WASHINGTON – The establishment of tribal land records offices likely will lead to more mortgages being made on American Indian homelands, a study by the National Congress of American Indians and First Nations Development Institute has found.

The study looked at three tribes involved in a BIA pilot program to contract out title processing to tribes, as well as two other tribes that made partial efforts to do their own land and title work.

One of those tribes, the Saginaw Chippewa of Michigan, turned routine delays of a year or two in getting TSRs into 24-hour turnarounds that have helped 200 tribal members get mortgages.

However, the study warns tribes that want to get involved in becoming more self-reliant for title work that the BIA significantly underfunds these efforts, meaning a significant outlay of tribal cash.

BIA trust status reports (TSRs) are a notorious bottleneck to making mortgages on reservations, and the study comments “the intolerably slow title process on Indian land presents at least three challenges – to sovereignty, to economic development, and to equity.”

It notes that American Indians that want to take out a mortgage on trust lands “face a barrier to their dream that is not faced by any other person or community in America.”

Sovereignty is affected, according to the study, by putting up barriers to projects a nation wants to implement. Economic development is hindered by the same barriers – “Tribal leaders and tribal members are frustrated by the lengthy and often unnecessarily complex process required to obtain a TSR. This frustration leads some, both leaders and citizens, to give up completely on dreams of homeownership for tribal members and successful economic development for the tribe.”

The study also found at least one case where a lender grew frustrated at the barriers to participating in the Department of Housing and Urban Development’s section 184 guaranteed Indian mortgage program and withdrew.

The five tribes studied provided “remarkably different tribes that share very similar experiences as they attempt to transform the title process for their communities.”

One complicating factor in title conversion is the BIA’s TAAMS system (Trust Asset Accounting Management System). Having close access to TAAMs, especially by having a BIA agency on reservation, is a helpful step in a successful conversion.

The study looked at the Morongo Band of Mission Indians in California, one of three tribes to have contracted with BIA to run all land title records offices, and found it to be doing LTRO functions “in a more timely fashion than was accomplished previously by the local BIA agency.”

In addition, “the tribe has since processed a significant amount of mortgages and residential leases (before the transition, hardly any were completed).”

Morongo is 37 miles from the nearest BIA agency, which complicated things for them. The other two tribes that have transitioned to a tribal LTRO, the Confederated Salish and Kootenai Tribes in Montana and the Confederated Tribes of the Colville Indian Reservation in Washington, each has a BIA agency on their reservation.

“Morongo Realty can now complete a gift deed in approximately 4 to 6 months, rather than the 2 to 3 year wait experienced prior to the transition.”

The tribe received $40,000 from the BIA for the transition, but wound up spending $35,000 of its own money just to copy BIA records.

The Saginaw Chippewa Tribe of Michigan “first decided to intervene in BIA land title processing after trying and failing to utilize the HUD 184 Loan Guarantee Loan for members.” But a “stoppage” of TSRs connected to the Cobell trust lawsuit doomed that effort.

In 2000, according to the study, the tribe established and funded a tribal LTRO. The office began working with a local lender, a title insurer, and secondary mortgage market Fannie Mae to allow mortgages to be made to its members.

Now, four mortgage lenders make loans on the reservation, and some 10 percent of tribal members have received a mortgage, for total financings of $19 million.

“Under the BIA LTRO, hardly any mortgages were completed at all,” the study noted.

In an endorsement of the way they do this business, their local BIA agency has decided to rely on the Saginaw Chippewa LTRO for records rather than the regional BIA office, “since the tribe’s process has proved faster and more accurate.”