# Amicus Curiae Brief — Nobelman v. American Savings Bank

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1993
- **Citation:** 508 U.S. 324

## Text

BOR ARGUMENA

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Suoreme C2u0, U &. "
FILED

‘oe 139)

Marta
REGELE™ A>. 92-641

In The
Supreme Court of the United States

OFFICE OF THE Clik |

October Term, 1992

vv

LEONARD NOBELMAN AND HARRIET NOBEWAAN,

retitioners,
vs.

ELM’RICAN SAVINGS SANK,

Respondent.

A.
4

In Writ of Certiorari
To Tre United States Court of Appeals
For the Fifth Circuit

@
¥

AMICUS CURIAE BRIEF OF THE STATE OF ALASKA
IN SUPPORT C? RESPONDENT APERK-CAN SAVINGS
BANK

&
a

Charles E. Cole

Attoriu.ey General of the
State of Alaska

Counse~— of Record for
Aricus Curiae

Aary t.len Beardsley

ot start Attorney Genera
>:ace of Alaska

*031 W. 4th Avenue, #200
Anchorage, A-aska 99501 -
'907) 269-51¢2>

Ko.chard Ulls.rom
Routh & Crabtree, P.°.

BEST AVAILABLE COPY"

TABLE OF CONTENTS

Table of Autherities «+e ce ce ce eo 6 ob

Statement of Interest of Amicus Curiae
Seaee OF ARBOR « «© © © eo 6 ee ee 8 8 lek

I. SUMMARY OF ARGUMENT ... ++ «© «© « «3

II. ALASKA’S EXPERIENCE WITH CHAPTER 13
STRI PDOWNS . . . . . > o 7. . . . . * * . * 7

A. Alaska’s cyclical economy had a
severe but transitory effect on property
values and mortgage loans in the late
seeené » ». & 6i1@ <6 406 O76.6-6°8 & OF

B. Chapter 13 stripdowns became

possible just as property values reached
their low point, resulting in windfalls
to some mortgagors. o° ei 6b 6-658 “Se

C. Chapter 13 stripdowns have had a
significant impact, and may in the
future have an even greater impact, on
Alaska’s mortgage loan portfolio. .. 14

D. Chapter 13 stripdowns result in a
real loss to the mortgagee, even though
it receives the value of the residence.

* . . . . . . . o . * . . . * . * * . 17

IIl. CONGRESS DID NOT INTEND TO PERMIT
RESIDENTIAL MORTGAGE STRIPDOWNS IN CHAPTER
Ade . * . . * a * . * . * * . * . . * . 24

A. The language of Section 1322(b) (2)
may readily be interpreted to prohibit
residential mortgage stripdowns. .. 24

B. The legislative history of Section
1322(b) (2) shows a clear intent to not
depart from pre-Code practice that did
not permit modification of a mortgagee’s
a, ee a a ee ee

1. Under both former Chapter XIII and
under the original proposed version of
the Bankruptcy Code, the residential
mortgagee’s rights could not be
MOGLES@G. «© se ce we ec eee eeve co 3

2. The process of adoption of the
Bankruptcy Code shows an intent to
continue the prohibition on
modification of the mortgagee’s rights
contained in Chapter XIII and in the
Commission Bill. ...... + + «+ 34

C. Permitting stripdowns under Section
1322(b)(2) actually eliminates the

protection for residential lenders that
was intended by Congress. ..... 4l

1. In evaluating conflicting
interpretations of the statute, it is
necessary first to determine what
purposes the statute was intended to
a ae a ee ee ee ee)

2. The pro-stripdown interpretation
of the statute serves none of its

purposes well, and is in conflict with
many of them. ..... +++ « « 45

IV. THIS COURT’S DEWSNUP DECISION
IMPLICITLY REJECTS THE REASONING UPON
WHICH HOUGLAND AND OTHER CASES PERMITTING
STRIPDOWN ARE BASED. ....+ ++ + « « 54

A. Dewsnup held that Section 506(d) did
not permit a stripdown in Chapter 7. 55

Vv.

B. The reasoning of Dewsnup applies
with equal force to stripdowns in

Chapter 13. .+-+-e«eeeee ec eo « 9
C. No separate provision of Chapter 13
allows stripdowns. ....+. ++ « « 58

CONCLUSION seeevuveceVneenesee

Cases

Contractors, 818 F.2d 1503 (9th Cir.
1987) = J . . . * . . . 7 . .* * . -51,52

In re Campbell, 124 B.R. 462 (Bkrtcy. W.D.
Pa. 1991) . . . . . . . . >. . . . * . 42

Appeal of Capps, 836 F.2d 773 (3rd Cir.
\) yy) ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee)

In re Fischer, 126 B.R. 819 (D. Alaska

ne
, -- U.S. --, 112 S.Ct.

773,116 L.Ed.2d 903 (1992). .6,19,25,26,

a te he re he 6 6 eee

In re Etchin, 128 B.R. 662 (Bkrtcy. W.D.
Wis. 1991) eeee4ace5u450vté 6 & © 6 b oe

In re Glenn, 760 F.2d 1428 (6th Cir. 1985)
* . * . * * * * * * . . * . . al * -37,44

Association, 730 F.2d 236 (5th Cir.
1984) * * * * * * * * * * * * * * - 36, 37

Hallenbeck vy. Penn Mutual Life Ins. Co.,
323 F.2d 566 (4th Cir. 1963) .... 28

, 886 F.2d 1182 (9th Cir.
1989) . . 2,3,11,15,16,18,23,25,37,55,57

Landmark Financial Services v. Hall, 918
F.2d 1150 (4th Cir. 1990) ...... 40

, 980 F.2d 1279
(9th Cir. 1992) -. - «© «© «© ee © © «© « 2
i

in_re Nobelman, 129 B.R. 98 (N.D. Tex. 12 U.S.C. §1454(a)(2) . . « «© «© © «© © «© 20
ee ee we owe ee een ees \ ae ee ee ee
Vo Te) ee

Matter of Nobleman, 968 F.2d 483 (5th Cir. etl t) nn a a a

1992) * . . . . . . . . 7 . . . . . 26

In re Oxborrow, 913 F.2d 751 (9th Cir.

38 U.S.C. §1801 . . * . . . . . . . . . 44

a «sb 6 6.66 6: 6°46: 6 6.4.0 AS 06.05.207(a)(4) .. ++ + «© «© « « « 20
AS 06.05.207(c) ..+++s«-e+e-+ee++2 «© « 20
’ ASB 186.896.0380 .« «cece e eevee of
967 F.2d 918 (3rd Cir. 1992) ... . 47 ee 8 Seer ee eee eee
In re Seidel, 752 F.2d 1382 (9th Cir. 15 AAC 118.310(a)(3) ....++ +++ + 20
1985) . 6 © 6 we ew ew ww ee + 36,37,47 15 AAC 151.020(a)(3) ....+ ++ + «+ « 20
Sullivan v. Stroop, 496 U.S. 478, 100 Repealed Statutes
S.Ct. 2499, 100 L.Ed.2d 438 (1990). . 57 11 U.S.C. §616(1) . «© © «© © © © © © « « 96
OO eee
In re Warren, 89 B.R. 87 — Cir. BAP
“6.6 «6.e-« s+ éere & « o Other Authorities
, 123 B.R. 95 (Bkrtcy. W.D. Legislative Materials
GXiS. 1990) ~- «+ e+ cseeeeveececee $3 House Report 95-595 .... . +. 42,43,60
Report of the Commission on Bankruptcy
Statutes and Regulations Laws of the United States (also
"Commission Bill") . .27,28,29,30,31,32
AS GiOc@. GOORORE 2 2 cc 0 ce oe oS Pee eee eae * *§ & Ke
BGS(@) «© © se ec ec eee eew oe SF
S02 «© © © we eo oe eo ow ow ow SS 124 Congressional Record H11107.. . 39
Dn «se « « « © 8 6 6-6 ee 124 Congressional Record $17424 .. . 39
S06(G@) . «- « «© « « « 6,99,57,59
SS2B¢E) « « ec eo 0 0 0 oc OH, 68,68 Treatises
1123(a)(5)(E) .... . -60,61
See. « 6 6 aleotee bee Collier on Bankruptcy, 15th ed., App. Vol.
1322 (b) (2) 2 ail 5,6,11,24,25,26 0 © © © © 0 o 0btyS88

.35,37,39,40,41,43,47,49,53,58

ve greet stain tap, bt ta

1322(b) (5) . .38,39,40,46,48,58

DT . 6 6 6 6 6 « 6:5 ae

Pe ee

ee. °6°6 6 6.56 ae
ii iii

STATEMENT OF INTEREST OF AMICUS CURIAE
STATE OF ALASKA

The State of Alaska’s interest in the
outcome of this case stems from its
extensive investment in residential
mortgages through various state agencies.
T’ xse include the two principal state
pension funds, the Public’ Employees’
Retirement System and Teachers’ Retirement
Systen. The Permanent Fund Dividend
Corporation, charged with the sound
investment of a portion of Alaska’s
current oil revenues for the benefit of
future generations, has also invested in
residential mortgages, as has the Division
of Investments within the State’s General
Fund.

But by far the largest portfolio of
residential mortgages in Alaska is held by
the Alaska Housing Finance Corporation

(AHFC). AHFC is a public corporation

Page 1

created by the Alaska Legislature in 1971
to remedy a serious shortage of decent
residential housing in Alaska for persons
of lower and moderate income. AS
18.56.010-.020. As of September 30, 1992,
AHFC held 41,155 residential mortgages
with a face value of over $3.2 billion,
all on properties located within Alaska.
Appendix, Exhibit "A."

