  the   debtor's

principal  residence.  The  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  the end, inconclusive.  The disputed

terms could  (as Lomas claims)  serve the limited  purpose of

distinguishing  security  interests  in  real  property  from

security interests in personal or  other property.  But  they

could also  (as the  Louises claim)  serve  the more  general

                    
                                

3.  The  Louises' reading  is the  approach preferred  in the
case law.   See In re  Adebanjo, 165 B.R. 98,  104 (Bankr. D.
                                           
Conn. 1994)  (collecting cases);  accord In re  McGregor, 172
                                                                    
B.R. 718, 720  (Bankr. D. Mass. 1994) ("If [Congress intended
to extend   1322(b)(2) to multi-unit buildings,] the  statute
should refer to real  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  B.R. 711,  714-15 (Bankr.  D. Mass.  1994)
                        
(employing  same  plain  meaning  argument); but  see  In  re
                                                                         
Guilbert,  165 B.R.  88, 90  (Bankr. D.R.I.  1994) (rejecting
                    
that  plain meaning  approach), rev'd  on other  grounds, 176
                                                                    
B.R. 302 (D.R.I. 1995).

                             -9-
                                          9

purpose of distinguishing lenders secured only by a principal

residence from lenders who may have additional security.  Cf.
                                                                         

In re Legowski, 167 B.R. 711,  714 n.9 (Bankr. D. Mass. 1994)
                          

("Meaning   is  always   plain   to  the   proponent  of   an

interpretation.").   "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  of  plain  meaning,  we  turn  to

legislative  history  for guidance.    See  United States  v.
                                                                     

O'Neil,  11  F.3d 292,  297-98  (1st  Cir. 1993)  (resort  to
                  

legislative  history  is  proper  where "there  is  room  for

disagreement" over  the meaning of statutory  language).  The

legislative history of   1322(b)(2) does  not clearly resolve

the issue.

          Section  1322(b)(2)  was  enacted  as  part  of the

Bankruptcy Code of 1978.  The Bankruptcy Code of 1978 was the

culmination of a legislative process that  began in 1970, the

year the  Congress created  the Commission on  the Bankruptcy

Laws of the United  States.  In 1973 the  Commission issued a

report  containing  its findings  and  recommendations  and a

draft bill.  Section 6-201(2)  of the Commission's draft bill

was the  predecessor of what eventually  became   1322(b)(2).

It  provided  that a  plan  under  Chapter  13  "may  include

                             -10-
                                          10

provisions dealing with  claims secured by personal  property

severally,  on any terms, and  may provide for  the curing of

defaults  within a  reasonable  time and  otherwise alter  or

modify the rights of the holders of such claims."   Report of

the Commission on  the Bankruptcy Laws of  the United States,

H.R.  Doc.  No. 137,  93d Cong.,  1st Sess.,  pt. II,  at 204

(1973).  The focus  of this provision was on  modification of

claims  secured by  personal property.   It  apparently would

have  left  largely  untouched  then existing  law  in  which

security interests  in real  property were excluded  from the

provisions of Chapter  XIII.  See id. pt. I,  at 165 (stating
                                                 

that claims that may be dealt with under Chapter XIII include

secured  and unsecured  claims,  but that  claims secured  by

estates  in real  property or  "chattels real"  were excluded

from Chapter XIII).4

          But the  bill as  reported out  of the House,  H.R.

8200, had quite different language in    1322(b)(2) than that

proposed  by the  Commission Report.   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.  The  Commission did  provide in  section 6-201(4)  that a
plan  may include  provisions  for curing  defaults within  a
reasonable time on claims  secured by a lien on  the debtor's
residence.   See Report on  the Commission on  the Bankruptcy
                            
Laws  of the United States, H.R. Doc. No. 137, 93d Cong., 1st
Sess., pt. II, at 204. 

                             -11-
                                          11

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.,  1st Sess. 124  (1977), the report

does not  suggest that the  term "claim" which  otherwise has

quite broad application, should  somehow be limited to claims

in personal property in this context.

          H.R. 8200 was passed  by the House and sent  to the

Senate,  but  the  Senate  chose  to consider  simultaneously

S. 2266, which had been reported out  of the Senate Judiciary

Committee on July  14, 1978.  The version of    1322(b)(2) in

S. 2266 provided that a debtor's  plan may "modify the rights

of  holders  of  secured  claims (other  than  claims  wholly

secured  by mortgages  on  real property)  or  of holders  of

unsecured   claims."     S.  2266,   95th  Cong.,   2d  Sess.

  1322(b)(2) (1978).

