MEMORANDUM
Hearing was held on September 30, 1996, on the Chapter 13 Plan filed by the debtors. Debtors have filed an objection to the claim of Green Tree Financial Servicing Corp. which has been resisted. The issue presented is the same in the plan confirmation process and the objection to claims. This memorandum contains findings of fact and conclusions of law required by Fed.Bankr.R. 7052 and Fed.R.Civ.P. 52. This is a core proceeding as defined by 28 U.S.C. § 157(b)(2)(B), (K), (L).
Background
Green Tree Financial Servicing Corp. (Green Tree) filed an objection to the Chapter 13 plan proposed by the debtors. Green Tree objects to the plan on the basis that the plan treats its claim as a general unsecured claim. Green Tree maintains that such treatment of its claim contravenes 11 U.S.C. § 1322(b)(2).
Debtors have objected to the claim of Green Tree and seek a determination of the extent of Green Tree’s lien in their principal residence.
On November 19,1994, the debtors executed a note secured by a deed of trust in the amount of $15,012.30. The deed of trust covers real property which is tie debtor’s principle residence, and Green Tree is the holder of both the note and the deed of trust that secures it.
At the time of the filing of the petition, the residential real estate was valued at $30,000, and is subject , to two additional mortgages that are senior to Green Tree’s.. The first mortgage is in the approximate amount of $28,000, and the second is in the approximate amount of $8,000. Thus, there is no equity that secures Green Tree’s security interest.
The issue presented in this matter is whether Green Tree’s rights as the holder of a lien in the debtors’ principal residence may be modified by the debtors’ plan pursuant to 11 U.S.C. § 1322(b)(2)
1
as interpreted by the United States Supreme Court in
Nobelman v. American Savings Bank,
Decision
Green Tree does not hold a secured claim or a secured claim component under a § 506(a) analysis and therefore Green Tree’s rights pursuant to its claim may be modified by the debtors’ Chapter 13 plan pursuant to § 1322(b)(2).
Discussion
Green Tree contends that the plan’s treatment of its claim impermissibly modifies its rights as a holder of a claim secured by a security interest in debtors’ personal residence. The Code at § 1322(b)(a) 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).
Green Tree relies on
Nobelman
for the proposition that its hen cannot be
*988
stripped off
2
by the debtor. In
Nobelman,
the United States Supreme Court held that under § 1322(b)(2), a debtor could not strip off the lien of a partially secured creditor that held a lien on the debtor’s principal residence. More specifically, the Court held that the term “claim” in the “other than ...” clause of Section 1322(b)(2) did not refer back to the term “secured claims” in the preceding clause, but rather stood on its own and its definition encompassed both the secured and unsecured components of a partially secured creditor’s claim.
3
Id.
at 330-31,
The Court did not specifically address the issue of a creditor in Green Tree’s position, 1.e. a creditor that is totally unsecured but holds a lien in the debtor’s principal residence. The vast majority of reported cases decided after
Nobelman
that have specifically addressed the issue have held that a creditor in Green Tree’s position is not protected by § 1322(b)(2)’s anti-modification provision, and that its rights may be modified by a Chapter 13 plan. See,
Wright v. Commercial Credit Corp.,
Perhaps the best analysis of this issue in a
post-Nobelman
case was provided by
In re Hornes,
Although the Court in Nobelman held that the term “claim” in the “other than ...” clause does not refer back to the term “secured claim” in the preceding clause,
Nobelman did not hold that the other than clause applies to the rights of holders other than those holders described in the secured claims clause that precedes it, that is holders of secured claims in the code sense; indeed that issue was not before the court. The Court simply held that the word “claim” in the other than clause stands by itself, and is not implicitly modified by the word “secured” appearing in the secured claims clause. It is therefore consistent with Nobelman ... to hold that even though [the creditor’s] claim is literally within the language of the other than clause, since it holds only a totally unsecured claim in the code sense, § 1322(b)(2) does not protect its rights.
Hornes,
The Homes court supported this proposition in three different ways. First, it noted that the Nobelman Court’s discussion of the rule of the last antecedent 4 supported the proposition that the term “secured claims” was used in the code sense in § 1322(b)(2), because
[i]f “secured claims” meant, as in § 506(d), only whether there existed a security agreement purporting to create a lien on the residence, the rule of the last antecedent argument would have been irrelevant, because in that event, the term “claim” in the other than clause could have referred to its last antecedent, i.e. “secured claims” in the literal sense, without creating any problem of interpretation for the court.
Id. at 714.
Second, the Court in
Nobelman
found that the debtors could not modify the terms of the unsecured component of the creditor’s claim without also modifying the terms of the secured component.
Third, the court in
Hornes
found that the last clause of § 1322(b)(2) supported the argument that the terms “secured claims” and “unsecured claims” are used in their code sense in § 1322(b)(2).