Because of the cyclical nature of the
Alaska economy, the values of the
properties securing these loans may
fluctuate widely, and some loans for a
time may become undersecured during a
downward fluctuation in property values.
Such loans then become vulnerable to the
type of stripdown rejected by the Court of
Appeals for the Fifth Circuit in the
present case, but upheld by the Court of
Appeals for the Ninth Circuit in In re

Hougland, 886 F.2d 1182 (9th Cir. 1989).

Page 2

te sien ae men we

As a result of the Hougland decision, AHFC
alone has lost nearly one million dollars
from reductions of mortgage balances due
to Chapter 13 stripdowns, and stands to
lose more in the future if the practice is
permitted to continue.

The State of Alaska therefore
supports the position of respondent
American Savings Bank in this case, and
suggests affirmance of the Fifth Circuit’s
decision.

I. SUMMARY OF ARGUMENT

The State of Alaska is uniquely
positioned to shed light on the issue
before the Court, because Alaska has
recently been through a period during
which residential property values fell
rapidly then recovered, and the low point
of this cycle coincided with the approval
of Chapter 13 stripdowns by the Ninth

Circuit. The State of Alaska’s experience

Page 3

during this difficult time shows that
Chapter 13 stripdowns primarily give a
windfall to the debtor at the expense of
the mortgagee and others, a result that
Congress is unlikely to have intended.
The language of 11 U.S.C. Section
1322(b) (2) has been interpreted by various
courts to permit stripdowns, but it can
also readily be, and has been, interpreted
to prohibit stripdowns. This ambiguity
requires delving into the legislative
history of the statute in order to
determine Congressional intent.
Historically, pre-Code practice did not
permit mortgage stripdowns, although
Chapter XIII debtors were permitted to
cure defaults while maintaining payments.
Witnesses before Congress testified
against proposals to permit stripdowns.
In response to this testimony, the statute

took its current forn. The only

Page 4

explanatory comment on the final form of
the statute indicates an intent’ to
continue the pre-Code practice. There is
no indication in the legislative history
of any intent to depart from this practice
to permit stripdowns on debtors’
residences.

Interpreting the statute to permit
stripdowns is also contrary to Congress’s
objectives in Chapter 13 and in the
mortgagee clause of 11 U.S.C. Section
1322(b) (2). Permitting stripdowns
eliminates any meaningful protection for
mortgagees. At the same time, preventing
modification of the mortgagee’s other
rights, although of no great benefit to
the mortgagee, has the effect of reducing
payments on unsecured claims and of
actually making it more difficult for many
debtors to keep their houses or propose a

workable plan. Congress should not

Page 5

readily be assumed to have intended such a

result, when interpreting the statute to

prohibit stripdowns does protect
mortgagees, increases payments on
unsecured Claims, and does not

significantly impact the debtor’s fresh
start or ability to propose a plan.
Finally, this Court’s recent decision
in Dewsnup v. Timm, -- U.S. --, 112 S.Ct.
773, #%116 L.Ed.2d 903 (1992), that 11
U.S.C. Section 506 (d) does not
automatically operate to avoid the
unsecured portion of a creditor’s lien,
also requires that 11 U.S.C. Section
1322(b)(2) be interpreted to prohibit
residential mortgage stripdowns. Because
the mortgagee’s lien cannot be avoided
under Section 506(d), some other lien
avoidance power must be used, but no such
power appears in Chapter 13. The power to

"modify" the rights of creditors cannot be

Page 6

}
|
|

read as including the power to avoid
liens, and there is no evidence in the
legislative history that Congress intended
the section to contain a lien avoidance
power. In the absence of a power to avoid
the unsecured portion of the mortgagee’s
lien, the power to modify the mortgagee’s
rights in the unsecured portion of its
Claim is of little benefit to the debtor
and is unlikely to have been intended by
Congress.

II. ALASKA’S EXPERIENCE WITH CHAPTER 13
STRIPDOWNS.

A. Alaska’s cyclical economy had

a severe but transitory effect

on property values and mortgage

loans in the late 1980s.

As previously mentioned, Alaska’s
economy tends to be cyclical in nature.

In the past 50 years there have been

several periods of accelerated economic

activity and expansion, followed by

economic slowdowns and contractions of

Page 7

greater or lesser severity: World War II,
the discovery of oil in Cook Inlet in the
1950s, the discovery of oil on the North
Slope in the 1960s, the construction of
the Trans-Alaska Pipeline in the 1970s,
and the oil boom of the early 1980s.
Beginning in 1986, this last boom was
followed by a severe economic downturn
that reached bottom in approximately 1989.
The population of the state declined. The
Anchorage area, home to approximately half
the State’s people, lost almost 12% of its
population. Appendix, Exhibit "B," page
2.

The downturn hit Anchorage
particularly hard. One measure of this is
property values. The values of single
family homes tumbled an average 22.8%
between 1986 and 1989, and condominium
prices fell an average 65.9% over the same

period. Exhibit "B," page 3. Because of

Page 8

- wee

the concentration of population in the
Anchorage area, the mortgage loan
portfolios of AHFC and other state
agencies were also concentrated in
Anchorage properties. ' The population
exodus and decline in property values
resulted in a soaring foreclosure rate.
AHFC, for which figures are most readily
available, had a loan portfolio of 51,969
loans, with balances’ totaling $4.3
billion, on June 30, 1986. Appendix,
Exhibit "C," page 2. Over 60% of this was
owed on properties in Anchorage, with over
75% owed on properties in Southcentral
Alaska as a whole. Exhibit "C," page 3.
By December 1988, AHFC’s loan

portfolio had shrunk to 41,843 loans with

‘With the exception of the Housing
Assistance Division of the Alaska
Department of Community and Regional
Affairs, which specialized in rural loans.
The Division was incorporated into AHFC in
1992.

Page 9

total balances of $3.4 billion. Its
inventory of foreclosed properties
awaiting resale had reached 4,543 and over
13% of its loans were delinquent 30 days
Or more. Appendix, Exhibit "D," page 2.
In 1986, AHFC took back 1,804 properties
through foreclosure or repossession, 3,599
in 1987, 3,847 in 1988, and 3,035 in 1989.
Appendix, Exhibit "E". Beginning in 1990,
the economy began to improve, causing
property values to recover. Single family
home prices in Anchorage had returned to
92.2% of their 1986 peak by the end of
1991. Condominiums had regained over half
the ground they had lost, recovering to
61.5% of their 1986 values. Exhibit "B,"
page 3.
B. Chapter 13 stripdowns became
possible just as property values
reached their low point,
resulting in windfalls to some
mortgagors.

However, some homeowners benefitted

Page 10

~~ we =

more from this recovery than did others.
In October 1989, as property values were
at their lowest ebb, the Ninth Circuit’s
Hougland decision changed what had been
the local interpretation of 11 U.S.C.
Section 1322(b)(2)* and permitted Chapter
13 debtors to strip down their mortgage
balances to the then-prevailing value of
their residences. In the wave of Chapter
13 stripdown cases which followed the
Hougland decision, the debtor-homeowners
were able to reduce their mortgage
balances to the depressed values of 1989
and early 1990, and reap the benefit of
the appreciation which occurred later in
1990 and in 1991.

As a consequence, two homeowners who

owned identical properties subject to

*statutory references are to Title 11,
United States Code, unless otherwise
indicated.

Page 11

identical mortgages in 1986 could be in
very different situations by 1992, if one
filed a Chapter 13 stripdown case in 1989
and the other did not. The homeowner who
did not file bankruptcy would have seen a
loss of value to 1989, then an increase in
value back to near 1986 levels by 1992,
with further appreciation likely in the
future. In short, this homeowner would
ultimately have been unaffected by the
drop in property values: any "loss" was
on paper only and would have been erased
as property values recovered.

But the homeowner whose timing was
good and filed a Chapter 13 stripdown case
when property values were at their lowest
ebb in 1989 would be much better off by
1992. That homeowner would be able to
shift the paper loss to the mortgagee.
For the mortgagee, the loss becomes an
actual loss and not merely a paper one

Page 12

a te

-~ GR. mee

because the stripdown means that the
homeowner will no longer have to pay the
mortgage in full. The later appreciation
in value is irrelevant to the mortgagee.
Even if the property value increases to a
point where the property is again worth as
much or more than the amount of the pre-

stripdown balance, that

mortgage
appreciation will benefit only the debtor
because the mortgage balance was limited
to the earlier, lower, value of the
property. Thus, through the magic of the
Chapter 13 stripdown device, the homeowner
is able to transmute a temporary loss in
value into a permanent increase in the
homeowner’s equity in his or her
residence. This increase in equity is
made all the more pronounced by the more
rapid amortization of the mortgage due to
the reduction in its principal balance

through the stripdown.

Page 13

C. Chapter 13 stripdowns have

had a significant impact, and

may in the future have an even

greater impact, on Alaska’s

mortgage loan portfolio.

The impact of Chapter 13 stripdowns
on the state’s loan portfolio has been
significant. Again using figures for the
AHFC portfolio, in just the 27 currently
active Chapter 13 stripdown cases the loss
has been over $900,000, not inclusive of
the costs incurred in litigating the
cases, for an average loss per case of
$35,000. Appendix, Exhibit "F". The AHFC
loan portfolio was particularly vulnerable
to stripdowns, because AHFC had been the
dominant residential mortgage lender in
Alaska immediately before the downturn in
property values. Borrowers on AHFC loans
were, therefore, more likely to have
purchased homes when values were at their
peak and thus more likely to have little
equity in those homes to cushion the

Page 14

il a A i le tile Tle me ae

impact of the drop in property values.
Appendix, Exhibit "G," page 2.

