§ 79.2 Principal Residence Redefined by BAPCPA

§ 79.2 Principal Residence Redefined by BAPCPA
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 79.2, at ¶ ____, LundinOnChapter13.com (last visited __________).

[1]

It has long been true under § 1322(b)(2) that a Chapter 13 plan cannot modify the rights of a claim “secured only by a security interest in real property that is the debtor’s principal residence.”1 This special protection for real estate loans secured by a debtor’s principal residence has been nibbled at the edges by debtors living in mobile homes, manufactured homes, house trailers and the like.2 The issue often becomes a question of state law: is the debtor’s residence considered to be “real property” under state law? If it is real property and is used as the debtor’s principal residence, then it is eligible for protection from modification in a Chapter 13 case.

[2]

Because the protection from modification in § 1322(b)(2) extends to a claim secured “only” by a security interest in real property that is the debtor’s principal residence, debtors have sometimes overcome the anti-modification provision by proving that the lender’s security interest extends to other property. Property interests that have been found to forfeit the protection from modification in § 1322(b)(2) include an assignment of rents,3 insurance policies, proceeds or premiums,4 bank deposits or escrow account balances5 and rental property or other income-producing property.6 Battles have been fought over the boilerplate in mortgage documents to determine whether furniture, fixtures, equipment, appliances, machinery, easements, appurtenances, mineral rights and the like are real property for purposes of § 1322(b)(2).7

[3]

BAPCPA reached for more protection for claims secured by real property that is a Chapter 13 debtor’s principal residence. “Reached for” is descriptive because it is anything but clear whether any new protection was realized. BAPCPA added a new subsection (13A) to § 101 as follows:

The term “debtor’s principal residence”—

(A) means a residential structure, including incidental property, without regard to whether that structure is attached to real property; and

(B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer.8

[4]

“Incidental property” in new § 101(13A) is further defined in new § 101(27B):

The term “incidental property” means, with respect to a debtor’s principal residence—

(A) property commonly conveyed with a principal residence in the area where the real property is located;

(B) all easements, rights, appurtenances, fixtures, rents, royalties, mineral rights, oil or gas rights or profits, water rights, escrow funds, or insurance proceeds; and

(C) all replacements or additions.9

[5]

The new definition of “debtor’s principal residence” in § 101(13A) placed in context in § 1322(b)(2) would provoke a belly laugh were it not such an important section of Chapter 13. The lobbyists who wrote this part of BAPCPA redefined “debtor’s principal residence” to include all manner of habitation “without regard to whether that structure is attached to real property” and extended the term to include mobile or manufactured homes and trailers; but they left the statutory predicate that the protection from modification in § 1322(b)(2) is available to a claim secured only by a security interest in “real property” that is the debtor’s principal residence.

[6]

After BAPCPA, a residential structure that is not attached to real property can be a debtor’s principal residence, but a debt secured by that structure is protected from modification by § 1322(b)(2) only if it is also “real property.” A debtor’s principal residence now includes all of the incidental property listed in new § 101(27B), but only incidental property that is “real property” retains the protection from modification in § 1322(b)(2).

[7]

Creditors with security interests in mobile homes, trailers and the like will insist that Congress intended to extend the protection from modification in § 1322(b)(2) to collateral that is not necessarily real property under state law. This argument collides squarely with the problem that “debtor’s principal residence” appears other places in the Bankruptcy Code without the “real property” predicate that appears in § 1322(b)(2).10 The new definitions in § 101(13A) and (27B) have application in the Bankruptcy Code other than the less than thrilling impact of the new sections on the protection from modification in § 1322(b)(2).

[8]

The new definition of debtor’s principal residence in § 101(13A) will affect the curing of defaults in Chapter 13 cases under § 1322(c)(1). A Chapter 13 plan can cure defaults with respect to a lien on the debtor’s principal residence under § 1322(b)(3) and (b)(5) until the residence is sold at a foreclosure sale conducted in accordance with applicable nonbankruptcy law.11 The new definition of a debtor’s principal residence will extend this “foreclosure sale” limitation on a Chapter 13 debtor’s power to cure default to residential structures that are not attached to real property and to condominium or cooperative units, to mobile or manufactured homes and to trailers. There will be interesting cases when state law provides a mechanism other than “foreclosure sale” for lienholders to realize on a security interest in a camping trailer or mobile home that the debtor uses as a principal residence.

[9]

The BAPCPA amendments to § 101(13A) remove any doubt that a debtor’s principal residence includes mobile or manufactured homes and trailers that become real property when state law conditions permit. A “residential structure” can be a debtor’s principal residence even if it is not attached to real property, but that residential structure would then be protected from modification only if it is also considered real property under state law. Debtors who live on boats, for example, have occasionally won the argument that the boat is a principal residence for homestead exemption purposes notwithstanding that it is not attached to real property. The BAPCPA amendments to § 101(13A) would extend this logic to the anti-modification protection of creditors in § 1322(b)(2) if state law allows a structure that is not attached to real property to be treated as if it is real property when it is a principal residence.

[10]

The problems with the new definition of principal residence in § 101(13A) have become quickly manifest in reported cases. For example, in In re Moss,12 Green Tree held a perfected security interest in a mobile home that was owned by the debtor and it was undisputed that the mobile home was the debtor’s principal residence. Unfortunately for Green Tree, the debtor did not own the land on which the mobile home was located. The Chapter 13 plan proposed to modify the balance of the debt on the mobile home by bifurcation and cramdown to the value of the mobile home. Green Tree objected to confirmation on the ground that the mobile home was protected from modification by § 1322(b)(2).