Id.
at 715. That clause states that the plan “may leave unaffected the rights of holders of any class of claims.” 11 U.S.C. § 1322(b)(2). “The Code does not generally classify creditors based on the existence of a piece of paper purporting
*990
to give a creditor rights in specified collateral, but rather on whether a creditor actually holds a claim supported by valuable estate property.”
Id.
See,
In
re
Plouffe,
While all three methods of analysis described above support the proposition that the term “secured claims” is used in the code sense in § 1322(b)(2), and thus a creditor must have secured claim in both the literal sense and the code sense in order to have its rights protected by the anti-modification clause, the most compelling support for the proposition comes from the Nobelman Court’s discussion of § 506(a).
With regard to a § 506(a) analysis, the Court stated:
By virtue of its mortgage contract with [the debtors], the bank is indisputably the holder of a claim secured by a hen on [the debtors’] home. Petitioners were correct in looking to § 506(a) for judicial valuation of the collateral to determine the status of the bank’s secured claim ... But even if we accept [the debtors’] valuation, the bank is still the “holder” of a “secured claim,” because [the debtors’] home retains $23,500 of value as collateral. That portion of the bank’s claim that exceeds $23,500 is an “unsecured claim component]” under 506(a); however, that determination 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.
Nobelman,
Green Tree does not hold a secured claim in the code sense. Therefore, its claim is unsecured in the code sense, and may be modified by a Chapter 13 plan according to a plain reading of § 1322(b)(2).
In re Lee,
Lien Avoidance
The issue of the right of the debtors to modify the claim of Green Tree arises in *991 the context of the plan confirmation process. To determine if the plan is confirmable as written it is necessary to determine the extent and validity of the lien asserted in Green Tree’s proof of claim. Fed.Bankr.R.Proc. 7001(2) provides that such a determination shall be made in an adversary proceeding and the rule does not appear to contemplate such a determination being made in the confirmation process as a contested matter. However, Fed.Bankr.R.Proc. 3007 provides that if an objection to claim is filed and is joined with a request for relief of the kind specified in Rule 7001, such contested matter “becomes an adversary proceeding.” Debtors have filed an objection to Green Tree’s claim and requested that the extent of the lien be determined. Therefore, by virtue of Rule 3007, the objection becomes an adversary proceeding and the court has the right to make factual and legal findings valuing and avoiding the lien pursuant to 11 U.S.C. § 506(a) and (d). The resolution of the conflict between the parties over the extent of the lien and its avoidance under Section 506(a) and Section 506(b) shall, pursuant to Rule 3007, be considered as having been litigated in an adversary proceeding.
Conclusion
A creditor that holds a security interest in the debtor’s principal residence is not protected by the anti-modification provision of § 1322(b)(2) if the creditor does not hold a “secured claim” or a secured claim component pursuant to § 506(a). Green Tree does not hold a “secured claim” or a secured claim component pursuant to § 506(a). Its lien is avoided under Section 506(d) and its rights may be modified by the debtors’ plan. Accordingly, Green Tree’s objection to the debtors’ plan is overruled.
Separate journal entry shall be filed.
Notes
. All subsequent statutoiy references are to sections of Chapter 11, United States Code, sometimes referred to as the Bankruptcy Code, or Code.
. The term “stripped off” refers to lien avoidance pursuant to § 506(d) in a Chapter 13 context (§ 1322 of the Bankruptcy Code). "[I]n recent litigation, the term ‘strip off' is applied where a junior mortgagee is totally unsecured as to the debtor’s principal residence, while the term 'strip down' is still used where a mortgage is partially secured, and partially unsecured.”
In re Woodhouse,
. The term "claim” is defined in § 101(5) of the Bankruptcy Code as follows:
"claim” means—
(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliq-uidated, fixed, contingent, matured, unma-tured, disputed, undisputed, legal, equitable, secured, or unsecured; or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment ...
. The Court in Nobelman stated as follows with regard to the rule of the last antecedent:
Petitioners urge us to apply the so-called “rule of the last antecedent,” which has been relied upon by some Courts of Appeals to interpret § 1322(b)(2) the way petitioners favor. According to this argument, the operative clause “other than a claim secured by a security interest in ... the debtor's principal residence” must be read to refer to and modify its immediate antecedent, “secured claims.” Thus, § 1322(b)(2)'s protection would then apply only to that subset of allowed "secured claims,” determined by application of § 506(a), that are secured by a lien on the debtor’s home — including, with respect to the mortgage involved here, the bank's secured claim for $23,500. We acknowledge that this reading of the clause is quite sensible as a matter of grammar. But it is not compelled. Congress chose to use the phrase "claimed secured ... by” in § 1322(b)(2)’s exception rather than repeating the term of art "secured claim.” The unqualified word "claim” is broadly defined under the Code ... It is also plausible, therefore, to read "a claim secured only by a [homestead lien]" as referring to the lienholder’s entire claim, including both the secured and the unsecured components of the claim.
Id.
at 330,