[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                       IMPROVING LAND TITLE GRANT
                    PROCEDURES FOR NATIVE AMERICANS

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                                AND THE

                         COMMITTEE ON RESOURCES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 19, 2005

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-46


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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana          PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio                  MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York              NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio                  DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair   JULIA CARSON, Indiana
RON PAUL, Texas                      BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio                GREGORY W. MEEKS, New York
JIM RYUN, Kansas                     BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio           DENNIS MOORE, Kansas
DONALD A. MANZULLO, Illinois         MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North          HAROLD E. FORD, Jr., Tennessee
    Carolina                         RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois               JOSEPH CROWLEY, New York
CHRISTOPHER SHAYS, Connecticut       WM. LACY CLAY, Missouri
VITO FOSSELLA, New York              STEVE ISRAEL, New York
GARY G. MILLER, California           CAROLYN McCARTHY, New York
PATRICK J. TIBERI, Ohio              JOE BACA, California
MARK R. KENNEDY, Minnesota           JIM MATHESON, Utah
TOM FEENEY, Florida                  STEPHEN F. LYNCH, Massachusetts
JEB HENSARLING, Texas                BRAD MILLER, North Carolina
SCOTT GARRETT, New Jersey            DAVID SCOTT, Georgia
GINNY BROWN-WAITE, Florida           ARTUR DAVIS, Alabama
J. GRESHAM BARRETT, South Carolina   AL GREEN, Texas
KATHERINE HARRIS, Florida            EMANUEL CLEAVER, Missouri
RICK RENZI, Arizona                  MELISSA L. BEAN, Illinois
JIM GERLACH, Pennsylvania            DEBBIE WASSERMAN SCHULTZ, Florida
STEVAN PEARCE, New Mexico            GWEN MOORE, Wisconsin,
RANDY NEUGEBAUER, Texas               
TOM PRICE, Georgia                   BERNARD SANDERS, Vermont
MICHAEL G. FITZPATRICK, 
    Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina

                 Robert U. Foster, III, Staff Director
                      HOUSE COMMITTEE ON RESOURCES

                 RICHARD W. POMBO, California, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
JIM SAXTON, New Jersey               DALE E. KILDEE, Michigan
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
JOHN J. DUNCAN, Jr., Tennessee           Samoa
WAYNE T. GILCHREST, Maryland         NEIL ABERCROMBIE, Hawaii
KEN CALVERT, California              SOLOMON P. ORTIZ, Texas
BARBARA CUBIN, Wyoming               FRANK PALLONE, Jr., New Jersey
GEORGE P. RADANOVICH, California     DONNA M. CHRISTENSEN, Virgin 
WALTER B. JONES, Jr., North              Islands
    Carolina                         RON KIND, Wisconsin
CHRIS CANNON, Utah                   GRACE F. NAPOLITANO, California
JOHN E. PETERSON, Pennsylvania       TOM UDALL, New Mexico
JIM GIBBONS, Nevada                  RAUL M. GRIJALVA, Arizona
GREG WALDEN, Oregon                  MADELEINE Z. BORDALLO, Guam
THOMAS G. TANCREDO, Colorado         JIM COSTA, California
J.D. HAYWORTH, Arizona               CHARLIE MELANCON, Louisiana
JEFF FLAKE, Arizona                  DAN BOREN, Oklahoma
RICK RENZI, Arizona                  GEORGE MILLER, California
STEVAN PEARCE, New Mexico            EDWARD J. MARKEY, Massachusetts
HENRY BROWN, Jr., South Carolina     PETER A. DEFAZIO, Oregon
THELMA DRAKE, Virginia               JAY INSLEE, Washington
LUIS G. FORTUNO, Puerto Rico         MARK UDALL, Colorado
CATHY MCMORRIS, Washington           DENNIS CARDOZA, California
BOBBY JINDAL, Louisiana              STEPHANIE HERSETH, South Dakota
LOUIE GOHMERT, Texas
MARILYN N. MUSGRAVE, Colorado
VACANCY

                     Steven J. Ding, Chief of Staff


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 19, 2005................................................     1
Appendix:
    July 19, 2005................................................    35