[11]

Citing In re Sturgill13 and In re Shepherd,14 Green Tree argued that the antimodification principle in § 1322(b)(2) was extended by the new definition in § 101(13A) to protect claims secured by a principal residence without regard to whether the creditor also had a security interest in the real property on which the mobile home was located. The bankruptcy court found that under Alabama law, the mobile home was considered to be a “motor vehicle” because the mobile home and the real property on which it sat were not titled in the same individual. Citing § 101(13A), the bankruptcy court acknowledged that the mobile home was the debtor’s principal residence for purposes of § 1322(b)(2) notwithstanding that it was a motor vehicle, not real property, under Alabama law. But these two conclusions did not deliver Green Tree protection from modification because a motor vehicle was not real property under Alabama law. As explained by the Moss court:

Section 1322(b)(2) provides that a debtor’s plan may not modify the rights of secured creditors who hold “a security interest in real property that is the debtor’s principal residence.” The terms “real property” and “debtor’s principal residence” are two distinct terms of art that require individual analyses. Whereas the Court must look to state law in determining whether a debtor’s residence constitutes “real property,” the Court must look to Section 101(13A) in determining whether the same property constitutes the “debtor’s principal residence.” Therefore, although a residential structure may constitute a “debtor’s principal residence” under federal bankruptcy law, it does not necessarily constitute “real property” under state law.15

[12]

At least one of the courts cited by Green Tree in Moss bought the proposition that § 101(13A), as amended by BAPCPA, extends the antimodification protection in § 1322(b)(2) to a mobile home without regard to whether the debtor owns or the creditor has a lien on the real property where it is located. In Shepherd,16 EMC had a lien on a mobile home that was the debtor’s principal residence. The debtor did not own and EMC had no lien on the underlying real property. The bankruptcy court found the broad new definition in § 101(13A) produced an absurd outcome if the real property requirement in § 1322(b)(2) was read as a precondition to the protection from modification:

Even a cursory reading of § 1322(b)(2) and § 101(13A) evidences that these statutes are in conflict and cannot be reconciled as written. Section 1322(b)(2) expressly provides that a debtor may not modify a claim “secured only by a security interest in real property that is the debtor’s principal residence,” while § 101(13A) expressly provides that a debtor’s principal residence means the residential structure, including a mobile home, “without regard to whether that structure is attached to real property.” . . . [R]eading the newly adopted § 101(13A) definition of “debtor’s principal residence” in conjunction with § 1322(b)(2) results in an absurdity, because § 1322(b)(2) must now be construed to provide that a debtor may not modify the claims of a creditor holding a security interest in the debtor’s residential structure, including a condominium, cooperative, mobile home, or trailer, irrespective of whether it is attached to the real property, but only if the security interest includes the real property. . . . H.R. Rep. 109-31, Pt. 1, at 72, 109th Cong., 1st Sess. (2005) . . . does . . . provide assistance as it clearly indicates that Congress intended to broaden the scope of what constitutes a “debtor’s principal residence” beyond the “real property” anti-modification limitations of § 1322(b)(2) to include a freestanding “residential structure” such as a mobile home, manufactured home, or trailer. . . . [I]t seems apparent that Congress intended for this definition as set forth in § 101(13A) to apply specifically to the anti-modification provisions concerning home mortgages, thereby broadening the scope of § 1322(b)(2) to prohibit modification of obligations owed to creditors holding security interests in residential structures such as condominiums and mobile homes, despite the fact that a debtor does not own, and the creditor does not hold a lien upon, the real property upon which such structures are located. . . . Whether the creditor does or does not hold a security interest in the real property upon which the structure might be located is immaterial. To hold otherwise would render § 101(13A) meaningless surplusage.17

[13]

Moss and Shepherd obviously take different routes through the interaction of § 101(13A) and § 1322(b)(2). In Moss, the bankruptcy court reads Shepherd to have concluded that Tennessee law treated the mobile home as real property notwithstanding that the debtor did not own any dirt.18 It is not at all clear from the Shepherd opinion that the bankruptcy court read Tennessee law to treat a mobile home as real property. Rather, Shepherd seems to hold that the antimodification protection in § 1322(b)(2) extends to a mobile home newly defined as a debtor’s principal residence without regard to whether that mobile home was “real property” under state law. The expansive reading of § 101(13A) in Shepherd simply stands in contrast to the more rigorous analysis in Moss. The bankruptcy court in Moss gives effect to all of the moving parts in § 101(13A) and § 1322(b)(2) without producing the absurd outcome feared by the bankruptcy court in Shepherd.

1 11 U.S.C. § 1322(b)(2), discussed in § 118.1 [ Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman ] § 79.1 Most Home Mortgages Cannot Be Modified: § 1322(b)(2) and Nobelman.

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2 See § 123.1 [ Mobile Homes ] § 80.7 Mobile Homes.

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3 See § 126.1 [ Claims Secured by an Assignment of Rents ] § 80.10 Claims Secured by an Assignment of Rents.

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4 See § 125.1 [ Claims Secured by Insurance Policies, Proceeds or Premiums ] § 80.9 Claims Secured by Insurance Policies, Proceeds or Premiums.

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5 See § 124.1 [ Claims Secured by Bank Deposits, “Shares” or Escrow Account Balances ] § 80.8 Claims Secured by Bank Deposits, “Shares” or Escrow Account Balances.

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6 See § 122.1 [ Rental Property, Farmland and Other Income-Producing Property ] § 80.6 Rental Property, Farmland and Other Income-Producing Property.

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7 See § 126.2 [ Claims Secured by Fixtures, Furniture, Equipment, Appliances, Machinery, Easements, Appurtenances, Mineral Rights, Water Rights and the Debtor’s First Born ] § 80.11 Claims Secured by Fixtures, Furniture, Equipment, Appliances, Machinery, Easements, Appurtenances, Mineral Rights, Water Rights and the Debtor’s First Born.

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8 11 U.S.C. § 101(13A).

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9 11 U.S.C. § 101(27B).

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10 See, e.g., 11 U.S.C. §§ 1322(c)(1), 522(p)(2)(B).