Because of this, it might be
questioned why there are only 27 active
stripdown cases affecting AHFC’s portfolio
of over 40,000 loans. Partly this is
because many cases were attempted and
failed due to the debtor’s inability to
either propose or adhere to a plan. The
actual number of attempted stripdowns was
much greater than 27. It would have been
still greater had not AHFC and other
mortgagees vigorously resisted stripdown
cases. But the major reason for the
relatively small number of stripdowns is
the large number of foreclosures that
occurred prior to October 1989, when the
Ninth Circuit approved stripdowns in the

Hougland case.
took place from 1986 to 1989 were

The foreclosures which

generally against the properties which had

Page 15

suffered the greatest decline in value
relative to the mortgage balance, because
default risk increases as the borrower’s
equity in the property becomes negative.
Exhibit "G," page 2.

Had Hougland been decided in 1986,
hundreds, possibly thousands, of Chapter
13 stripdown cases would likely have been
filed in Alaska. Assuming a relatively
conservative loss per case of $30,000,
each 100 stripdown cases would have meant
an additional $3,000,000 loss to the
affected mortgagees. For AHFC, which
finances its mortgage purchases through
the sale of bonds, such a scenario would
likely have resulted in a downgrading of
its bond rating, forcing it to pay higher
interest rates on future bond issues.
This in turn would require AHFC to obtain
higher interest rates on mortgages it
purchased, thus undercutting AHFC’s

Page 16

mission to provide affordable housing.
Additional difficulties would arise when
the stripped down mortgage is paid off
years early, forcing AHFC to find other
sources of funds to maintain the payments
to bondholders that previously had been
funded by borrower mortgage payments. A
similar problem would face state or other
pension funds that had _ invested in
mortgages that were later stripped down,
because mortgage paysents would not be
available as expected to fund pension
benefits. Consequently, one effect of
Chapter 13 stripdowns is to benefit a
small group of mortgagor-debtors today, at
the expense of a larger group of potential
homeowners, pensioners, and others,

tomorrow.

D. Chapter 13 stripdowns result
in a real loss to the mortgagee,
even though it receives the
value of the residence.

Page 17

Because the Chapter 13 plan must
provide~a secured creditor with at least
the value of its collateral, it might be
argued that no real loss results to the
mortgagee from the stripdown. Section
1325(a)(5)(B). There are several flaws in
this argument. First, the argument
assumes that the only alternative to the
stripdown is a_ foreclosure by the
mortgagee. While true in some cases, this
would not be true in others. If the
stripdown was not available, many
mortgagors might choose to continue making
mortgage payments and to not (file
bankruptcy at all, file a Chapter 7
bankruptcy and reaffirm on the mortgage
debt, or file a Chapter 13 bankruptcy
without modification of the mortgagee’s
rights, as was done before Hougland.

Second, even if the mortgagee does

foreclose it may receive more than it

Page 18

a

would have received under the Chapter 13
plan due to appreciation in the value of
the property before it is ultimately sold.
This right of the mortgagee to benefit
from an increase in the value of its
collateral was recognized in Dewsnup v.
Timm, -- U.S. --, 112 S.Ct 773, 778, 116
L.Ed.2d 903 (1992). The mortgagee may
also derive rental income from the
property pending its disposition.

Third, in many cases the mortgagee
would receive more than just the value of
the residence if it foreclosed.
Institutional lenders usually obtain
mortgage insurance to protect themselves
in the event of a decline in the value of
their collateral. Such insurance may be
legally mandated for any low downpayment
loan. Under the Alaska Banking Code, no

bank may make or acquire a mortgage loan

with a loan-to-value ratio of over 90%

Page 19

unless the loan is insured or guaranteed
by a government agency or a private
mortgage insurer. AS 06.05.207(a) (4) and
(Cc). AHFC may not purchase a loan with a
loan-to-value ratio over 80% unless the
loan is the subject of private mortgage
insurance, or aé_ federal guaranty or
federal insurance. 15 AAC 118.310(a) (3).
The Federal National Mortgage Association
and Federal Home Loan Mortgage Corporation
have similar restrictions under federal
law. 12 U.S.C. Section 1717(b)(1) and
(2); 12 U.S.C. Section 1454(a) (2).
Mortgage insurance is intended to
satisfy all or a portion of the deficiency
that results when the value of the
mortgagea property is insufficient to
satisfy the entire amount remaining on the

mortgage at the time of foreclosure. In

‘Recently recodified as 15 AAC
151.020(a) (3).

Page 20

a 8 A oh ell

re Fischer, 126 B.R. 819, 823 at note 1
(D. Alaska 1992). In effect, the mortgage

insurance substitutes for the _ large
downpayment that would otherwise be
required in order to give the mortgagee
the protection of an equity "cushion" in

Fischer, at note 9.
Approximately three-fourths of AHFC’s loan

the property.

portfolio has some kind of mortgage
insurance coverage. Appendix, Exhibit
“H," page 2.

Thus, in the event of foreclosure,
AHFC or any other insured lender would
receive more than merely the value of the
property. However, the courts which have
considered the issue have uniformly held
that mortgage insurance is not to be taken
into account in valuing the mortgagee’s
secured claim in Chapter 13 cases: The

plan need only pay the mortgagee the value

of the residence, without adjustment for-

Page 21

the additional amount the mortgagee could
recover through its mortgage insurance.
Fischer, supra; Lomas Mortgage v. Wiese,
980 F.2d 1279 (9th Cir. 1992). At the
same time, the insurance does not pay off
in the absence of a foreclosure, which the
bankruptcy prevents from taking place. A
stripdown therefore represents a very real
loss to an insured mortgagee even though
the mortgagee will be paid the value of
the residence itself over time.

The State of Alaska therefore regards
the Chapter 13 stripdown device as merely
giving a windfall to a few favored debtor-
homeowners at the expense not only of the
mortgagees whose rights are modified, but
also of potential future homeowners who
will be faced with higher interest rates
or downpayment requirements as mortgage
lenders take steps to protect themselves
against possible stripdowns. Alaska’s

Page 22

cyclical economy and the coincidence that
the Hougland case was decided just as the
most recent cycle was reaching its low
point put the State of Alaska in a unique
position to demonstrate the effects of
Chapter 13 stripdowns. The stripdown
enables the debtor to lock in his or her
mortgage balance at a temporarily
depressed value, then reap the benefits as
the economy improves, property values
recover, and the mortgage pays off at an
accelerated rate.* The mortgagee, on the
other hand, is deprived of its right to
benefit from any appreciation in value and
is further deprived of the benefit of the
mortgage insurance it obtained to protect
it against any drop in value. The

stripdown thus results in a real loss to

‘For one measure of how much the
debtors have benefitted, compare the
"strip to" and “BOV" (Broker’s Opinion of
Value) columns of Exhibit F.

Page 23

the residential mortgagee, despite its
having been singled out by Congress for
special protection. The State of Alaska
therefore urges the Court to affirm the
decision of the Fifth Circuit.

II!l. CONGRESS DID NOT INTEND TO
PERM
EE STRIPDOWNS IN CHAPTER

A. The language of Section
1322(b) (2) may readily be
interpreted to prohibit
residential mortgage stripdowns.

Congress could, of course, have
chosen to permit residential mortgage
stripdowns in Chapter 13. The preceding
discussion by the State of Alaska goes
only to the wisdom of permitting
stripdowns, and not to whether Congress
might nonetheless have chosen to allow it.
It has been said that Congress is not
required to

legislate wisely, only

constitutionally. The constitutional ity

of depriving mortgagees of even the

Page 24

unsecured portion of their mortgage lien
was questioned by this court in Dewsnup,
112 Ss.ct at 779. That aside, Congress
should not readily be assumed to have
legislated unwisely, and in a manner at
odds with its obvious goals, as long as
the legislation in question may be fairly
interpreted in a way that avoids those
objections.

Such is the case with Section
1322(b) (2). Many courts have held that
the reference to "a claim secured by" the
debtor’s principal residence can only
vefer beck to the preceding reference to
“secured claims" in general, and therefore
only the part of the claim secured by the
residence--the “secured claim"--is immune

E.g., Hougland, 886
F.2d at 1184. Other courts note that the

from modification.

definition of "claim" in Section 101(5) (A)

refers to the entire claim, whether

Page 25

secured or unsecured, that "claim" is used
in the singular while "secured claims" is
plural, and that what is modified are "the
rights of holders of" claims, and not the

Matter of Nobleman,
968 F.2d 483, 488 (5th Cir. 1992); In re

Claims themselves.

Etchin, 128 B.R. 662, 668 (Bkrtcy. W.D.
Wis. 1991). These courts hold that the
statute prohibits residential mortgage
stripdowns.

These contrasting positions of the
courts, and not merely of the parties
before the courts, demonstrate that at
best the language of Section 1322(b) (2) is

Dewsnup, 112 S.Ct at 777.
This ambiguity requires examination of the

ambiguous.

legislative history of the statute.

B. The legislative history of
Section 1322(b) (2) shows a clear
intent to not depart from pre-
Code practice that did not
permit modification of a
mortgagee’s rights.

Page 26

a ee) ee

1. Under both former
Chapter XIII and
under the original
proposed version of
the Bankruptcy Code,
the residential

mortgagee’s rights
could not be
modified.

