This is an appeal from an order confirming a Chapter 13 plan. The parties stipulated that the fair market value of the residence which was collateral for the secured creditor was $55,000.00. The bankruptcy judge reduced this by 7% for transaction costs if the property was sold, to $51,150.00, and allowed a secured claim for that amount. The creditor appeals on several grounds.

     First, the creditor argues that the 7% transaction costs should not be subtracted. The parties evidently agree that the real estate will not actually be sold. Under 11 U.S.C.
    2 ABR 2  §506(a) the value must be determined "in light. . . of the proposed disposition or use of such property." Since the proposed disposition will not involve any 7% transaction costs, as sale of the property would, these costs should not have been subtracted. In re Case v. United States, 115 B.R. 666 (9th Cir. B.A.P. 1990).

     Second, the creditor argues that mortgage insurance should have been included as part of the mortgagee's secured claim. The bankruptcy judge correctly determined that it should not. This is nothing like the issue in In re Malody, 102 B.R. 745 (9th Cir. B.A.P. 1989), involving whether a car should be valued at wholesale or retail. The measure under §506(a) of the allowed claim is "the extent of the value of such creditor's interest in the estate's interest in such property." The bankrupt estate has an interest in the real property, and that is the basis for the measurement. The bankrupt's estate has no interest in the mortgage insurance, so the creditors interest in the bankrupt's interest in the mortgage insurance is zero. The creditor has an interest in the mortgage insurance as a promisee, but that is not equivalent to "the estate's interest in such property," referring to the real estate upon which there is a lien.

     The appellant's third argument is that In re Hougland, 886 F.2d 1182 (9th Cir. 1989) is mistaken and should not be followed. A district court in the 9th Circuit must follow a 9th Circuit Court of Appeals decision, and it is not for the district court to decide whether the court of appeals was right or wrong.

     The bankruptcy judge's order is reversed and remanded with regard to the 7% transaction costs, and is in all other respects affirmed. This decision and order shall serve as the mandate. The oral argument set for May 21 is unnecessary, and the setting is vacated.

May 6, 1991

Andrew J. Kleinfeld, Judge