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11 11 U.S.C. § 1322(c)(1), discussed in § 130.1 [ Prepetition Defaults ] § 82.1 Prepetition Defaults—When is Property “Sold” at Foreclosure?.

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12 No. 07-10126, 2007 WL 1076688 (Bankr. S.D. Ala. Apr. 4, 2007).

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13 337 B.R. 599 (Bankr. W.D. Ky. 2006).

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14 354 B.R. 505 (Bankr. E.D. Tenn. 2006).

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15 2007 WL 1076688, at *2.

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16 354 B.R. 505 (Bankr. E.D. Tenn. 2006).

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17 354 B.R. at 510–12.

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18 Moss, 2007 WL 1076688, at *2 (“In In re Shepherd . . . [t]he court apparently applied Tennessee law in reaching its conclusion that the debtor’s mobile home constituted real property.”).

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Wallingford v. Green Tree Servicing, LLC (In re Wallingford), No. 12-4174, 2013 WL 1777121 (6th Cir. Apr. 26, 2013) (unpublished) (Merritt, Suhrheinrich, Donald) (Applying Reinhardt v. Vanderbilt Mortgage & Finance, Inc. (In re Reinhardt), 563 F.3d 558 (6th Cir. Apr. 29, 2009) (Clay, Gibbons, Greer), mobile home remained personalty and was subject to cramdown under § 1322(b)(2) because title was never surrendered to complete transformation to realty under Ohio law.).

Reinhardt v. Vanderbilt Mortgage (In re Reinhardt), 563 F.3d 558, 564-65 (6th Cir. Apr. 29, 2009) (Clay, Gibbons, Greer) ("Because Ohio state law is clear that Debtors' mobile home is not real property, the bankruptcy court correctly held that it could modify Vanderbilt's secured claim on the mobile home under § 1322(b)(2), despite Vanderbilt's secured interest on both the mobile home and the real property beneath it.").

Ennis v. Green Tree Serv'g, LLC (In re Ennis), 558 F.3d 343 (4th Cir. Feb. 25, 2009) (Niemeyer, Michael, Bennett) (Redefinition of "principal residence" in § 101(13A) did not change real property requirement in antimodification clause in § 1322(b)(2); when manufactured home remained personal property under state law, lien is not protected from modification by § 1322(b)(2)., rev'g No. 07-60738-LYN, 2007 WL 9723544, at *3 (Bankr. W.D. Va. Sept. 28, 2007) (Anderson) Extending Witt v. United Companies Lending Corp. (In re Witt), 113 F.3d 508 (4th Cir. May 21, 1997) (Russell, Michael, Motz), mobile home on rented land is real property that is protected from modification by § 1322(b)(2) notwithstanding taxation as personal property under Virginia law. “Because Congress’ purpose of enacting the anti-modification exception to section 1322(b)(2) was to protect mortgage lenders and because mobile homes are generally financed by mortgage lenders, it is concluded that Congress intended to include mobile homes when it used the term real property in paragraph 1322(b)(2).”).

Pawtucket Credit Union v. Picchi (In re Picchi), 448 B.R. 870, 874-75 (B.A.P. 1st Cir. Apr. 11, 2011) (De Jesús, Kornreich, Tester) (Lomas Mortgage, Inc. v. Louis, 82 F.3d 1 (1st Cir. Apr. 18, 1996) (Lynch, Aldrich, Bownes), was not abrogated by new definitions of "debtor's principal residence" and "incidental property" in BAPCPA; debtor can modify partially secured lien on two-family home. "[I]n the context of § 101(13A), 'residential structure' appears in subparagraph (A), which is qualified by subparagraph (B). . . . The combination of subparagraphs (A) and (B) suggests that the term 'residential structure' may refer to the space encompassing the debtor's actual living unit. . . . '[I]ncidental property' means objects like a 'boiler, the attached garage, [or] the window treatments that are typically listed in a standard mortgage.' . . . The meaning and scope of § 1322(b)(2) have not been altered by the definitions of 'debtor's principal residence' and 'incidental property' introduced by BAPCPA. For the reasons given long ago in Lomas, § 1322(b)(2) does not bar bifurcation of a claim secured by a multi-unit dwelling." BAP reserves question whether Bankruptcy Technical Corrections Act of 2010, Pub. L. No. 111-327, 124 Stat. 3557 (Dec. 22, 2010), would affect this outcome.).

Green Tree Serv'g, LLC v. Coleman (In re Coleman), 392 B.R. 767 (B.A.P. 8th Cir. Aug. 25, 2008) (Kressel, Schermer, Mahoney) (Joining majority, loan secured by manufactured home that remains personal property under state law is not protected from modification by § 1322(b)(2), notwithstanding § 101(13A)(B). "We . . . hold that § 1322(b)(2) is unambiguous and does not prohibit modification of a manufactured home security interest where that interest is not real property. . . . [T]he determination of whether a security interest in a debtor's principal residence may be subject to cramdown turns on whether that residence is real or personal property. . . . The definition of 'debtor's principal residence' in 11 U.S.C. § 101(13A)(B) includes manufactured and mobile homes, but is silent as to whether manufactured and mobile homes are real or personal property. Therefore, we look to the applicable state law to determine whether the debtors' property is real or personal. . . . [T]he home had not been permanently attached to the land and therefore was not real estate under Missouri law."), aff'g 373 B.R. 907, 910-11 (Bankr. W.D. Mo. Aug. 2, 2007) (Mobile home remained personal property under Missouri law and is not protected from modification notwithstanding § 101(13A). "[T]he phrase 'debtor's principal residence' modifies 'real property,' not the other way around. . . . [Section] 101(13A) and § 1322(b)(2) can be read in a manner that gives meaning to every word in both statutes. In many states, including Missouri, a mobile home can be transformed from personal property into real property. . . . [U]nder the plain language of . . . § 1322(b)(2), in order for a secured claim to be included in the coverage of the antimodification provision, the claim must be (1) 'secured only by a security interest in real property' and (2) the real property mortgaged must be the 'debtor's principal residence.' If the manufactured or mobile home is considered to be personal property under applicable state law, the antimodification provision would not apply. . . . [T]he Mobile Home has not been permanently attached to the real estate under [state law]. It is, therefore, personal property and Green Tree's claim can thus be modified under the Debtors' plan.").