Congress did not write on a4 clean
slate when it enacted Chapter 13 as part
of a new Bankruptcy Code in 1978. The
former Bankruptcy Act had included a
Chapter XIII since 1938, entitled Wage
Earner’s Plans. Report of the Commission
on Bankruptcy Laws of the United States

(Commission Report), Part I, page 157,

reprinted in Collier on Bankruptcy, 15th

ed., Appendix Volume 2. Under Chapter
XIII, the plan could not "deal with," or
modify, the rights of any creditor holding
a claim secured by real property due to
the exclusion of such claims from the

Chapter XIII definition of claims.

Commission Report, Part I, page 165. No

Page 27

distinction appears to have been drawn
between claims fully -secured and those
only partially secured.

Nonetheless, despite the formal
inability of debtors to deal with real
property secured claims in Chapter XIII,
such claims were commonly dealt with on an
informal basis. Courts Sympathetic to the
debtor facing the possible loss of his or
her home would enjoin the creditor from
foreclosing its mortgage while the case
was pending, typically on the condition
that payments be maintained and any
default cured. Commission Report, Part I,
page 165; Hallenbeck v. Penn Mutual Life
ins. Co., 323 F.2d 566 (4th Cir. 1963).
Thus’ protected, the mortgagee would
ultimately be paid in full.

With this procedural background, the
Congressionally-authorized Commission on

Bankruptcy Laws issued its report in 1973

Page 28

ee

a te A Milt me

including a proposed new bankruptcy law
("Commission Bill"). The portion of this
report and proposed law dealing with
debtors with regular income became the
foundation of the new Chapter 13.

This proposed provision, designated
Chapter VI in the Commission Bill,
incorporated several changes from the
existing Chapter XIII that were designed
to make it easier for debtors to deal with
the claims of secured creditors. These
changes and the rationale for them were
discussed in the Commission Report:

Accordingly, the Commission
recommends that the new Act
authorize inclusion in any plan
proposed under Chapter VI, the
successor to Chapter XIII of the
present Act, provisions for the
curing of defaults within a
reasonable time and the
maintenance of payments while
the case is pending on claims
secured by a lien on the
debtor’s residence and on claims
secured by personal property on
which the last payment is due
after completion by the debtor

Page 29

Section 1322(b).

= all payments under the plan.
With respect to short-term debts

the Commission recommends that
the plan be permitted to include
provisions dealing with such
Claims severally rather than
generally as a member of a class

of creditors. The proposal does

entitled to insist that the plan
strictly preserve al] of the

terms of his original contract
if the ae
against the property of
debtor is preserved. Commi —
Report, Part Be page S06
(emphasis supplied).

These recommendations were put into

effect in the Commission Bill’s version of

Section 6-201. Provisions of
Plan. A plan under this chapter
may provide for a composition or
an extension of indebtedness, or
for a composition of some and an

—— of other indebtedness
n

(1) shall include
provisions dealing
with unsecured claims
generally, or by
classes, on any
terms, and may alter
or modify the rights

Page 30

This provision provided:

Page 31

of the holders of
such claims;

(2) may include
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;

(3) may provide for
payments on unsecured
claims to be made
concurrently with
payments on cla ims
secured by personal
property;

(4) may include
provisions for the
curing of defaults
within a reasonable
time and the
maintenance of
payments while the
case is pending on
claims secured by 4a
lien on the debtor’s
residence and on
unsecured claims or
claims secured by
personal property on
which the last
payment is due after

completion by the
debtor of all

payments under the
plan; .

Commission Report,
Part II, page 204
(emphasis in
original).

Note that, like Chapter XIII, the
Commission Bill did not generally allow a
debtor to deal with claims secured by real
property. The only exception was for
claims secured by the debtor’s residence.
With respect to such claims and long-term
debts secured by personal property, the
debtor was granted the limited authority
to cure defaults and maintain payments, a
provision very similar to the practice
that had developed under Chapter XIII.
And, while the concept of bifurcation was
explicitly recognized with respect to
short-term debts secured by personal

property, the Commission Report makes it

clear that bifurcation was limited only to

Page 32

ee ~~

such debts, and did not extend to long-
term debts or those secured by the
debtor’s residence.

The Commission’s Notes to Section 6-
201 further underline this limitation by
stating that "the secured claims referred
to in this clause [clause (2)] and in
clause (3) are only so much of the secured
creditors’ claims as do not exceed the
value of their collateral." Commission
Report, Part II, page 205, note 2.
Conspicuously absent from this comment is
a reference to clause (4) of Section 6-
201, the provision specifically dealing
with claims secured by the debtor’s
residence.

Thus, it is clear that under the
Commission Bill the claim of a creditor
secured by the debtor’s residence was not
to be bifurcated or modified in any way

other than to allow the curing of

Page 33

defaults. fhis is significant, because
the Commission Report and Bill were highly
influential in the formulation of the
Bankruptcy Code, and the effect of this
influence can be seen in the close

parallels between Section 6-201 of the

Commission Bill and _ Section 1322(b).

Given the close parallels between the

language of the two provisions, it is
reasonable to suppose that there were also

close parallels in the intended meaning of

that language.

2. The process of
adoption of the
Bankruptcy Code shows
an intent to continue
the prohibition on
modification of the
mortgagee’s rights
contained in Chapter
XIII and in the
Commission Bill.

Despite the influence of the
Commission Bill on the final version of

Section 1322(b)(2), both the original

Page 34

House and Senate versions would have
permitted modification of at least
undersecured claims secured by interests
in real property, including the debtor’s
residence. The House version completely
eliminated all protection by permitting
the plan to "modify the rights of holders
of secured claims or holders of unsecured
claims." HR 8200, 95th Congress, ist
Session, Section 1322(b)(2). The Senate
version limited the protection previously
afforded under Chapter XIII to all real
property secured claims to creditors with
“claims secured wholly by mortgages on
real property." S 2266, 95th Congress,
lst Session, Section 1322(b) (2) (emphasis
added). The language of the Senate
version is interesting, as it eliminates
any question of bifurcation. As Section
506(a) defines secured claims, all such

claims are necessarily "wholly" secured,

Page 35

making the Senate’s use of this term
redundant unless the creditor’s entire
Claim, in the Section 101(5) (A) sense, was
meant.

However, neither of these versions
became law, because residential mortgage
lenders expressed concern about the impact
of the proposed legislation on the
availability of mortgage loans. for
individuals seeking to buy homes. In re
Seidel, 752 F.2d 1382, 1385-6 (9th Cir.
1985); Grubbs v. Houston First American
Savings Association, 730 F.2d 236, 245
(Sth Cir. 1984). The State of aheste is
unaware of any testimony in favor of
stripdowns, nor of any cases dealing with
the stripdown issue that have cited such
testimony.

While testimony before Congress might
not ordinarily be considered legislative
history, courts construing Section

Page 36

1322(b) (2) have uniformly regarded this
testimony as giving insight into what
Congress intended in drafting the statute.
See, e.g., Seidel, supra; Grubbs, supra;

In re Glenn, 760 F.2d 1428, 1433-4 (6th
Cir. 1985). Congress amended Chapter 13

by adding the mortgagee clause to Section
1322(b) (2). It is uniformly recognized by
the courts that this amendment was in
response to that testimony. Because that
testimony opposed allowing stripdowns, the
only logical conclusion is that the
amendment to Section 1322(b)(2) was also
intended to deal with the subject of
cramdowns. Yet as interpreted by Hougland
and the other courts permitting
stripdowns, it does nothing of the kind.
Comparison of the proposed and final
versions of Section 1322(b)(2) provides
further proof that Congress was intending

to prevent cramdowns as to residential

Page 37

real property. The word "wholly" in the
Senate version, which had the effect of
restricting the non-modification
protection to only fully secured Claims,
was dropped in favor of the word "only."
The use of this word shows an intent to
focus on the type rather than the amount
of collateral, as a claim .-y be secured
only by real property without being wholly
secured by it. Further, the language of
the final version shows an obvious kinship
to the language of Commission Bill Section
6-201(4), which permitted only the cure of
defaults on claims secured by the debtor’s
residence. The cure provision was carried
into the Code in Section 1322(b) (5), and
the purpose of the amendment and its
relationship to the cure provision was
explained in a joint comment by the floor
managers of the Code:
Section 1322(b)(2) of the House

Page 38

ndment represents a
cnanuendas 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

the debtor’s principal residence
may be treated under _§&
1322(b)(5 of __the ___ House

, 124 Cong. Rec.

amendment.

11107 (daily ed. September 28,
1978) yn 8 of Rep.
Edwards); 124 Cong. Rec. S17424
(daily ed. October 6, 1978)
(statement of Sen. DeConcini)
(emphasis added).

The floor comment makes it clear
that, with respect to residential
mortgages, Congress was adopting the
approach of the Commission Bill and
permitting only the curing of defaults and
the maintenance of payments, and did not
intend that the residential mortgagee’s
rights could be otherwise modified. The

only plausible interpretation of the floor

Page 39

comment is that the residential
mortgagee’s entire claim, rather than just
its secured claim, was being taken out of
Section 1322(b)(2) and placed within
(b)(5)- See Landmark Financial Services
Vv. Hall, 918 F.2d 1150 (4th Cir. 1990)
(cure under § 1322(b) (5) is distinct from
cramdown under § 1322(b)(2), in that no
modification of rights is permitted).
Thus, when the legislative history of
the statute is studied in its entirety, it
leads to the inescapable conclusion that
Congress intended that the residential
mortgagee’s entire claim be protected.
From the original Chapter xIII onwards,
there is no indication that Congress ever
considered a scheme for partial protection
of a mortgagee’s clain. Under both
Chapter XIII and the Commission Bill, it
was the mortgagee’s entire claim that was
protected. Under the original House

Page 40

proposal no claim was to be protected,

even if fully secured, and under the

Senate proposal, only wholly secured
claims were protected. There is no
evidence of any proposal to Congress or
debate by Congress of the hybrid approach
of protecting only the secured claim but
leaving the unsecured claim unprotected
from modification. Because all of the
evidence provided by the legislative
history shows that Congress intended for
the residential mortgagee to have
protection for its entire claim and not
merely its secured claim, and because
there is no evidence of intent to provide
only this partial protectiqn, the State of
Alaska feels that the result reached by
the Fifth Circuit was correct and should

be affirmed.