                               WITNESSES
                         Tuesday, July 19, 2005

Boyd, Rodger J., Deputy Assistant Secretary, Public and Indian 
  Housing, Office of Native American Programs, Department of 
  Housing and Urban Development..................................    10
Wells, Arch, Acting Director, Office Of Trust Services, Bureau Of 
  Indian Affairs, Department Of The Interior.....................    12

                                APPENDIX

Prepared statements:
    Ney, Hon. Robert W...........................................    36
    Baca, Hon. Joe...............................................    38
    Kildee, Hon. Dale E..........................................    40
    Boyd, Rodger J...............................................    42
    Wells, Arch..................................................    45

              Additional Material Submitted for the Record

Boyd, Rodger J.:
    HUD Section 184 Month End Report, July 31, 2005..............    48
Well, Arch:
    Written response to questions from Hon. Barney Frank.........    49
    Written response to questions from Hon. Stevan Pearce........    49
    Written response to questions from Hon. Joe Baca.............    50


                       IMPROVING LAND TITLE GRANT
                    PROCEDURES FOR NATIVE AMERICANS

                              ----------                              


                         Tuesday, July 19, 2005

              U.S. House of Representatives
                   Committee on Financial Services,
                                     joint with the
                                    Committee on Resources,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 11:03 a.m., in Room 
2128, Rayburn House Office Building, Hon. Robert Ney presiding.
    Present from Committee on Financial Services: Lucas, Ney, 
Kennedy, Feeney, Renzi, Pearce, Neugebauer, Frank, Lee, Baca, 
Matheson, Scott, and Wasserman Schultz.
    Present from Committee on Resources: Fortuno, McMorris, 
Kildee, Grijalva, Cardoza, Costa, and Herseth.
    Mr. Ney. [Presiding.] The hearing will come to order.
    This is a joint hearing on improving land title grant 
procedures for Native Americans.
    One of the most important cornerstones to a strong 
community is homeownership. It creates stability and serves as 
a strong economic staple in our overall U.S. economy.
    While the national homeownership rate has steadily risen to 
an all-time high of almost 70 percent, there are sectors of the 
population for whom homeownership remains unattainable. For 
Native Americans, just to mention one group, the focus of 
today's joint hearing, their homeownership rate is well below 
50 percent.
    Clearly more can and should be done to help all families 
realize the dream of owning a home. Presently, the Native 
American population is estimated at 2.5 million. While the 
national poverty rate is 12 percent, the rate among Native 
Americans is more than twice as high. Forty-five percent of all 
Native American households are located on tribal lands, and 
housing is one of the most pressing issues for Native Americans 
living on tribal lands.
    Our ranking member, Maxine Waters, and I and Congressman 
Matheson, along with Congressman Frank's staff, went out and 
had a hearing. It was unbelievable what we viewed out there 
when it came to housing and the conditions.
    Over 32.5 percent of the homes located on tribal lands are 
overcrowded and 7.5 percent of the Native American homes lack 
safe water and sewage systems. Less than 50 percent of the 
homes on reservations are connected to public sewer systems, 
and 16.5 percent of the homes on Native lands are completely 
without indoor plumbing. About 40 percent of the tribal homes 
are considered substandard when compared to a national average 
of 6 percent.
    Again last year, the Housing Subcommittee held our field 
hearing on tribal land in Tuba City, Arizona, where again we 
were able to witness first-hand the chronic housing 
affordability and availability problems plaguing Native 
Americans.
    I want to thank Congressman Renzi for asking us to do that. 
It was the first time that we could research that a House 
subcommittee ever held a hearing on tribal lands. That was at 
Congressman Renzi's request, and I appreciate both the majority 
and minority participating in that hearing.
    Approximately half of Native American households in tribal 
areas pay over 30 percent of their income for housing expenses, 
compared to 23 percent of all U.S. residents who pay more than 
30 percent of their income for their housing expenses.
    The Arizona field hearing gave us the opportunity to learn 
that some of the housing problems in Indian Country can be 
attributed to the unique relationships Native American tribes 
have with the U.S. Government. Native Americans residing on 
reservations are U.S. citizens, but their tribes are recognized 
as domestic sovereign nations with treaty relationships with 