Davis v. Green Tree Serv'g, LLC (In re Davis), 386 B.R. 182 (B.A.P. 6th Cir. Apr. 16, 2008) (Parsons, Scott, Shea-Stonum) (Predicate for protection from modification in § 1322(b)(2) is real property that is the debtors' principal residence; remand necessary to determine whether mobile home was real property under state law. "The requirements of the anti-modification provision are found in the plain language of § 1322(b)(2): (1) that the property is real property, (2) that the real property is the debtor's personal residence, and (3) that there is no additional collateral. The addition of the definition of 'debtor's personal residence' affects the second requirement, but does not change the analysis required to address the first requirement."), rev'g, 373 B.R. 46 (Bankr. S.D. Ohio 2007) (Lien secured by real property and by mobile home is protected from modification by § 1322(b)(2) and § 101(13A) notwithstanding that mobile home is not part of real property under Ohio law. "[W]e agree with the [In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006),] decision that § 101(13A) and § 1322(b)(2) can not [sic] be reconciled, that it is appropriate to consider the legislative history of this Code change, and that the legislative history indicates that Congress intended to broaden the scope of § 1322(b)(2) by adding the new definition in § 101(13A).").

Birmingham v. PNC Bank, N.A., Inc., No. 14-00378, 2015 WL 4111645, at *5 (D. Md. July 7, 2015) (Grimm) (Insurance proceeds, escrow accounts and condemnation awards are defined by § 101(13A) to be part of principal residence; security interest in those items does not forfeit protection from modification in § 1322(b)(2). "[T]he definition of a 'debtor's principal residence' under the Code includes not only the home itself, but also 'incidental property,' 11 U.S.C. § 101(13)(A).").

Green Tree Serv'g, LLC v. Harrison, No. 07-2132, 2009 WL 82565, at *2 (W.D. La. Jan. 12, 2009) (Hicks) ("This court now joins a majority of courts holding that § 1322(b)(2) is unambiguous and does not prohibit modification of a creditor's interest in a manufactured home when the mobile home is not considered real property under state law." Because the debtor's mobile home had not been "immobilized" under Louisiana law, it was not real property and was not protected by § 1322(b)(2) notwithstanding the enactment of § 101(13A).).

Fells v. Green Tree Serv'g, LLC, No. 07-2039, 2008 WL 4276075, at *2-*3 (W.D. La. Aug. 12, 2008) (Drell) ("[O]nly a security interest in real property is covered by the non-modification provision of 11 U.S.C. § 1322(b)(2). . . . [W]hether or not the Fells' mobile home is their principal residence is irrelevant to the determination . . . . [I]f the security interest at issue does not involve real property, the debtor's principal residence is irrelevant. . . . [E]ven if the phrase 'debtor's principal residence' were statutorily defined as 'the mobile home belonging to Roy Fells, Jr., and Renetta Britton Fells,' Green Tree still could not assert the anti-modification provision of Section 1322(b)(2) because it still would not have a security interest in 'real property.'".), rev'g No. 07-80559, 2007 WL 3120113, at *5 (Bankr. W.D. La. Oct. 23, 2007) (Citing In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), because mobile home could be claimed exempt under Louisiana law, mobile home is protected from modification by § 1322(b)(2) and § 101(13A). "[I]t is counterintuitive to permit a Louisiana debtor to claim a mobile home located on unowned land as exempt . . . and yet permit the debtor to cramdown a lien on that same property. . . . Considering the combination of the revision of 11 U.S.C. § 101(13A), the reasoning of In re Shepherd line of cases, Congress' recognition of the practical reality of mobile home use, and Louisiana exemption law, this court concludes that a lien on a mobile home that constitutes the debtor's principal residence as defined in 11 U.S.C. § 101(13A) is not subject to modification under 11 U.S.C. § 1322(b)(2).").

Kinder v. Vanderbilt Mortgage & Fin., No. 1:07-cv-564, 2008 WL 2230694 (S.D. Ohio May 28, 2008) (Dlott) (Adopting Davis v. Green Tree Servicing, LLC (In re Davis), 386 B.R. 182 (B.A.P. 6th Cir. 2008) (Parsons, Scott, Shea-Stonum), security interest in real property and in mobile home is not protected from modification by § 1322(b)(2) when mobile home is not real property under state law.).