C. Permitting stripdowns under
Section 1322 (b) (2) actually
eliminates the protection for

Page 41

residential lenders that
intended by Congress. —

1. In evaluatin

conflicting inteupretations
of the statute, it is
necessary first to
determine what purposes the

statute was intended to
serve.

The basic objectives of bankruptcy
law are to achieve just and equitable
distribution of assets to creditors and to
relieve a debtor from the weight of
oppressive indebtedness in order to give
the debtor a "fresh start." In re
Campbell, 124 B.R. 462, 464 (Bkrtcy. W.D.
Pa. 1991); House Report ("HR") 95-595, p.
118, reprinted in Collier on Bankruptcy,
15th ed., App. Vol. 2. Within Chapter 13,
the basic objective of distribution of the
debtor’s assets to creditors is modified
by making sure that the creditors receive
the value of those assets. Section

1325(a)(4) and (5). In addition to the

Page 42

purpose of giving the debtor a fresh
start, a specific goal of Chapter 13 is to
enable the debtor to protect the debtor’s
assets, particularly the debtor’s home.
HR 95-595, p. 118.

However, Chapter 13 was not intended
solely to benefit debtors. Chapter 13 was
designed with an emphasis on debt
repayment. In re Warren, 89 B.R. 87, 92
(9th Cir. BAP 1988) The legislative
history notes that "the benefit to
creditors (of Chapter 13] is self-evident:
their losses will be significantly less
than if their debtors opt for straight
bankruptcy." HR 95-595, p. 118. Because
secured creditors receive the benefit of
their collateral in any case, the losses
to which Congress was referring were those
of unsecured creditors.

Finally, the specific purpose of the

mortgagee clause of Section 1322(b) (2) was

Page 43

to protect residential mortgage lenders
and thereby assure that such lenders would
continue to make loans on affordable
terms. Glenn, 760 F.2d at 1433-4.

Congress has_ on occasions

numerous
legislated in ways to encourage home
ownership and to protect those who make
home ownership possible. Congress has
created secondary mortgage market agencies
such as the Federal National Mortgage
Association to purchase mortgages from
primary lenders, spread the risk of those
loans, and thereby reduce mortgage
interest rates and downpayments to keep
home ownership affordable. AHFC serves
the same function in Alaska. The mortgage
insurance program of the Department of
Housing and Urban Development under 12
U.S.C. § 1709 and the guaranty program of
the Department of Veterans’ Affairs under

38 U.S.C. Section 1801 et seq. serve a

Page 44

ow i

similar function. It is thus not

surprising that Congress would include a

specific provision in the Bankruptcy Code
to protect residential mortgagees.
2. The pro-stripdown
interpretation of the

statute serves none
of its purposes well,
and is in conflict
with many of then.

When the effect of interpreting the

statute to permit stripdowns is measured
against the various purposes of the
statute identified above, it is clear that
this interpretation conflicts with those

purposes. In no case does it serve those

purposes significantly better than the
construction supported by the State of
Alaska, and in most cases either serves
those purposes significantly worse or

actually runs counter to them.

The debtor’s fresh start is not

greatly aided by either construction. In

Page 45

most cases, the debtor will still be
making monthly mortgage payments long
after the plan is completed, although they
will go on longer if the mortgagee’s
rights are not modified. Nonetheless, the
debtor’s real fresh start comes from the
discharge of other debts and not
principally from the reduction of the
mortgage balance. Bankruptcy law tends to
look at the debtor’s present financial
condition and near-term rehabilitation. A
benefit that the debtor will realize only
several years in the future would not have
weighed very heavily in the scales when
Congress was drafting the Code.

The purpose of enabling the debtor to
keep his or her residence is also not
Significantly better served by permitting
stripdowns. The debtor must still cure
any pre-preition default under Section
1322(b)(5), even if the amount of the

Page 46

default is fully unsecured. Sapos v.
Provident Institution of Savings, 967 F.2d
918, 927 (3rd Cir. 1992). Practically
speaking, a mortgagee assured of full
repayment because its rights cannot be
modified is much more likely to work with
the debtor to come up with a workable plan
than is a mortgagee facing a loss because
of the modification of its rights.
Moreover, if Congress’s primary
purpose was to enable the debtor to retain
his or her home, including the mortgagee
clause in § 1322(b)(2) was the wrong way
to go about achieving this purpose.
Because of the prohibition on modification
of the mortgagee’s rights, whether or not
limited to its rights in its secured
claim, the amount of the monthly mortgage
payment cannot be reduced. Seidel, 752
F.2d at 1384-5. Typically, the monthly

mortgage payment will be the largest

Page 47

Single expense in the debtor’s budget. In
many cases, the debtor’s inability to
modify the mortgagee’s rights and lower
the mortgage payment will prevent the
debtor from proposing a feasible plan and
assures that the debtor will in fact lose
the house.

The pro-stripdown construction of the
statute also conflicts with the purpose of
reducing the losses of unsecured
creditors. If the mortgagee’s rights in
the unsecured portion - its claim cannot
be modified, so that the mortgagee must be
paid in full, there will be no
distributions to the mortgagee under the
plan other than those necessary to cure
any default under Section 1322(b) (5). All
other plan payments can go to other
unsecured creditors, thus maximizing their
recovery. But if the mortgagee’s rights
can be modified, then the mortgagee’s

Page 48

ee ee an

unsecured claim must' share in the
distributions to unsecured creditors. As
the mortgagee’s unsecured claim may be a
substantial portion of the total unsecured
claims, this will greatly reduce the
distributions to other unsecured creditors
and thereby increase their losses over the
situation where no modification of the
mortgagee’s rights is permitted.

Again, if a primary purpose of
Congress in enacting Chapter 13 was to
reduce the losses of unsecured creditors,
including the mortgagee clause in §
1322(b) (2) was the wrong way to go about
achieving this purpose as well. By
preventing the monthly mortgage payment
from being reduced, Congress reduced the
amount of disposable income available to
apply to the payment of unsecured claims,
including the unsecured claim of the

residential mortgagee. If it were not for

Page 49

the mortgagee clause, the debtor would be
able to reamortize the mortgagee’s secured
claim over the remaining life of the loan,
thereby reducing the amount of the monthly
mortgage payment. This would not only
assist the debtor in the debtor’s fresh
start, but would free up additional
disposable income to apply to the payment
of unsecured claims, including that of the
mortgagee. Thus, as interpreted by the
cases finding in favor of stripdowns,
Congress’s use of the mortgagee clause is
detrimental not only to the goal of
increasing the payments to unsecured
creditors, but to the goal of protecting
the mortgagee as well.

This interpretation of the mortgagee
Clause conflicts with the purpose of
protecting the mortgagee in other ways.
By limiting the protection available to
the residential mortgagee to the secured

Page 50

portion of its claim, the practical effect
of the this interpretation is to prevent
only modification of the amount of the
monthly mortgage payment and the interest
rate on the loan. Neither of these
protections is very useful, and in
particular cases may actually be
detrimental.

Prohibiting modification of the
monthly payment amount is of limited
benefit because the present value of the
payment stream remains the same. On the
other hand, prohibiting modification of
the interest rate may put the mortgagee in
a worse position than other secured
creditors despite its "special
protection." In general, the appropriate
discount rate to use in determining the
periodic payments to be made on a secured

claim is the market rate of interest for

comparable loans. In_re Camino Real

Page 51

Landscape _ Maintenance Contractors, 818

F.2d 1503, 1505 (9th Cir. 1987). Thus,
the residential mortgagee will actually be
treated worse than other secured creditors
if the market rate of interest is higher
than the contract rate of interest,
because the mortgagee clause prohibits
modification of the mortgagee’s rights by
increasing the rate of interest. This
freezing of the rate of interest is a
reasonable tradeoff when the mortgagee is
being paid in full, but not when its
rights in the unsecured portion of its
Claim are subject to modification.

Thus, it can hardly be said that
interpreting the mortgagee clause to
permit stripdowns offers the residential
mortgagee any meaningful protection for
its secured claim, let alone the "special
protection" that was intended by Congress.
A statute should not be interpreted so as

Page 52

to render a part of it inoperative. In re

Nobelman, 129 B.R. at 98 (N.D. Tex. 1991),

and cases cited therein. Instead, it must
be assumed that Congress worded Section
1322(b)(2) as it did to serve some
purpose. In re Woodall, 123 B.R. 95, 98
(Bkrtcy. W.D. Okla. 1990). Interpreting
the statute to permit stripdowns violates
this precept by robbing the mortgagee
clause of any purpose. When interpreted
to permit stripdowns, the mortgagee clause
provides only limited protection to the
mortgagee and at the same time is
detrimental to the other purposes of the
statute. The payment to unsecured
creditors is lessened, both because the
unsecured portion of mortgagee’s claim
must share in distributions and because
the mortgage payment may not be reduced.
For the same reason, the debtor’s ability

to retain the residence is reduced and his

Page 53

or her fresh start is impeded or at least
not significantly assisted. In contrast,
prohibiting modification of the
mortgagee’s rights in its entire claim not
only does provide the intended special
protection to the mortgagee but supports
the other purposes of the statute as well.
Payments to other unsecured creditors are
increased, and the debtor’s ability to
retain the residence and achieve a fresh
start are not significantly impacted, and
may be improved.

