Court Opinion

ID: 2964080
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:20:06.892743+00
Date Added: 2024-06-11T11:42:50.236387
License: Public Domain

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  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

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                                          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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