Shepherd v. EMC Mortgage Corp. (In re Shepherd), 381 B.R. 675 (E.D. Tenn. Feb. 6, 2008) (Phillips) ("Under [the] majority view, courts have determined that [§ 101(13A)] recognizes the reality that a debtor's principal residence may be personal property, as with a mobile home, or situated upon land which the debtor owns, as with a condominium unit. Section 101(13A)(A) thus encompasses all sorts of residential structures, including mobile units, and makes clear that a structure does not have to be attached to real property to be a debtor's principal residence. Yet the antimodification provision simply applies to a subclass of debtors' principal residences as defined by § 101(13A)(A): namely those principal residences which are real property. . . . [T]his court finds that the requirements of the anti-modification provision are 1) that the property in question be real property and 2) that the real property be the debtor's principal residence. . . . In Tennessee, mobile homes are generally considered personal property when not permanently affixed to land. . . . Because the debtor does not own the real property on which it sits and it does not appear to be affixed permanently to the land, this court finds that the mobile home is personal property under applicable nonbankruptcy law. Accordingly, the anti-modification provision of § 1322(b)(2) does not apply."), rev'g 354 B.R. 505, 510-12 (Bankr. E.D. Tenn. Nov. 3, 2006) (Section 101(13A) as amended by BAPCPA extends antimodification protection in § 1322(b)(2) to mobile home without regard to whether debtor owns or creditor has lien on real property. EMC had lien on mobile home that was debtor's principal residence. Debtor did not own and EMC had no lien on underlying real property. "Even a cursory reading of § 1322(b)(2) and § 101(13A) evidences that these statutes are in conflict and cannot be reconciled as written. Section 1322(b)(2) expressly provides that a debtor may not modify a claim 'secured only by a security interest in real property that is the debtor's principal residence,' while § 101(13A) expressly provides that a debtor's principal residence means the residential structure, including a mobile home, 'without regard to whether that structure is attached to real property.' . . . [R]eading the newly adopted § 101(13A) definition of 'debtor's principal residence' in conjunction with § 1322(b)(2) results in an absurdity, because § 1322(b)(2) must now be construed to provide that a debtor may not modify the claims of a creditor holding a security interest in the debtor's residential structure, including a condominium, cooperative, mobile home, or trailer, irrespective of whether it is attached to the real property, but only if the security interest includes the real property. . . . H.R. Rep. 109-31, Pt. 1, at 72, 109th Cong., 1st Sess. (2005) . . . does . . . provide assistance as it clearly indicates that Congress intended to broaden the scope of what constitutes a 'debtor's principal residence' beyond the 'real property' anti-modification limitations of § 1322(b)(2) to include a freestanding 'residential structure' such as a mobile home, manufactured home, or trailer. . . . [I]t seems apparent that Congress intended for this definition as set forth in § 101(13A) to apply specifically to the anti-modification provisions concerning home mortgages, thereby broadening the scope of § 1322(b)(2) to prohibit modification of obligations owed to creditors holding security interests in residential structures such as condominiums and mobile homes, despite the fact that a debtor does not own, and the creditor does not hold a lien upon, the real property upon which such structures are located. . . . Whether the creditor does or does not hold a security interest in the real property upon which the structure might be located is immaterial. To hold otherwise would render § 101(13A) meaningless surplusage.).

Moss v. Greentree-AL, LLC (In re Moss), 378 B.R. 655 (S.D. Ala. Sept. 24, 2007) (Amended definition of "debtor's principal residence" in § 101(13A) did not delete "real property" requirement from § 1322(b)(2). Section 1322(b)(2) "on its face carries two qualifications: first, that the security interest be in real property, and second, that the real property at issue be the debtor's principal residence. By defining 'debtor's principal residence,' Congress addressed the second requirement, but it left the first intact. Thus, however 'debtor's principal residence' is defined it must still constitute 'real property' in order for the no-modification provision to apply. . . . Imposing the definition of 'debtor's principal residence' on Section 1322(b)(2) results only in the unstartling proposition that property can be a debtor's principal residence even if it is personalty, but it cannot be subject to the no-modification provision unless it is realty. There is nothing absurd or illogical about such a state of affairs. Indeed, it is precisely the result the cases reached before the insertion of Section 101(13A)."), aff'g No. 07-10126, 2007 WL 1076688, at *2 (Bankr. S.D. Ala. Apr. 4, 2007) (Mobile home used as principal residence resting on land that debtor does not own is a motor vehicle, not real property under Alabama law; Chapter 13 plan can modify debt secured by mobile home. "[T]he debtor does not own the real property upon which her mobile home sits. Therefore, it is still classified as a 'motor vehicle' under Alabama law. Despite its classification as a 'motor vehicle' under state law, the mobile home nonetheless comprises the debtor's principal residence under federal bankruptcy law. Section 101(13A) defines a 'debtor's principal residence' as 'a residential structure . . . without regard to whether that structure is attached to real property . . . .' Mobile homes are included within the above definition. . . . The terms 'real property' and 'debtor's principal residence' are two distinct terms of art that require individual analyses. . . . [T]he Court must look to state law in determining whether a debtor's residence constitutes 'real property,' the Court must look to Section 101(13A) in determining whether the same property constitutes the 'debtor's principal residence.' . . . [A]lthough a residential structure may constitute a 'debtor's principal residence' under federal bankruptcy law, it does not necessarily constitute 'real property' under state law."). Accord In re Herrin, Nos. 06-12249-WSS-13, 07-10126-WSS-13, 2007 WL 1975573 (Bankr. S.D. Ala. July 3, 2007) ("[Section] 101(13A) and § 1322(b)(2) can be read in a manner that gives meaning to every word in both statutes. . . . Section 101(13A) makes clear that mobile homes, even if not affixed to real property, may be a 'debtor's principal residence' for purposes of § 1322(b)(2). . . . [I]nterpreting §§ 101(13A) and 1322(b)(2) to apply only to mobile homes that are considered real estate under state law does not read language out of the statute.").

Herrin v. Greentree-AL, LLC, 376 B.R. 316, 319 (S.D. Ala. Sept. 24, 2007) (Rejecting In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), security interest in mobile home that is personal property under Alabama law is not protected from modification by § 1322(b)(2) or by § 101(13A). "Section 1322(b)(2) on its face carried two qualifications: first, that the security interest be in real property, and second, that the real property at issue be the debtor's principal residence. By defining 'debtor's principal residence,' Congress addressed the second requirement, but it left the first intact. Thus, however 'debtor's principal residence' is defined, it must still constitute 'real property' in order for the no-modification provision to apply.").