In short, the only construction of
the statute that is consistent both with
its legislative history and with the
recognized purposes of the statute is that
Supported by the State of Alaska. The
State of Alaska therefore requests that
this court affirm the decision of the
Fifth Circuit.

IV. THIS COURT’S DEWSNUP DECISION

Page 54-

a a Se

PON
CITLY REJECTS THE REASONING U
endo HOUGLAND AND OTHER CASES PERMITTING
STRIPDOWN ARE BASED.

06 (d)
A. Dewsnup held that Section 5

did not permit a stripdown in Chapter
7 .

In Dewsnup v. Timm, 112 S.Ct. 773
(1992), the Court held that a Chapter 7

debtor could not make use of Section 506
to stripdown an undersecured creditor’s
lien to the value of the property securing
the lien. Because Section 506 is relied
upon in Hougland and other stripdown cases
to permit an identical stripdown in
Chapter 13, the reasoning of Dewsnup
obviously has a bearing on whether those
cases are correct.

In Dewsnup, the Court held that
"Section 506(d) does not allow (the
debtor] to ‘strip down’ (the creditor’s)
lien because [the creditor’s] claim is
secured by a lien and has been fully

allowed pursuant to Section 502." 112

Page 55

S.Ct. at 778. The Court reasoned that
this would have been the result under pre-
Code law, where a lien on real property
passed through bankruptcy unaffected,
apart from reorganization proceedings.
112 S.Ct. at 778-9 (citing former 11
U.S.C. § 616(1) and (10)). The Court
further reasoned that Congress must have
been aware of this practice when enacting
the Bankruptcy Code in 1978. Because
allowing lien stripdowns would have been a
major change from pre-Code law, it should
have been discussed in the Code’s
legislative history. In the absence of
such a discussion, the Court ruled that to
attribute to Congress an intention to make
that change “is not plausible, in our
view, and is contrary to basic bankruptcy
principles." 112 S.Ct. at 779.

B. The reasoning of Dewsnup ap
plies

with equal force to stri

Chapter 13. “peel

Page 56

The Court expressed no opinion as to
whether the words "allowed secured claim"
as used in Section 506(d) have the same
meaning in other provisions of the Code.
However, Section 506 is a provision of
general application applicable to Chapter
13 as well as to Chapter 7 proceedings.
Section 103(a); Hougland, 886 F.2d at
1183. Nothing in the Code suggests that
Section 506(d) should have a different
meaning in Chapter 13 than it does in
Chapter 7, and normal rules of statutory
construction require that it be given the
same meaning. Sullivan v. Stroop, 496
U.S. 478, 110 S.Ct. 2499, 110 L.Ed.2d 438
(1990).

Further, just as with Chapter 7,
there is no indication in the legislative
history of Chapter 13 that Congress
intended to effect a major change in pre-

Code practice by permitting stripdowns on

Page 57

the debtor’s residence. As noted above,
pre-Code practice did not permit the
stripdown of liens on the debtor’s
residence in Chapter XIII. Allowing such
stripdowns would be a major departure from
pre-Code practice that should have been
the subject of explicit discussion in the
legislative history, according to
5

wsnu In the absence of such

discussion, the only conclusion that can
be drawn is that no change from prior
practice was intended by Congress. For
this reason also, the Fifth Circuit should

be affirmed.

C. No separate provision of Chapter
13 allows stripdowns.

° The only explicit reference in the
legislative history to the final version
of Section 1322(b)(2) is the floor comment
quoted in Part III.B. above, to the effect
that claims secured by the debtor’s
residence were to be treated under the
cure provisions of Section 1322(b) (5),
which were adapted from the prior practice
under Chapter XIII.

Page 58

Because Section 506(d) must be
interpreted the same way in Chapter 13 as
in Chapter 7, the Dewsnup opinion means
that Chapter 13 debtors may not rely on
Section 506(d) in order to stripdown a
mortgagee’s lien to the value of the
property securing the lien. In order for
a stripdown to occur in Chapter 13, it
must therefore be based on some other
provision of the statute.

No explicit provision for the
avoidance of liens appears in Chapter 13.
The closest approach is the general power
to modify "rights" contained in Section
1322(b) (2). However, this cannot be read
as the equivalent of a power to modify
liens. Where Congress intended for the
debtor to have the power to modify or
avoid liens, it provided that power
explicitly, rather than leave it to

implication. For example, Section 522(f)

Page 59

gives the debtor the explicit power to
avoid liens in certain exempt property.®
Section 1123(a)(5)(E) provides that a
Chapter 11 plan may provide for "the
satisfaction or modification of any lien,"
a provision with no counterpart in Chapter

13.’

a

A Chapter 11 plan may also impair the

rights of any class of claims. Section

® Section 522(f) is a provision of
general application applicable in Chapter
13. It would entitle the debtor to avoid
a judicial lien against the debtor’s
residence, as Section 1322(b)(2) protects
only “security interests." The types of
exempt property listed in Section 522(f)
as subject to lien avoidance are
consistent both with the approach of
Commission Bill Section 6-201 (stripdowns
only on short-term personal property
secured claims) and the legislative
history of the Code, which refers to
stripdowns only of household goods and
personal effects. HR 95-595, page 124.

’ It was, however, taken directly from
former 11 U.S.C. Section 616(10), which
the Supreme Court in Dewsnup cited as an
example of where stripdowns were permitted
under the former Bankruptcy Act.

Page 60

—— |

1123(b)(1). As defined in Section 1124,
"impair" means essentially the same thing
as "modify." Appeal of Capps, 836 F.2d
773, 776 (3rd Circuit 1987). If the power
to impair or modify creditors’ rights
included the power to modify or avoid
liens, the separate power to modify or
satisfy liens contained in Section
1123(a)(5)(E) would be redundant. A
statute should not be interpreted so as to
render a portion of it superfluous. In re
Oxborrow, 913 F.2d 751, 754 (9th Circuit
1990). Thus, a power to impair or modify
a creditor’s rights is something different
from and does not include a power to avoid
or modify a creditor’s lien.

Because of this, Section 1322(b) (2)
cannot be read as giving Chapter 13

debtors a power to avoid liens. That must

be left to other provisions of the Code,

Page 61

none of which are applicable here.® For
this reason also, the Fifth Circuit should
be affirmed.
V. CONCLUSION

While Alaska’s recent experience with
property value swings and stripdowns is
unique, any state or region can be
suddenly hit by severe local recessions
that temporarily depress property values.
Congress was aware of this in 1978 when it
enacted the Bankruptcy Code. No logical
reason exists for turning a temporary drop
in value into a permanent windfall to the

mortgagor-debtor and into a permanent loss

® This does not render Chapter 13
debtors powerless. Under Section 522(f),
even oversecured liens may be avoided in a
wide range of exempt property that covers
practically everything the debtor owns
other than house and car. A Chapter 13
bankruptcy is not a “reorganization"
proceeding. In re Fischer, 136 B.R. 819
(D. Alaska 1992). Chapter 13 is only a
vehicle for the adjustment of the debtor’s
debts, and a general power to avoid liens
is not necessary to accomplish this goal.

Page 62

to the mortgagee, and nothing in the
legislative history of Section 1322(b) (2)
suggests that Congress intended this
result. Instead, the legislative history
suggests that Congress intended to protect
residential mortgagees by prohibiting
stripdowns and continuing the pre-Code
practice of permitting the debtor to cure
defaults and maintain payments while the
case was pending. This result is more
consistent with the overall goals of
Chapter 13 and of Congress’s acknowledged
objective in Section 1322 (b) (2) of
protecting mortgagees. Nor is there any
evidence that Congress intended for there
to be a general lien avoidance power in
Section 1322(b)(2), and no other lien
avoidance power could apply to the
residential mortgagee’s lien. For these
reasons, the State of Alaska respectfully

urges the Court to affirm the decision of

Page 63

the Fifth Circuit in this case.