the U.S. Government.
    The fact that the Bureau of Indian Affairs holds much in 
trust means the tribes are allowed only limited sovereignty 
over their lands. The special relationship limits the types of 
economic activities for which Indian lands may be used. We also 
found out out there that sometimes it takes up to 1 year or 1 
1/2 or 2 years to get the title cleared. Of course, if you are 
trying to get a loan, that does not really work out, that time 
period. In order for Native Americans to build a home on trust 
land, they have to obtain a title status report, TSR, from the 
BIA.
    Today's hearing will focus on what processes the BIA has in 
place to help produce a TSR for Native American lands in a 
timely fashion, as well as how BIA affects HUD's ability to 
help Native Americans achieve homeownership. It is important 
that an efficient process is adhered to by BIA, as HUD programs 
such as the Indian Community Development Block Grant Program 
and the Indian Housing Block Grant Program are affected by 
BIA's ability to issue this TSR.
    Changing land status issues, diversity of tribal laws and 
governments, lack of mortgage information and credit issues all 
contribute to the challenges of mortgage lending in Indian 
nations. The governmental programs delivered to Indian Country 
should be highly flexible and adapted to the very unique and 
specific circumstances in each tribal setting. Native Americans 
must be able to take full advantage of partnering and 
leveraging across institutions at levels throughout the United 
States Government.
    If we begin to succeed at these initiatives, then 
opportunities I think will move into these rural areas.
    Again, the minority rate period in the United States is 
unacceptable in homeownership, and we have to raise that, and 
again today's issue of Native Americans.
    So I want to thank again the joint hearing, Chairman Pombo, 
Mr. Frank, Mr. Kildee, Congresswoman Waters, and members from 
both sides of the aisle on both committees for this hearing.
    We will move to an opening statement from Mr. Kildee of 
Michigan.
    [The prepared statement of Hon. Robert W. Ney can be found 
on page 36 in the appendix.]
    Mr. Kildee. Thank you very much.
    I want to thank Chairman Oxley and Chairman Pombo, along 
with Congressman Ney and Congressman Frank, for scheduling this 
hearing today.
    For several years I have heard that the primary barrier to 
mortgage lending in Indian Country is that the BIA cannot 
process titles in a timely manner. Tribes assert that the 
process of attaining a certified TSR can take 6 months to 
several years. This has had a devastating effect on HUD's 
Section 184 program that requires a land title through the BIA.
    A substantial portion of HUD's Section 184 program funding 
for fiscal year 2005 was rescinded because the funds were not 
fully used. As a matter of fact, under 184, $33 million was 
rescinded, and under another title, $21 million was rescinded.
    In 2000, Congress authorized the Indian Lands Title Report 
Commission to make recommendations to the BIA to address the 
title processing issue. The commission has yet to be created 
because the Administration has yet to make its nominations. We 
cannot wait any longer to address this title issue. We must 
streamline the BIA's title system.
    Among other things, this will require a review of the 
following: BIA's trust management reform efforts relating to 
land records, how land fractionation hinders the title process, 
missing historical land ownership and title data, and current 
procedures of the eight land title and record offices.
    We must also explore alternative methods of expediting 
Indian land titles through, for example, Indian Self-
Determination Act contracts or compacts. I am committed to 
working with the committees of jurisdiction, the Administration 
and the tribes, the sovereign tribes to develop a solution to 
this problem.
    I look forward to today's hearing.
    I thank you, Mr. Chairman.
    [The prepared statement of Hon. Dale E. Kildee can be found 
on page 40 in the appendix.]
    Mr. Ney. I want to thank the gentleman.
    Next, the gentleman from Massachusetts.
    Mr. Frank. Thank you, Mr. Chairman. I appreciate your 
strong interest, not just in this particular issue, but in 
housing issues in general.
    I want to pay tribute to the leadership that my colleague, 
the gentleman from Michigan, has provided on the whole question 
of Indian matters.
    The housing situation is one that we ought to be able to 
improve significantly. I appreciate the acknowledgement in Mr. 
Wells's testimony that there have been some problems. 
Obviously, we cannot solve all the problems. I noticed, too, in 
Mr. Boyd's, he said that these problems are not responsible for 
all of the issues we face. Agreed, but we can clear this one 
up.
    It is simply unacceptable for there to be any significant 
delay in issuing these TSRs. We should, I think, agree that 