In re Abreu, No. 1-15-44844-nhl, 2017 WL 4286141, at *2–*4 (Bankr. E.D.N.Y. Sept. 26, 2017) (Lord) (First mortgage on real property acquired by debtor without assuming debt is not protected from modification by § 1322(b)(2) because property was investment not principal residence at the petition. “The term ‘debtor’s principal residence’ that appears in § 1322(b)(2) is a defined term within the Code. . . . [W]hether a structure is a debtor’s principal residence is, rather simply, a question of whether it is ‘used as’ such. . . . Though ‘residence’ alone is not defined by the Code, it has been defined elsewhere as ‘the place where one actually lives.’ . . . [A]n individual’s residence becomes her principal residence when that structure, more than any other, is used as a living space. . . . [T]he Court is required to determine the Debtor’s principal residence as of the time of the bankruptcy filing. . . . [A]s of the Filing Date, the Debtor did not live at the Property at all, and had not done so for at least a number of years. . . . [S]ince it was not his residence at all, it could not have been his principal residence for the purpose of § 1322(b)(2).”).

In re Garcia, No. 16-50210-RLJ-13, 2017 WL 2859756, at *2 (Bankr. N.D. Tex. June 30, 2017) (Jones) (After 2005 amendments to definition of “principal residence,” bank with security interest in land but with no interest in mobile home that sits on the land is not secured by debtor’s principal residence and is not protected from modification by § 1322(b)(2). “PrimeWest’s lien does not cover the manufactured home that is the ‘residential structure.’ The anti-modification provision of § 1322(b)(2) applies to real property that is the debtor’s principal residence. . . . [U]nder Texas law, a manufactured home is personal property. . . . Its lien covers only the realty; its secured claim is not secured by ‘a security interest in real property that is the debtor’s principal residence.’ Thus both the anti-modification exception of § 1322(b)(2) and its exception, § 1322(c)(2), are inapplicable. . . . The Garcias are therefore free to propose a plan that modifies PrimeWest’s secured claim, in accordance with the general rule of § 1322(b)(2). Such modification may provide for bifurcation of the claim if the claim is undersecured[.]”).

In re Johnson, No. 1:14-bk-14558-SDR, 2015 WL 4053584, at *1-*3 (Bankr. E.D. Tenn. July 1, 2015) (Rucker) (That one-third of manufactured home rested on neighbor's property did not forfeit protection from modification in § 1322(b)(2), but further hearing necessary to determine whether manufactured home was sufficiently affixed to ground to be real property. "About one-third of the home is situated on a neighbor's property and two-thirds of the home is located on the real property owned by the debtor in which Vanderbilt holds a security interest. . . . Section 101(13A) makes clear that the manufactured home of the debtor in this case is her principal residence, but it has no bearing on whether the home constitutes real property. . . . [A] security interest in the land beneath the manufactured home is not determinative of whether the anti-modification provision applies. . . . [T]wo-thirds of the mobile home does sit on land owned by the debtor and in which Vanderbilt does hold a security interest. . . . Because a significant portion of the manufactured home is located on real property owned by the debtor and securing Vanderbilt's claim, . . . Vanderbilt is not deprived of the protection of § 1322(b)(2) merely by virtue of the fact that about a third of the debtor's manufactured home is located on a neighbor's property. . . . [H]owever, . . . the parties have not stipulated to any facts regarding the extent to which the home is attached to land which would allow the court to decide the issue of whether the home is real or personal property.").

In re Turner, No. 14-43032-13, 2014 WL 6674778 (Bankr. W.D. Mo. Nov. 24, 2014) (Federman) (Superseding In re Coleman, 373 B.R. 907 (Bankr. W.D. Mo. Aug. 2, 2007) (Federman), manufactured home is "deemed" real property under Missouri law for purposes of § 1322(b)(2) regardless whether it is affixed to land or treated as real property for tax or recording purposes.).

In re Frank, No. 12-06722-8-SWH, 2014 WL 5395857, at *5 (Bankr. E.D.N.C. Oct. 23, 2014) (Humrickhouse) (Lot adjacent to lot on which debtor's home sat was included in principal residence for purposes of § 1322(b)(2). "[T]he adjacent lot [was] seamlessly integrated into the debtor's use of his residence and act[ed] as expanded back yard and recreation area in connection with the residence. . . . [B]oth lots are now and at all relevant times have been used as the debtor's principal residence.").

Abdosh v. IndyMac Mortg. Corp. (In re Abdosh), 513 B.R. 882, 886 (Bankr. D. Md. July 31, 2014) (Mannes) (General provisions in deed of trust with respect to escrow payments and insurance did not create additional collateral that would forfeit the protection from modification in § 1322(b)(2). Provisions dealing with escrow payments and insurance added, if anything, "incidental property commonly conveyed in a deed of trust and defined in 11 U.S.C. §§ 101(13)(A) and (27)(B) as a part of a debtor's principal residence. Congress added these sections to the Bankruptcy Code in 2005 so as to clarify any ambiguity some judges may have found in 11 U.S.C. § 1322(b)(2)."), aff'd, No. PJM 14-2916, 2015 WL 4635103 (D. Md. July 30, 2015) (Messitte).).

Shull v. PNC Bank (In re Shull), 493 B.R. 453 (Bankr. M.D. Pa. May 31, 2013) (Opel) (New definition of "incidental property" to principal residence included fixtures; security interest in personal property now or hereafter attached or affixed to real property was not additional security that would forfeit protection from modification.).

Kreitzer v. Household Realty Corp. (In re Kreitzer), 489 B.R. 698 (Bankr. S.D. Ohio Apr. 4, 2013) (Humphrey) (Mortgage provision for security in miscellaneous proceeds was not additional security to support bifurcation; § 101(13A) definition of principal residence includes incidental property defined in § 101(27B).).

In re Inglis, 481 B.R. 480, 482-83 (Bankr. S.D. Ind. Oct. 22, 2012) (Metz) (Security interest in escrow account for taxes and insurance does not forfeit protection from modification in § 1322(b)(2); 2005 amendments clarify that escrow is part of principal residence. "[U]nder the express terms of [§§ 101(13A) and 101(27B)] added by BAPCPA, it appears that a lender does not lose its § 1322(b)(2) protection by taking a security interest in escrow funds as 'escrow funds' are part of the 'incidental property' which comprises 'the debtor's principal residence'.").