          This language, which would preclude modification of

any claim wholly secured  by a real estate mortgage,  appears

to have been the  product of testimony given  during hearings

before  a  Senate  Judiciary Committee  subcommittee  to  the

effect  that  H.R.  8200 would  cause  "residential  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

                             -12-
                                          12

Senate  Comm.  on the  Judiciary, 95th  Cong., 1st  Sess. 707

(1977) (statement of Edward  J. Kulik, Senior Vice President,

Real  Estate  Div., Mass.  Mut. Life  Ins.  Co.).   Mr. Kulik

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

least,  "a mortgage  on real  property other  than investment

property may not  be modified."  Id. at 714.   When Mr. Kulik
                                                

was specifically  asked  about  the effect  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  homeowners, but they  will tend to

be,   I  believe,   extraordinarily  conservative   and  more

conservative than they are now  in the flow of credit."   Id.
                                                                         

at 715.

          The final  version of   1322(b)(2)  came after H.R.

8200 and  S. 2266  (passed by the  Senate as an  amendment to

H.R. 8200)  were  shaped into  a  compromise bill  through  a

series of  agreed-upon floor  amendments.   As  part of  that

process,  the   Senate  backed  off  its   position  that  no

modifications would  be permitted of any  mortgage secured by

real  estate  and  agreed to  more  limited  antimodification

language for   1322(b)(2).  Modification would not be allowed

on  claims  "secured only  by  a  security interest  in  real

                             -13-
                                          13

property  that  is the  debtor's  principal  residence."   11

U.S.C.   1322(b)(2).5

          This  legislative history  does  tend to  show that

with    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  should be

drawn between the residential  mortgage market and the market

for  investment  property.    Nevertheless,  the  legislative

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

property,   one  with   both   residential   and   investment

characteristics, should be  treated.  While  Congress debated

over  whether to  protect all  real estate lenders or no real

estate  lenders and    eventually  compromised on  protecting

residential  mortgages,  Congress did not focus on what to do

in the multi-family context.

                    
                                

5.      The explanatory  statement  of  the provision,  while
noting the  Senate's compromise  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  by a security  interest in
          real  property  that   is  the   debtor's
          principal residence.  It is intended that
          a claim secured by the debtor's principal
          residence  may  be  treated   with  under
          section    1322(b)(5)   of    the   House
          amendment.

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

                             -14-
                                          14

          Lomas  suggests  that there  is  no  need for  such

specific evidence  in the legislative history.   According to

Lomas, it  is enough that  Congress intended to  protect home

mortgage lenders.  Lomas  argues that a mortgage on  a three-

family house is  just as much a "home" mortgage as a mortgage

on a single-family house, and that any distinction  between a

three-family and one-family for  these purposes is arbitrary.

If one accepts this premise,6  Lomas's point has some  force.

If the antimodification provision  is meant to encourage home

lending,  then excluding  multi-family  houses would  tend to

harm (in  relative terms) those purchasing  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  suburbia.  The  theory is that

lenders would  face relatively  more risk of  modification in

the case of  default in  urban areas, and  interest rates  on

loans in those areas would rise accordingly.  The legislative

history   certainly  does  not  show  Congress  intended  the
                                          

antimodification  provision  of      1322(b)(2)  to   benefit

suburbanites to a greater degree than city dwellers.

          Still,  the legislative  history is  silent on  the

scope of the incentive Congress wished to give home  lenders.

Congress  certainly could have  viewed single-family homes as

                    
                                

6.  The Louises dispute this assertion.  They claim  that the
underwriting  practices for  two-  to four-family  houses are
different from those for single-family houses. 

                             -15-
                                          15

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

than  multi-family  properties.    Further,  condominiums are

common  in  cities and  a  condominium  in which  the  debtor

resides is  covered by the antimodification provision.    See
                                                                         

Nobelman, 508  U.S. at 332.  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,   extending    the   antimodification

provision  to   multi-family  houses  would   also  create  a

difficult  line-drawing  problem.   It  is unlikely  Congress

intended the antimodification provision  to reach a  100-unit

apartment complex  simply because the debtor lives  in one of

the  units.    Limiting  the  antimodification  provision  to

single-family  dwellings creates  a more  easily administered

test.

          We  are left  then  without clear  guidance on  the

question here  from either  the  language or  contemporaneous

legislative history  of   1322(b)(2).  But  there is guidance

from  another source:  the amendments to Chapter 11 contained

in  the Bankruptcy Reform Act  of 1994, Pub.  L. No. 103-394,

108 Stat.  4106 (1994) (codified in scattered  sections of 11

U.S.C.).  In those  amendments Congress referred favorably to

case law  under Chapter 13 holding  that the antimodification

provision  did  not   apply  to  multi-family   housing,  and

                             -16-
                                          16

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  time a home  mortgagee antimodification

provision to Chapter  11.  See Pub. L. No. 103-394, Title II,
                                          

  206,  Oct. 22 1994, 108  Stat. 4123 (codified  at 11 U.S.C.