Page 64

Charles E. Cole
Attorney General of the
State of Alaska

Counsel of Record for
Amicus Curiae

1031 W. 4th Avenue #200
Anchorage, AK 99501

Mary Ellen Beardsley
Assistant Attorney General
of the State of Alaska
1031 W. 4th Avenue #200
Anchorage, AK 99501

Richard Ullstrom

Routh & Crabtree, P.C.
Attorneys At Law

P.O. Box 93350

Anchorage, AK 99509-3350

APPENDIX

EXHIBIT A

STATISTICAL
DATA BASE: AHFCMSTR-MINI
MORTGAGE LOANS BY

AHFC DIRECT SERVICING
AHFC--REAL ESTATE HELD

ALASKA FEDERAL S & L *RHD
" ALASKA FEDERAL SAVINGS & LOAN
ALASKA USA FEDERAL CR. UNION
ALASKA USA FEDERAL CU *RHD
BANK OF AMERICA

BANK OF AMERICA ALASKA

MORTGAGE CORPORATION

DENALI STATE BANK

FEDERAL DEPOSIT INSURANCE CO
FIRST BANK

FIRST BANK *RHD

ee HOUSING FINANCE CORPORATION

ABSTRACT
LIB POSTED TO 09/30/92
SELLER SERVICER

PERIOD ENDING: SEPTEMBER 30,1992

NUMBER AMOUNT
40 $902,522.17
673 11,270,780.58
15 1,085 185.42
904 71,678,925.12
8,341 625 , 389,448.16
128 14,275,231.02
441 27 ,907 ,674.77
1,564 127 840,727.47
233 20,931, 184.43
218 17, 907,756.41

2 71,572.12
178 15, 380,031.59

120 10,058, 190.59
5,059 376,813.224.99
858 81,968.573.76

INTERIOR REGIONAL HSG. AUTH 7 434,153.47
KEYCORP MORTGAGE, INC 3,305 246,646,412.22
KODIAK ISLAND HOUSING AUTH 34 2,878,012.24
KODIAK ISLAND HOUSING AUTH"RHD 290 30,955, 154.17
LOMAS & NETTLETON CO *RHD 6 417,547.89
MT MCKINLEY MUTIAL SAVINGS*RHD 1 14,540.84
MT. MCKINLEY MUTUAL SAVINGS 467 36,993, 450.89
NANA REGIONAL HSG. AUTHORITY 19 1,339,418. 29
NATIONAL BANK OF ALASKA 13,637 1,092,880,352.89
NATIONAL BANK OF ALASKA *RHD = 805 80,271, 179.94
NORTHRIM BANK *RHD 1 1,021, 504.16
NORTHWEST INUPIAT HOUSING “RHD 1 55,586.05
PUGET SOUND 5 5,215,804. 25
RURAL HOUSING DIVISION *RHD 1 100,000.00
SEATTLE MORTGAGE 319 28, 133,393.80
SECURITY PACIFIC SAVINGS BANK 1 1,296, 143.65
SOURCE ONE MTG SERVICES CORP. 2,827 216, 982,857.16
TLINGIT-HAIDA REG. HOUS. AUTH 37 2, 325,230.67
TLINGIT-HAIDA REGIONAL HSG"RHD 164 12, 125,759.56
WESTERN MORTGAGE LOAN CORP. 118 11, 380,651.87
1ST NATIONAL BANK OF ANCH * 336 29, 395,031.50

41,155 $3,204,343,214.11

120

EXHIBIT B

rage

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BEST AVAILABLE COPY

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*Based on duty 1 MOA survey, U.S. Conmus April 1. 1980 was 226.338.

Sources: 1980 based on U.S. Census; all others MOA

3 9095 00626415 9

Anchorage Population

go" 91

92

Community Planning & Developmert estimaies.

Anchorage Alaska Anchorage Anchorage Alaska Anchorage
Year Populaben Population % of Mas Your Population Popwisuon % of Suse
1929 2.738 50.278 +7 1975 177,817 384.100 7m
1938 4228 72.524 5 1976 178.637 408 B00 som
1950 30.080 128.643 23.4% 1977 182.920 4186 00O 2%
1960 @2.833 226.167 «se 19768 180.246 411,800 osm
1961 tied 230 0Be 37.7% 1978 174.504 413.700 22%
1962 0.148 242.817 37.1% ae 174,431 401 851 43.4%
1963 7 oes 248.906 37.% 1061 187,761 433.800 43.3%
1906 ose 253.204 37.2% 1982 204.218 465 200 4.9%
1965 102.337 206.102 “wo oe 730 be 4@7 800 eat
1906 106.825 271,505 2.0% he ’ 244 030 822 000 aer™
1967 107 B17 277 906 «8% om ) 244.263 538 600 Om
196s 113,822 264 880 38.8% weet 246.138 $47 600 “nm
968 114,160 204 560 34.8% 1987 229.117 637,200 42.0%
1970 126.385 302.3681 1% \oes 218,979 631.000 412%
1e71 136,777 318.600 429% 1ese 221 470 534 400 41.5%
1972 144216 328 800 arm! 1980" 730 188 850.043 41.1%
1973 140 440 336 400 44 4% 1901 237.907 570.300 41.7%
e764 162.408 348 100 2m 1902 240.268 N/A MUA

* This is based on « July 1, 1900 MOA survey.

The April 1, 1990 Census counted 226.356 residents.

Source Compiled by MOA Community Planning & Development Department trom U.S. Census data. Alaska
Departnent of Labor estimates and MOA estimates.

Page 2

Home & Condo Sales Prices

Anchorage
1981 to 1991

\\\\

Source: Anchorage Multiple Listing Service.

Housing Vacancy Rates by Type

Anchorage (Except Turnagain Arm) 1992

Single Family
2-4 Plex Units
5+ Plex Uniis

7.4%

Mobile Homes

=

2.0% 2.0% 4.0% 6.0% 8.0%

Source: MOA Community Planning & Development Department survey.

Page 3

EXHIBIT C

WHOLE EARTH CATALOG

July 1986

Page l

ALASKA HOUSING FINANCE CORPORATION

Selected Information

Number Amount
Loans owned at 6/30/86 51,969 $ 4,332,054,925
Outstanding loan commitments at 6/30/86 2,505 $ 292,069,227
Bonds outstanding at 7/31/86 $4,757, 933,425

Delinquency Rates

Mobile Homes

First Mortoage Loans

AHFC at 6/30/86 AHFC at 6/30/86

30 days 7.36% 4.70%
60 days 3.26% 1.49%
90 days or more and

loans in foreclosure 4.89% 2.96%
Total Delinquent and

in Foreclosure 15.315 9.153
Real Estate Owned 6.423 1.333

Budget Information

rati
Actual amounts Fiscal Year 1982 $2,276,200
Actual amounts Fiscal Year 1985 3,441,000
Actual amounts Fiscal Yeer 1984 2,713,000'1)
Actual amounts Fiscal Year 1985 2,913,900(1)
Approved budget Fiscal Year 1986 3,311,90047

U.S. st 3/31/86 *

3.60%
0.96%

Capital

$265 ,000 ,000
150,000 , 000
49,051,000

(1) Exeludes trustee fees which are included in the capital budget.

* Delinquency statistics from the National Delinquency Survey published by

the Mortgage Sankers Association.

** Statistics on real estate owned are not provided by the Mortgage Bankers

Association.

Page 2

ALAGKA HOUSING F LANCE CORPORATION
MORTGAGES HELD BY CITY @@ DISTRICT
UE WD, 1%
city ACTIVE 1¢ PRINC LPAL lo
MORTGAGES FOR TGAGES BALACES DOLLARS
soeeeeseeees + ++ oeeee «DISTRICT TOTALS teeseseceeecesoeseeecosesesececeece
RALG 1,14 2.2 67,35, 186.9% 2.0%
HOOMRH 2m 373 10,002,551. 12 249
ELF IN COVE et 1.278 51,222,933. 4 1. 82
KE bay 3,513 6.760 286, 210,245.45 6.421
CHIT INA 712 1.370 44, 323,048.83 1.195
POLreR 4,639 8.927 373, 586, 726.57 6.024
RAE =—.215 M4. 142 2,617, 765,664.87 0.428
ACHR POINT 2,743 5.278 206, 705, 600.60 4.772
KOD Lam 72 1.388 53,895, 541.08 1.24
SA® POLIT 2 oA 2,085,014.60 048
DILLINGHAA so 0% 3,575, 760.23 083
AN LAR 175 7 12,747 608.50 2
ADA 24 046 2, 189,600.28 1
ETE AB OF a) 16, 226,262.08 375
ESTER 6,765 13.018 547,013, 682.59 12.627
BARR OM a1 1% 5,747,735. 14 13
NOPE od 19 5,991, 842.8 1%
+ +++oo+ + + POotooeoe CREA TOTALS +oooo+ POPPPEPPOEE +++ OS Potted
CMCHORAGE MUNICIPALITY D215 34. 1415 $2,617, 765,664.87 60.4279
PAT-SU VALLEY BOROUGH 4,002 6.656 $371, 176, 993.09 6.5681
SOUTH CENTRAL ALASKA
(EXCLUDING ANCHORAGE /MAT-SU) 4,489 8.4380 $331, 732,307.40 7.6622
TOTAL SOUTH CENTRAL 9,3 75.67500 $3,320,874, 965.56 7.65900
FAIRBANKS NORTH STAR BOROUGH 6,762 13.0198 $546, 631,590.93 12.6229
WORTHERN ALASKA
(EXCLUDING FAIRBANKS) 7 723 $28, 147,931.74 .b497
TOTAL NORTHERN ALASKA 7,107 13.7400 9574, 979, 522.67 13.2730
JUNEAL) BOROUGH 3,453 6.0444 $284 , 209, 836.58 6.5606
SOUTHEAST ALASKA
(EXCLUDING JUNEAU) 2,072 3.9870 $151, 981,080.31 3.082
TOTAL SOUTHEAST 5,52 10. 63200 436, 190,916.89 10.06800
+ PPPOE P+OOEF POFFO OF TOTAL AL Lows a aie a ed +Ooeo+ FOFeoooe
TOTALS 51,968 100.000 4, 332,045, 405. 12 100.000
Gide
Page 3

EXHIBIT D

Ala iN

Housing

FINANCE CORPORATION

STATISTICAL ABSTRACT

DECEMBER 1988

Page l

CSASUM

ALASKA HOUSING FINANCE CORPORATION EXHIBIT E

SELECTED INFORMATION FOR MONTH ENDING: 12/51/88

NUMBER x DOLLAR x
MORTGAGE LOANS 41,845 84.52 53,471,316,829 91.91
REAL ESTATE OWNED 4,545 9.18 271,805,544 7.20
INSURANCE RECEIVABLE 3,122 6.31 33,599,058 .89
TOTAL LOANS OWNED: 49,508 100.00 3,776,721,432 100.00
BONDS AND NOTES OUTSTANDING 3,851,109,539

DELINQUENCY STATISTICS. Mortgage Loans less Mobile Homes II: (2) (3)
Mortgege loans -

30 days pest due 1,740 4.44 152,568,233 4.50
60 days pest due 679 Reve 61,279,400 1.81
90 days past due 4465 1.14 38,955.748 1.15
120 deys or more 2,288 5.84 210,786,055 6.22
TOTAL DELINQUENT LOANS: £5,152 13.15 463,589,437 13.67
OPERATING BUDGET: 1989 1988 1987
Fiscel Year Fiscel Yeer Fiscal Yeer
TOTAL BUDGET: (1) 5.924.100 5,801,200 3,741,900

(1) Budget excludes trustee fees and property maintenance,
management and disposition costs associated with owned reel
estate end mobile homes. 1987 and 1988 ere sctusl operseting
expenses; 1989 figures reflect the suthorized budget.