within a couple of months they are going to be as quickly done 
as you can process the paper, unless you have one of those 
unusual situations where there is a problem. I would think, 
given that we are talking about a fixed number of areas of the 
tribal trust lands that there ought to be a pattern that could 
be followed very quickly.
    So I am going to be asking if anything needs to be done 
legislatively to speed this up, let us know. If not, I would 
then hope that we would know very soon that these things are 
going to be done in weeks at most, and even weeks seems too 
long. Everybody is in favor of this. The notion that processing 
paper should interfere is a problem, particularly when we are 
talking about the market for the interest rate float, et 
cetera. But I am told, as Mr. Kildee mentioned, that we have 
delays that go into months and maybe years. There is just no 
reason to do that. So if you need more people or if you need 
more legislative authority, you have to tell us.
    The processing of these documents ought to be just a 
routine thing. That is not going to solve all the problems of 
the world, but that is a very big one we can go forward in 
solving. So I am delighted that we have had the hearing.
    As we have often found, I think, the very fact that the 
chairmen of both committees agreed to have the hearing should 
be helpful. All the attention is focused. But I would hope that 
out of this meeting will come an agreement that we are going to 
move these things very, very quickly, and if there are any 
obstacles to moving them within days, then I would like to know 
what they are so we can go forward with it.
    There is simply no reason why people who live in the tribal 
trust lands ought to be in any way disadvantaged in terms of 
housing. That is what I hope will come out of this hearing.
    Mr. Ney. I thank the gentleman from Massachusetts for his 
concern and comments and also reiterate thanks to Chairman 
Oxley and Chairman Pombo for the hearing.
    The gentleman from New Mexico?
    Mr. Pearce. Thank you, Mr. Chairman. I appreciate your 
having these hearings.
    In my district, we find continuously that economic 
development is hindered because of the complex and often 
untanglable mass of bureaucracy around the trust lands.
    In the past we have begun discussions with Native Americans 
in New Mexico about simply doing away with the trust status. I 
am not sure why we need it anymore. I think if we begin to 
unevolve that particular part of the problem, that Native 
Americans might be able to get somewhere on their own for the 
first time.
    So we will be listening carefully to the comments. Thank 
you.
    Mr. Ney. Thank you.
    The gentlelady from South Dakota?
    Ms. Herseth. Thank you, Mr. Chairman, and thank you for 
having this hearing today. I appreciate the statements that 
have already been submitted, and I look forward to posing some 
questions to our witnesses today.
    A lot of this has already been said by my colleagues, but I 
would just like to point out that in Indian Country and in 
South Dakota, I represent nine sovereign tribes. The ongoing 
perennial issues with regard to trust management more broadly, 
as we all know, pose some problems. But as tribal leaders 
across South Dakota and across the country are working towards 
solid economic development plans for their tribes, for their 
members, homeownership, adequate housing for that matter, is a 
real and important part of their economic development plans.
    To have the type of burden, the undue burden that has been 
placed on many individual Indians seeking homeownership 
opportunities because of the delays in clearing title is 
something that would try anyone's patience. People can only be 
patient for so long, not just the potential homebuyer, but the 
lender certainly.
    So I look forward to a discussion today that hopefully, as 
Ranking Member Frank indicated, will help identify some ways, 
whether it is legislatively if need be, to advance this process 
in a way that is good for the nine tribes that I represent, as 
well as other tribes across the country.
    At the same time and in different areas, we address the 
broader issues of trust management, fractionation of lands, and 
the difficulty that I know that poses, but, hopefully, we can 
address this issue in a more timely way because it is hindering 
other economic development that is good for communities in 
Indian Country and certainly good for individual Native 
Americans seeking to become first-time homebuyers.
    Thank you, Mr. Chairman. I yield back.
    Mr. Ney. I want to thank the gentlelady.
    The gentleman from Arizona is here.
    Prior to your arrival, we publicly recognized and thanked 
you for your interest in this when we went with the gentlelady 
from California, Ms. Waters and her staff, and also for the 
great cooperation which I think has led to this hearing on both 
sides of the aisle.
    The gentleman from Arizona?
    Mr. Renzi. Mr. Chairman, thank you so very much. I 