  1123(b)(5)) (a Chapter  11 plan may  "modify the rights  of

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

a  security interest  in real  property that is  the debtor's

principal  residence").   The  antimodification  language  of

  1123(b)(5)  is  identical to  that  of    1322(b)(2).   The

legislative  history of    1123(b)(5)  reveals that  Congress

deliberately   tracked   the  antimodification   language  of

  1322(b)(2) and  intended  conformity of  treatment  between

Chapter 13 and Chapter 11:

          This amendment conforms the  treatment of
          residential  mortgages  in chapter  11 to
          that  in  chapter   13,  preventing   the
          modification of the rights of a holder of
          a  claim  secured   only  by  a  security
          interest   in   the  debtor's   principal
          residence.

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

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

          More  importantly,  the   legislative  history   of

  1123(b)(5) specifies  the  limits of  its  antimodification

provision.  That history specifies that the  antimodification

provision of   1123(b)(5)

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                                          17

          does  not apply to a commercial property,
          or  to  any   transaction  in  which  the
          creditor  acquired  a  lien  on  property
          other  than real  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  apply.

See H.R.  Report  No.  835  at  46 n.13.    Ramirez,  a  case
                                                               

construing  the  antimodification provision  of   1322(b)(2),

squarely  holds  that   the  antimodification  provision   of

  1322(b)(2) does  not apply  to multi-unit houses  where the

security interest extends  to the rental units.7   Given this

clear  expression  of  congressional  intent,  the  inference

becomes    quite   strong   that    Congress   believes   the

antimodification provision in Chapter  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   1322(b)(2)).  

          That this evidence  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  a  security  interest  in
                           
property  that consisted of  the debtor's principal residence
and two rental units.   See 62 B.R. at 668-69.  The  facts of
                                       
Ramirez do not  appear to be distinguishable in  any relevant
                   
way from the facts here.

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                                          18

less   authoritative    than   contemporaneous   explanation,

subsequent  Congressional declaration of  an act's  intent is

entitled   to  great   weight  in   statutory  construction."

Roosevelt Campobello  Int'l Park  Comm'n v. E.P.A.,  711 F.2d
                                                              

431,  436-37 (1st  Cir. 1983)  (citing  Seatrain Shipbuilding
                                                                         

Corp. v. Shell Oil Co., 444  U.S. 572, 596 (1980)).  The 1994
                                  

Act evidences  a deliberate  choice on  the part of  Congress

under Chapter 11 to  exclude security interests in multi-unit

properties   like   that  here   from   the   reach  of   the

antimodification  provision based  on its  understanding that

Chapter  13's antimodification  provision did not  reach such

security  interests.     To  disregard  such  evidence  would

frustrate the  uniform treatment under Chapters 11  and 13 of

secured interests  in debtors' principal residences  that was

so clearly Congress's aim in amending   1123(b)(5).

          We  hold that  the  antimodification  provision  of

  1322(b)(2) does not bar modification of a  secured claim on

a  multi-unit property  in  which one  of  the units  is  the

debtor's   principal  residence  and  the  security  interest

extends to the other income-producing units.  Because Lomas's

security interest  extends to the additional  rental units of

221   Spring  Street,   the  antimodification   provision  of

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                                          19

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

pursuant to   506(a) is appropriate.8

          If  we  are wrong  as  to  what Congress  intended,

legislation can provide a correction.  Affirmed.  Parties  to
                                                                         

bear their own costs. 
                                

                    
                                

8.  The  Louises  have presented  an  alternative theory  for
holding  the  antimodification   provision  of     1322(b)(2)
inapplicable  to Lomas's  security  interest  in  221  Spring
Street.  The Louises point out  that Lomas is entitled to the
rents from  221 Spring  Street under  an assignment of  rents
provision.   The Louises  argue that under  Massachusetts law
the assignment  of rents provision is  additional security in
other,  non-real  property,   and  that,  consequently,   the
antimodification provision would not  apply.  See Hammond, 27
                                                                     
F.3d at  57.  Lomas  disputes the Louises'  interpretation of
Massachusetts law, however, arguing that in  Massachusetts an
assignment  of  rents  is  not separate  from  a  mortgagee's
interest in the real  property.  In light of  our disposition
of the case, we need not resolve this question.    

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