Yaryan-Parks Trust v. Martinez (In re Martinez), 476 B.R. 627, 636-46 (Bankr. D.N.M. July 30, 2012) (Starzynski) (Although BAPCPA protects a mobile home debt from modification as if it were a principal residence, debtor can manage mobile home debt through plan when writ of replevin was issued before the petition but not served. "BAPCPA extended the protection afforded to a debtor's principal residence situated on real estate to a mobile home alone that serves as a principal residence. . . . [T]he state court issued a writ of replevin, which had not been served or returned by the filing of the bankruptcy. . . . [T]he mere issuance of the writ by the state court did not divest Debtor's interest in the mobile home under state law. Therefore, the mobile home is property of the estate.").

Didlake v. Wachovia Bank, N.A. (In re Didlake), 454 B.R. 349 (Bankr. W.D. Va. June 29, 2011) (Krumm) (Assignment of rents was included in BAPCPA definition of principal residence and incidental property in §§ 101(13A) and 101(27B); deed of trust containing assignment of rents on principal residence was protected from modification.).

Didlake v. Wachovia Bank, N.A. (In re Didlake), 454 B.R. 349, 352 (Bankr. W.D. Va. June 29, 2011) (Krumm) (Applying § 101(13A) and (27B), assignment of rents in home mortgage did not forfeit protection from modification. "[T]he fact that the Credit Line Deed of Trust lists rents as an item of collateral does not add any additional collateral to the Defendant's security interest beyond those items already identified by the Bankruptcy Code as constituting a debtor's principal place of residence.").

In re Melara, 441 B.R. 749 (Bankr. M.D.N.C. Feb. 4, 2011) (Aron) (Applying North Carolina law and Ennis v. Green Tree Servicing, LLC (In re Ennis), 558 F.3d 343 (4th Cir. Feb. 25, 2009) (Michael, Niemeyer, Bennett), debt secured by mobile home was not protected from modification because mobile home remained personal property—it still had wheels, axles and hitch, and certificate of title had not been canceled.).

In re Leiferman, No. 10-40718, 2011 WL 166170, at *1 (Bankr. D.S.D. Jan. 19, 2011) (Nail) (Mortgage secured by "all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter part of the property" was secured only by principal residence as defined in §§ 101(13A)(A) and 27(B). Various covenants and agreements in mortgage were not additional security but rather merely performance obligations. Advances or disbursements in addition to amount secured by mortgage were not additional collateral for claim. Assignment of proceeds resulting from improvements, easements, appurtenances, fixtures, replacements or additions to property did not grant security interest, merely serving as assignment of possible proceeds.).

In re Green, 436 B.R. 91 (Bankr. S.D. Ill. Aug. 11, 2010) (Altenberger) (Applying Illinois law, mobile home permanently attached to real estate was fixture; mortgage that funded purchase of mobile home and the land on which it stood was protected from modification by § 1322(b)(2).).

In re Bradsher, 427 B.R. 386, 389-90 (Bankr. M.D.N.C. Feb. 16, 2010) (Stocks) (Applying Ennis v. Green Tree Servicing, LLC (In re Ennis), 558 F.3d 343 (4th Cir. Feb. 25, 2009) (Niemeyer, Michael, Bennett), redefinition of principal residence by BAPCPA in § 101(13A) does not change conclusion that security interest in an escrow account forfeits protection from modification in § 1322(b)(2) because escrow account is not a component of the land under North Carolina law. "Wells Fargo is correct that when section 101(13A) and section 101(27B) are read together, escrow funds fall within the definition of a 'debtor's principal residence.' Section 101(13A) sweeps within the definition of a debtor's principal residence 'incidental property' which section 101(27B) defines as including escrow funds. As the decision in Ennis makes clear, however, this alone does not mean that the anti-modification provision of section 1322(b)(2) is applicable. Under Ennis, that occurs only if escrow funds can be regarded as real property under applicable state law.").

Jordan v. Greentree Consumer Disc. Co. (In re Jordan), 403 B.R. 339 (Bankr. W.D. Pa. Mar. 27, 2009) (Agresti) (Applying Scarborough v. Chase Manhattan Mortgage Corp., 461 F.3d 406 (3d Cir. 2006), mobile home was not attached to property at time of purchase and could not be real property for § 1322(b)(2) purposes; statement by Greentree in proof of claim that collateral was "other" than real property is judicial admission that precludes protection from modification in § 1322(b)(2). "Scarborough thus places the Third Circuit firmly within the group of cases holding that entitlement to protection from modification under Section 1322(b)(2) is determined based on the circumstances existing as of the time of taking out the loan and executing the loan documents. . . . [T]he Mobile Home itself can by no stretch be considered real property . . . it was not yet even in the Jordans' possession, and was thus obviously not situated on any land of theirs where it might have become part of the real estate.").

In re Lara, No. 07-60188, 2008 WL 961892, at *4 (Bankr. S.D. Tex. Apr. 8, 2008) (unpublished) (Steen) (BAPCPA change to § 101(13A) did not alter fact that exception to modification in § 1322(b)(2) is limited to real property. "While the Court does not know what Congress had in mind when it defined 'debtor's principal residence,' the limitation of § 1322(b)(2) to real property has been clear and has governed chapter 13 cases for over 27 years. The Court finds it implausible that Congress simply 'forgot' to delete the word 'real' from § 1322(b)(2), thereby requiring the courts to speculate on the purpose of the new definition.").