appreciate your time today and your commitment.
    I represent over 60,000 square miles in the State of 
Arizona, 52 percent of the landmass of the State, which 
includes the Navajo, the Hopi, the Zuni, the San Juan Paiute, 
the Yavapai and Tonto Apache, the Yavapai Prescott Tribes, San 
Carlos, White Mountain Apaches.
    Last year, Chairman Ney and Ranking Member Frank were kind 
enough to help me hold a hearing in Tuba City up in the Navajo 
Nation. Many of you guys were aware of that and some of the 
results that came out of it. I do appreciate those who helped 
us pull together those entities and have a successful hearing 
up in the Navajo Nation.
    We saw devastating situations. We saw poverty rarely seen 
across America, where in the Navajo Nation over 27 percent of 
the people are in poverty conditions, which is twice the 
national average. Almost 33 percent of the reservation's homes 
are overcrowded, more than six times the national average. And 
16 percent of the homes on the Navajo Nation lack indoor 
plumbing.
    So despite the statistics, we came away with hope, with the 
idea of working together and trying to make a difference. Last 
year, we passed legislation where we were able to guarantee the 
loan program up to 95 percent under the Title VI. Those changes 
have helped some of the lenders who do participate in Indian 
Country loans to be more proactive.
    At the same time, if you look traditionally at how Native 
Americans come to homeownership, it typically in the past was 
that you would inherit the land and then you would go out and 
build your own home on the land. It is not traditionally as you 
see in America now where it is so fluid that you actually go on 
the Internet, get a mortgage, go out and buy a home somewhere, 
and have 20 people beating down your door to give you a good 
loan. That does not happen up on the Navajo Nation. It does not 
happen in Indian Country.
    And yet we have guaranteed programs where there is money 
each year that is unused that we are giving back. We are giving 
back money that could be used by our Native Americans, and we 
are giving it back to the Government. We are giving it back 
because there are not enough counselors and not enough people 
up there on the Native American lands, on their soil, teaching 
them how to engage in our traditional ways of homeownership, in 
educating them, in moving them.
    I was on a recent visit to Camp Verde and saw a Yavapai 
Apache living, a family living in an old trailer behind the 
brand-new house because the BIA recordation process had not 
been completed. Native American families who are approved for 
mortgages are ready to move into their new homes, but they have 
to wait because mortgage companies will not transfer their 
ownership to the new homes until BIA then gives them final 
approval, secondary final approval. So you have people sitting 
in trailers when their home is complete waiting for final 
approval.
    Now, Native Americans typically have about half the income 
as regular, average Americans, which is barely $20,000 up on 
the Navajo Nation. In Tuba City last year we heard testimony 
where the barriers were brought up with private mortgage 
lending in Indian Country. A lot of it has to do with the 
timely recordation of mortgage documents and the timely 
retrieval of title status reports, as well as the lack of 
public access to land ownership documents. Ninety percent of 
the land within the Navajo Nation is held in trust by the BIA.
    Mr. Boyd and Mr. Wells, I know you are tired of hearing 
from me, but put yourself in the shoes of a young Native 
American on the Navajo Nation. You have a job that actually 
pays above $20,000. You have a wife and kids. You want to move 
out of the cluster development where the methamphetamine is the 
highest in the nation, and you want to get back to rural 
America and back to your traditional roots. It takes an average 
of 2 years for the title search to be done.
    When a private organization wants to find out who owns 
vacant lots on trust land, the BIA will not release ownership 
information. The BIA has stated that the groups must get 
written permission from the owners before the BIA will tell 
them who the owner is.
    This is BIA's version of the famous "Catch-22." It might 
even seem comical if it weren't for the fact that absurd 
policies like this contribute to the terrible conditions many 
Native families find themselves in.
    This kind of administrative bureaucracy has a tendency to 
repress the spirit of all the Native Americans, and I represent 
more of them than anybody else in Congress, to reach 
homeownership. And homeownership in Arizona means better 
marriages, better math scores, higher attainment in high school 
in graduation degrees, lower crime, all the fruits of ownership 
we see particularly come true when you release that 
entrepreneurial and that independent spirit in Arizona so they 
can have homeownership.
    Mr. Chairman, I realize I am going on. I very much 
