The collateral for the Note constitutes the Debtors' principal residence within the meaning of Section 1322(b)(2). In re Speights, 131 B.R. 205 (Bankr. N.D. Fla. 1991). Green Tree asserts that contrary to the arbitration provision of the Note, requiring arbitration of any and all alleged claims by the Debtors against Green Tree, that Debtors' Plan attempts to establish a set off of any recovery by the Debtors in the arbitration against the indebtedness owing Green Tree. Green Tree argues that by attempting to structure such a setoff, contrary to the language of the applicable debt instruments and the earlier findings of two separate courts, the Debtors seek to modify the lien rights of Green Tree in contravention of Section 1322(b)(2). The Court agrees with the arguments set forth by Green Tree and finds Debtors' Plan is in violation of § 1322(b)(2).
See, e.g., In re Cluxton, Case No. 04-8028, 2005 WL 1201469 (6th Cir. BAP May 19, 2005); In re Thompson, 217 B.R. 375 (2d Cir. BAP 1998); In re Johnson, 269 B.R. 246 (Bankr. M.D. Ala. 2001); In re Speights, 131 B.R. 205 (Bankr. N.D. Fla. 1991); In re Carter, 116 B.R. 156 (Bankr. W.D. Mo. 1990); but see In re Nowlin, 321 B.R. 678 (Bankr. E.D.Pa. 2005) (adversary proceeding commenced to bifurcate and "cram down" secured claim to the fair market value of plaintiff's mobile home). The determination of the amount due on account of a creditor's claim and the value of a lien securing a claim are contested matters and, thus, may properly be dealt with during the confirmation process.
Although Griffin involved a mobile home, such homes may be considered real property in a bankruptcy case, depending on the nuances of state property law. See In re Speights, 131 B.R. 205, 207 (Bankr. N.D. Fla. 1991). Even if the mobile home were considered personal property, the Seventh Circuit has instructed that the characterization of property as real or personal should further rather than thwart the function of federal law.
In Smith, the Bankruptcy Court found that the subject mobile home was real property, applying New Hampshire law. As the subject property in that case was real property, the secured lender's claim fell within the anti-modification provision of Section 1322(b)(2). See also In re Speights, 131 B.R. 205 (Bankr. N.D. Fla. 1991) (Mobile home which was permanently affixed to the land is real property, applying Florida law, and the indebtedness could not be modified). To put the matter simply, the holder of a security interest in a mobile home, which is the debtor's principal residence, falls within the protection of the anti-modification provision if local law defines mobile homes as real property, but is not protected if local law defines them as personal property.
While the methods and extent of affixation vary widely in cases in which mobile homes have been identified as fixtures, attachment to a permanent foundation is generally considered strong evidence of intent that a mobile home become a permanent part of the real estate. See, e.g., In re Morphis, 30 B.R. 589 (Bankr.N.D.Ala. 1983); In re Fink, 4 B.R. 741 (Bankr.W.D.N.Y. 1980); C.I.T. Financial Services v. Premier Corp., 747 P.2d 934 (Okla. 1987); Hartford National Bank Trust Co. v. Godin, 137 Vt. 39, 398 A.2d 286 (1979); Bell v. City of Corbin City, 164 N.J. Super. 21, 395 A.2d 546 (App.Div. 1978); see also In re Speights, 131 B.R. 205 (Bankr.N.D.Fla. 1991). By contrast, mobile homes not placed on a permanent foundation have been found to be personalty rather than fixtures.
Citing, In re Owens, 36 B.R. 661 (Bankr.M.D.Tenn. 1984); In re Carter, 116 B.R. 156 (Bankr.W.D.Mo. 1990); In re Plaster, supra; In re Thurston, 73 B.R. 138 (Bankr.N.D.Tex. 1987) (holding that, under the circumstances of that case, under Texas law, a mobile home is not regarded as residential real estate and that a lien served by a mobile home is not protected from modification by § 1322(b)(2).Also see, In re Speights, 131 B.R. 205 (Bankr.N.D., Fla. 1991). In Thurston, supra, the court discussed the possible applicability of Title 79, Interest, Texas Revised Civil Stat. art. 5069-6A01 et seq. and 5069-6A-11(3).