(2) Delinevency rates include loans in foreclosure.

(3) Delinavency statistics sre as percentage of Mortgage loans less
Mobile Home II loans.

Note: Deller figures calculated to penny accuracy, but printed in
truncated dollers.

-l-

Page 2

1986 1,804
1987 3,599
1988 3,847
1989 3,035
1990 1,432
1991 519
1992 310
1993 (Through 2-4-93) 29
Total 14,575
Source is Alaska Housing Finance
Corporation.

*DIL is for Deed in Lieu of Foreclosure.

EXHIBIT F

CONFIRMED AHFC CHAPTER 13 STRIPDOWNS

Ong. Note | Current | | Conf. | Swip | |
AHFC #17 Amount Balance ~~ Date From we
6776| 01/06/81 $75,000 $53,805 11/21/90| _ $67,745 $59,000
9527/| 05/31/83 $101,300 $23,735 06/21/90 $91,140 $47,633
29306| 08/07/81 $57,000 $11,768| *| 07/23/90| _$51,978| _$21,390
30506 1 $57,000 _$29.062 10/31/91 $52,033. 000
39334| 08/03/62 $76,950 $1,915 06/06/90 $71,971 $17,738
57767| 01/1 $80,500 $30,469 02/15/91 842) __ $43,500
66920| 11 $96,750 _$28,71 _05/09/90| _ $92,749/ $51,150
71760} 07/29/85 $90,000 | $25,746 04/11/90! $87,266! $46,000
71937 $99,000 $59,456 10/17/91 $92,371 $68,500
78122! 07/08/86 $50,250 $o 01 $49,232 $9,500
105220/ 06/16/87 $110,000| $49,513 01/13/92} $105,208| $57,000
107702| 04/07/88 $110,000) $45,403; *| 03/09/90) $112,225| $60,351
107721 $105,000 / $45.525| *| 01/25/91 _ $110,201! $56,730
107907| 04/21/88 $130,450) $83.507' *| 09/13/90| $132,284) $98,000
108954/ 06/01/88 $75,000 | $74.290| | 03/15/90 $75,.933' $33,000
_110782| 9 $121,450) $93.556| *| 03/19/90) __$120.533! _ $102,000
112354! 11/07/88) $74,200 | $22,047 | 02/27/90! _$73,787| $34,410
113451| 11/04/88 | $58,750 | $12,742) 05/22/90! _—‘ $57,359; $24,680
114909/ 1 | $102,100) $39,345 05/06/91} $100,794; $49,290
115195) 09/14/88 $75,950 | $18.956| *| 07/11/90} _$77,989| $32,550
115704| 08/01/88 $109,250) $48.300! *| 10/19/90) $116,044) $63,142
115708| 09/01/88' —_— $146,300 $97.464) | 06/90! $148682' $112,000
117624} 03/09/89 $104 000 $68,151 09/14/90! $102,388 $75,622
117036} 01/31/89 $113,750 $108 899 _12/18/91| $110,646! —_ $80,000
118102/ 01/26/89 $118,450 $114 427 $114.736| $98,000
118525| 11/29/88 $140,000 $111,487; *| 06/11/90! $145,434; $120,900
| 121215] 01/06/89 $90,700 | $85,159 01/20/93; $85,159! $56,600
Totals

$2,569,100 $1 383 439 5

* AHFC notification date as actual confirmation date s unavailable due to Lime oo ai this time.

Page 1

$2,519,729 $1,550,686

CONFIRMED AHFC CHAPTER 13 STRIPDOWNS

Srp T Si | mised |Pre-HOAP| Note | BoVv
Fee — re ee TS amour
$67,745| _ $59,000 $8,745 $61,000
$91,140) $47,633) $43,507} $52,000
$51,978) $21,390) _ $30,568

033 000 033| _ $32,000
$71,971| $17,738) $54,233) $18,321
$73,642) $43,500) $30342) _ $40,000
$92,749 $51,150 $41,599 $55.000
$87,.266| $46,000! _ $41,266) _ $38,000
$92.371| $68500! $23,871| $68500
$49 232 $9,500' $39,732 $9 500
$105,208| _$57,000| $48208| $57,000
$112,.225| $60,351 $51,874 06/15/84
$110.201| $56,730 = $53.471| $56,730) 02/04/85
$132,284) $98,000! $34.284| = $98.000/ 12/13/83
$75,933) $33,000! $42933| $33,000) __ 05/16/85 |
$120.533) $102,000! _$18533| $102,000) _ 01/21/83) __ $127,000
$73,787| $34410' $39,377) 03/27/84| __ $75,000
$57,359 $24680' $32.679 01/19/83| __—- $61,750
$100,794 $49.290' —$51504) $50000!_ 11 $107,350
$77,989! $32550| $45,439) $35,000) _ 08/10/83
$116,044) $63,142! $52902) $72000) 10/05/84
$148.682' $112.000' $36.682! $112,000!) 08/05/86
$102,368! _$75,622' $26766| $77,000! _04/03/85|_— $100,000
$110,646) $80,000! $30646) $80000) 07/11/84) $115,600
$114,736) _$98,000' —$16,.736/ $98,000! 12/14/83) __— $119,200
$145,434) $120,900! $24.534/ $130,000) 07/13/83
$85,159 $56,600' $28,559 $51.000; 11/08/83 $91 500

$2.519.729 $1,550 686 $969,043 5

Page 2

EXHIBIT G

peceiveY

ISER RESEARCH SUMMARY

Institute of Social and Economic Research, University of Alaska, Anchorage November 1986, B.S. No. 32

AHFC’s Market Effects, 1980-1986

If you moved out of a rented apartment and
bought a house in Alaska during the past six years, or
if you bought a bigger or better house than you
owned before, chances are good the Alaska Housing
Finance Corporation (AHFC) subsidized your mort-
gage interest rate or offered you other special loan
terms. AHFC financed 80 percent of new Alaska
mortgages in the 1980s.

A recent study by the University of Alaska,
Anchorage’s Institute of Social and Economic Re
search (ISER) found that between 1980 and muid-
1986 AHFC's programs allowed Alaskans to buy
more and better houses: about 8,000 households that
woyld otherwise have rented were able to buy;
roughly 11,000 households that would otherwise
have bought condominiums or mobile homes were
able to buy single-family houses; and overall, the
roughly 58,000 Alaska households that bought
through AHFC spent about 15 to 20 percent more
(buying bigger or better houses). Figure 1 illustrates
some of the effects of AHFC on Alaska's housing
quality.
But did AHFC's subsidized interest rates and
other policies designed to help more Alaskans buy
homes also drive up prices? Are AHFC’'s loan policies
in part responsible for the growing number of mort-
gage defaults, now that Alaska’s economy is in a
slump? And how much demand might there be for
AHFC mortgages in the coming years?

The ISER study—done for AHFC—broadly ex-
amines how AHFC's residential mortgage loan pro-
grams have affected the Alaska housing market in the
1980s, and includes a model to project future mort-
gage demand.

Finding Highliat

e@ The biggest effects of AHFC's programs have been
on the number and quality of houses sold rather
than on ST en iain to
ee oe ee

1980s. AHFC’'s interest subsidies
contribute to sharp price increase in the

early 1980s, because those subsidies rapidly in-

creased demand. But higher prices stimulated new

as much as 12 percent if AHFC had not subsidized
rates.

increased Vaive of All AHFC Homes

Figure 1. Selected Effects of AHF™ on Alaska Housing Quality, 1980-1986

Increased Sales of Single-Family Houses

AHFC Financed 39.000 Single Farm iy Houses

ISER © 1961-1986 © 25 YEARS OF SERVICE

Page l =

EXHIBIT H

ip bi EEE
si EH,
ile |i >) il THE
uh i (01 Haid
te | P:dbbsetee
al) ae
HE La ik ly
rit catatuange oo pues HHS Ht
a aN
me ie Hi fit it aH in
al il iat ate
ae fi near
sibel hii ul iE Hit 7
pai Hu it HL
Han Tite PY tint aH He

This summary is based on Ettects of Changes in the

Alaske Housing Finance Corporation -
Matthew Berman and Lee Muskey. The ty nc ,

available for 10 cents a page from (SER ai 3211 Providence
Drive on the UAA campus, phone 786.7710.

iii

gekoef

Insitute of Sees! ond Economu Messe ch
€ Lee Gorman Oweerer

RESEARCH SUMMARY (We. 32)

Uneverety of Aiashs Anchorage
3211 Prewdence Orwe
Anchorege Alecks 99508

Page 2

Ala WN

Housing

FINANCE CORPORATION

STATISTICAL ABSTRACT

Page l

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0361%3A17. Public record. Not legal advice.