appreciate you and the ranking member allowing us to have this 
hearing today. I am looking forward to drilling into some of 
these questions with the hope that this will begin to crack the 
nut on some of the administrative repressive policies that are 
in place. I want to work together to find solutions here.
    Thank you so very much for coming over.
    Mr. Ney. I thank the gentleman for his comments and 
interest.
    The gentlelady from California?
    Ms. Lee. Thank you, Mr. Chairman. Let me also thank you and 
our ranking member for holding this hearing today.
    I just say quite frankly that I am appalled and shocked as 
I learn more about and read the huge statistics, first of all, 
with regard to the need for decent, affordable housing for our 
Native populations.
    Secondly, the fact that we have authorized programs like 
Section 184 which guarantee, of course, this American dream of 
homeownership, yet it takes 6 months, a year, 2 years to 
process title for this. I mean, it is hard to believe that we 
are doing this. For the life of me, this is a bureaucracy that 
I think needs to be shattered, and hopefully this hearing can 
begin to do that.
    We look and see the overcrowding issues in Native American 
families, sometimes 18, 20, 25 individuals living under one 
roof with as few as three bedrooms. So I think not only do we 
need to get going on this and try to figure out how to expedite 
this process, but I think Congress needs to appropriate and 
authorize more funding when you look at the huge need, where 
200,000 units were needed immediately. This was in 2003. I am 
shocked to learn, well really I guess I should not be shocked 
to learn, that 90,000 Native families are homeless or under-
housed.
    I guess why I am so surprised and shocked is that we have 
this effort that is on the books. HUD should be able to process 
title more quickly so that we can begin to address these huge 
and desperate housing needs of our Native American families.
    So thank you, Mr. Chairman, for this hearing and hopefully 
we will be able to begin to unravel the difficulties that our 
Native American people are faced with and begin to make sure 
that they, too, are afforded the opportunity of affordable, 
decent, and safe housing for their families.
    Thank you.
    Mr. Ney. I thank the gentlelady.
    The gentleman from Florida, Mr. Feeney, if you have an 
opening statement.
    Mr. Feeney. I thank the chairman.
    I was motivated by my colleague from Arizona's passionate 
discussion. I am here primarily because in my background; I am 
a real estate and title attorney, and if there is any way we 
can help cut through the roadmap. The truth of the matter is 
that, given the desire and the motivation and a computer 
system, in most places in the country you can pull up a title 
report in about 35 minutes. You can have it off to the mortgage 
company with the push of a button on a fax machine.
    So there is no reason for extended delays. And if they are 
happening, I am going to lend my expertise to cut them down.
    I appreciate Mr. Renzi's comments.
    Mr. Ney. Next, I want to recognize my aunt's and uncle's 
Congressman, the gentleman from California, Mr. Baca.
    Mr. Baca. Thank you very much, ranking member and minority 
members.
    It is a pleasure to be here today to discuss this very 
important issue regarding Native American housing. We must 
figure out how to cut the red tape, and to promote tribal 
sovereignty at the same time as Native American land ownership, 
which is very important. I state, Native American land 
ownership.
    I have always been a strong supporter of Native American 
sovereignty. Through economic development and other 
initiatives, Native Americans have been able to build schools, 
roads, clinics, and other necessities. They have also been able 
to make deals and contributions to surrounding communities.
    All of us have benefited by their contributions in our 
areas. They have built strong economic bases for a lot of us in 
our communities in maintaining jobs in our area without 
outsourcing. I continue to salute Native Americans for their 
achievement and sacrifices for this country. Many of them have 
served us gallantly in many of the wars and continue to do so. 
By currying legislation and encouraging teaching about Native 
Americans, they promote their history and establishing a 
holiday to recognize respected Native Americans and their 
culture. This is one of the things that I have done.
    But we must also do more. Native Americans have a poverty 
level that is more than double the Nation's rate, and I state, 
Native Americans have a poverty level that is more than double 
the national rate. Much of Native American housing is 
overcrowded and substandard, and I state that. It is 
overcrowded and substandard. Native American housing is 
expensive. Approximately half of Native American households in 
tribal areas pay over 30 percent of their income for housing, 