In re Gearheart, No. 07-70232, 2007 WL 4463342, at *5 (Bankr. E.D. Ky. Dec. 14, 2007) (Howard) ("This Court holds that the addition of 11 U.S.C. § 101(13A) by [BAPCPA], in light of 11 U.S.C. § 1322(b)(2) does not prohibit a debtor from modifying a claim that is secured only by a security interest in real property when a mobile home sits on that real property and that mobile home is the debtor's principal residence." Under Kentucky law, a mobile home or manufactured home is personal property until the certificate of title is surrendered with an affidavit stating that the mobile home has been converted to real property. MERS had a security interest in the debtor's real property but did not have a security interest in the mobile home on that property.).

In re Logan, No. 07-70212, 2007 WL 4414784, at *2 (Bankr. E.D. Ky. Dec. 14, 2007) (Howard) ("[T]he addition of 11 U.S.C. § 101(13A) . . . does not prohibit a Debtor from modifying a claim that is secured only by a security interest in a mobile home when that mobile home is the Debtor's principal residence, but is located on real property in which the Debtor has no ownership interest and against which the creditor has no perfected lien.").

In re Fuller, No. 07-81073, 2007 WL 3244113, at *2 (Bankr. M.D.N.C. Nov. 2, 2007) (Carruthers) (Mobile home that is not real property under North Carolina law is not protected from bifurcation by § 1322(b)(2) or § 101(13A). "Section 1322(b) specifically applies to 'real property that is the debtor's principal residence.' . . . Green Tree has not argued that the Mobile Home in this case should be considered real property . . . . If the amendments contained in BAPCPA had deleted the words 'real property' from § 1322(b), in addition to defining a debtor's principal residence to include mobile homes, then Green Tree's argument would be persuasive; however, no such changes were made to the language of § 1322(b).").

In re Oliveira, 378 B.R. 789 (Bankr. E.D. Tex. Oct. 11, 2007) (Liens on manufactured homes are not protected from modification by § 1322(b)(2) or § 101(13A) when lienholder does not also have security interest in real property; because manufactured homes are personal property, not real property under Texas law, Greentree's liens can be modified.).

In re Bartolome, No. 07-10731-DHW, 2007 WL 2774467, at *2-*3 (Bankr. M.D. Ala. Sept. 21, 2007) (Rejecting In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), mobile home that is not real property under Alabama law because debtor does not own land and creditor does not have lien on land, is not protected from modification by § 1322(b)(2) notwithstanding § 101(13A). "The holding in Shepherd ironically serves to 'judicially write out' the term 'real property' from § 1322(b)(2). . . . Although federal bankruptcy law determines whether the mobile home at issue constitutes the 'debtor's principle [sic] residence,' state law determines whether that same mobile home constitutes real property. . . . [T]he phrase 'debtor's principal residence' modifies 'real property,' not the other way around.").

In re Rivers-Jones, No. 07-02607-JW, 2007 WL 7714892 (Bankr. D.S.C. Sept. 4, 2007) (Waites) (Mobile home was not protected from valuation by § 1322(b)(2) because mobile home was not real property under South Carolina law. Section 101(13A) requires principal residence to be real property.).

In re McLain, 376 B.R. 492, 495 (Bankr. D.S.C. Aug. 30, 2007) (Claim secured by double-wide mobile home is not protected from modification when Green Tree does not have a security interest in real property under South Carolina law. "[Sections] 101(13A) and 1322(b)(2) are unambiguous . . . . This Court does not conclude that the statute sweeps into § 1322(b)(2) ALL mobile home mortgages.").

In re Manning, No. BK 07-70190-CMS-13, 2007 WL 2220454, at *2-*7 (Bankr. N.D. Ala. Aug. 2, 2007) (Rejecting In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), because mobile home remained personal property under Alabama law, claim secured by mobile home can be modified notwithstanding that mobile home is the debtor's principal residence. "This amendment adding § 101(13A) appears to have been enacted to protect mortgage lenders who have taken a lien on debtor's real estate which was the debtor's principal residence, but which also included property other than real estate. . . . If Congress meant to take out real property in § 1322(b)(2), then why did they add it back in the definition of incidental property? . . . The phrases 'real property' and 'debtor's principal residence' are distinct terms and must both be satisfied in order for the debt to be unmodifiable under 11 U.S.C. § 1322(b)(2). . . . The mobile home in this case . . . is the debtor's principal residence and at the same time is personal property. As such, Green Tree's secured claim on said personal property is excluded from the anti-modification language of § 1322(b)(2).").

In re Lunger, 370 B.R. 649, 651 (Bankr. M.D. Pa. June 29, 2007) (Tax escrow account is now defined as "incidental property" that is included in definition of personal residence; security interest in incidental property does not forfeit protection from modification after BAPCPA. Citing In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), "since Congress chose to define all 'incidental property' as included in the 'debtor's principal residence' and all residences as being included in the term 'real property,' Congress has effectively broadened the definition of real property for the purpose of implementing § 1322(b)(2). . . . [O]ur Circuit has concluded that New Jersey's 'view' of an escrow as not representing 'additional' collateral, is one of 'common sense.' In re Ferandos, 402 F.3d 147, 156 (3d Cir. 2005). Such an opinion by our controlling Circuit is a powerful indicator that the 2005 amendments would be interpreted so as to apply the anti-modification clause to the revamped definition of debtor's personal residence. . . . [T]he 'plain meaning' of the statute would bar modifications of residential real estate despite a mortgagee holding a secured interest in what has now been defined as 'incidental property' such as an escrow fund.").

In re Cox, No. 07-60073, 2007 WL 1888186, at *2 (Bankr. S.D. Tex. June 29, 2007) (Rejecting In re Shepherd, 354 B.R. 505 (Bankr. E.D. Tenn. 2006), manufactured home is personal property under Texas law and only real property can claim protection from modification in § 1322(b)(2). "[T]he limitation of § 1322(b)(2) to real property has been clear and has governed chapter 13 cases for over 27 years. The Court finds it implausible that Congress simply 'forgot' to delete the word 'real' from § 1322(b)(2).").