compared to 23 percent of all other residents.
    Native Americans lack sovereignty. Much of Native American 
land is held by trust, and I state, much of Native American 
land is held by trust by the Bureau of Indian Affairs. Tribes 
do not have the authority, I state, tribes do not have the 
authority to sell, lease, or mortgage trust land without 
Federal approval. Again, tribes do not have the authority to 
sell, lease, or mortgage trust land without Federal approval. 
We must address this problem.
    Much land has been taken away from Native Americans. 
Approximately 90 million acres of trust lands have been removed 
from Native American lands since the late 1800s. We must 
address this injustice. Native Americans face a lot of 
bureaucracy in trying to build homes, and I state, bureaucracy 
in trying to build homes. The process is very lengthy and 
requires a great deal of work, time, and money. They should not 
be affected like anybody else who wants to build a home. We see 
these homes going up. We see no bureaucracy. We see them 
happening. But when it comes to Native Americans, it seems like 
it requires a lot more time, work, and money. This needs to be 
changed.
    It is my understanding that in California there alone is a 
backlog of over 4,000 title status report requests. In fact, 
one of the tribes that I am aware of this has had Title I 
statute report requests processed in the past 2 years, and that 
is a long time, with 50 requests pending, many of which are 
from the year 2001 or even 2000. Meanwhile in the private 
sector, title status reports can often be completed in 24 
hours. That is double standards. Why is it that we can do it in 
the private sector, yet we cannot do it in tribal land?
    This is not acceptable. We can do better. I look forward to 
being here today so that we can examine and address the 
problems.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Hon. Joe Baca can be found on 
page 38 in the appendix.]
    Mr. Ney. Thank you.
    The gentleman from Arizona, Mr. Grijalva?
    Mr. Grijalva. Thank you very much, Mr. Chairman and ranking 
member. I appreciate the opportunity and appreciate this 
hearing very much.
    Let me at the beginning associate myself with the comments 
that Ms. Lee and Mr. Baca have just made. The issue of 
homeownership is a national priority for this Administration 
and this Congress. The consequence of the hearing today I hope 
is to examine and change the process by which Native American 
people can meet that goal of homeownership in this country, 
which is a laudable goal and a necessary goal.
    So in associating myself with their comments, let me stress 
that the issue is also sovereignty, but the issue is to extend 
the dream of homeownership to every American, and this 
certainly includes our first Americans.
    Thank you.
    Mr. Ney. Thank you.
    The gentleman from Utah, Mr. Matheson, who was at our 
hearing. We appreciated that.
    Mr. Matheson. I would just like to say, first of all, Mr. 
Chairman, thank you for initiating that hearing. I thought it 
was real helpful. I want to acknowledge also my colleague, Mr. 
Renzi. for his leadership on this. I have really enjoyed 
working on Native American housing issues with him. I look 
forward to this hearing.
    Thanks so much.
    Mr. Ney. With that, we will go on to the two witnesses.
    First is Mr. Rodger Boyd. Mr. Boyd is the Deputy Assistant 
Secretary for the Office of Native American Programs, known as 
ONAP, the Department of Housing and Urban Development. Prior to 
his position, he was Program Manager in the Community 
Development Financial Institutions Fund for the Department of 
the Treasury. As a program manager, he designed and directed 
the fund's congressional-mandated Native American Lending 
Study.
    Throughout his career, Mr. Boyd has worked with Indian 
tribal governments, Federal agencies, and the private sector to 
explore and develop economic development opportunities for the 
Native American communities with the goal of establishing self-
sustaining economies.
    Mr. Arch Wells was appointed acting Bureau Deputy Director, 
Office of Trust Services for the BIA, in 2004. As the Bureau 
Deputy Director, Mr. Wells is responsible for all activities 
associated with management and protection of trust and 
restricted lands. This protection involves the oversight of 
national programs including land title and records offices, 
minerals and energy management, and forestry and fire 
management.
    Previously, Mr. Wells served as the acting Director for the 
BIA's southwest region in Albuquerque, New Mexico, beginning in 
2002 to 2003. Prior to that position, he served as Trust 
Resources Protection Manager for the BIA's southwest region 
from 2000 to 2002.
    I would also, before we proceed, note that without 
objection all members's opening statements will be made part of 
the record for members who were not here at this particular 
time.
    We will begin with Mr. Boyd. Thank you.

STATEMENT OF RODGER J. BOYD, DEPUTY ASSISTANT SECRETARY, PUBLIC 
    AND INDIAN HOUSING, OFFICE OF NATIVE AMERICAN PROGRAMS, 
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Boyd. Thank you, Mr. Chairman and members of the 
Financial Services and Resources Committees, for inviting me to 
comment today on the BIA's title status report process and its 
impact on homeownership and the implementation of HUD's Indian 
Housing Block Grant and Indian Community Development Block 
Grant Programs.
    As mentioned, I am the Deputy Assistant Secretary for the 
Office of Native American Programs in the Office of Public and 
Indian Housing. I am responsible for the management, operation, 
and oversight of HUD's Native American programs.
    These programs are available to over 562 federally 
recognized tribes throughout the country. We serve these tribes 
directly or through their tribally designated housing entities, 
or TDHEs, by providing grants and loan guarantees designed to 
support affordable housing and community and economic 
development activities.
    For more than 5 years, the Office of Public and Indian 
Housing has been in discussions with various departments to 
formulate a memorandum of understanding to develop an expedited 
process for land title searches for homeownership in Indian 
Country and to better coordinate our respective programs.
    Agency representatives signed an MOU in September 2004. 
Since the MOU signing, an interagency task force has 
participated in a series of meetings that have generated 
meaningful discussions and a greater understanding of the 
impact that the title status report or TSR process has on 
Federal loan guarantee initiatives in Indian Country.
    The Office of Native American Programs can see where 
progress has been made to improve the TSR process in some 
regions. However, there continue to be inconsistencies in the 
time it takes to process the TSR request from region to region. 
The BIA has informed HUD and USDA that the newly developed 
residential lease regulations will be released later this 
summer.
    I am optimistic that the new leasing regulations and the 
resulting guidelines will provide a uniform process that 
supports mortgage financing. The creation of a centralized 
process will enhance the leasehold lending process by 
eliminating the different policy interpretations that occur on 
a regional basis.
    HUD has received feedback from lenders who are concerned 
about the length of time it takes to process leasehold 
transactions. The discussion has focused on the potential costs 
to the borrower, who is subject to interest rate fluctuations 
due to market conditions while waiting out the process.
    The homeownership rate among Native Americans lags behind 
that of the rest of the country. Although there are a number of 
contributing factors, the lack of a resale market on 
reservations is a major consideration. Streamlining the TSR 
process and increasing the level of homeownership and credit 
counseling will support the evolution of a more vibrant housing 
market in Indian Country.
    In addition to our work looking at options with other 
agencies on the memorandum of understanding, HUD has worked 
with a Northeast tribe and the Department of the Interior's 
solicitor's office in Washington to create mortgage lending 
based on tribal assignment law. The solicitor's office has 
issued an opinion that the assignment law would not require 
secretarial approval.
    A national title insurance company is prepared to issue 
title opinions on the assignments, creating the necessary 
mechanism to perfect a lien on the assignment. The tribe must 
develop an approved process to record the assignments that meet 
the title company's requirements. ONAP is cautiously optimistic 
that the assignment law option can assist tribes that have the 
capacity and expertise to implement such a program.
    The TSR process has minimal impact on the Indian Housing 
Block Grant and the Indian Community Development Block Grant 
Programs. The Native American Housing Assistance and Self-
Determination Act of 1996 recognized and simplified the 
department's system of housing assistance to Native Americans 
by eliminating several separate HUD programs of assistance and 
replacing them with a single block grant made directly to the 
tribes or tribally designated housing entities. This Act 
recognizes the right of tribal self-governance and the unique 
relationship between the Federal Government and the respective 
Governments of Indian tribes.
    NAHASDA, as it is called, significantly changed the way HUD 
provides housing funds to Indian communities. The Indian 
Housing Block Grant Program offers maximum flexibility to 
tribes or their TDHEs to design, implement, and administer 
their own unique housing programs. The department is no longer 
involved in the day-to-day operations of the housing program 
and our involvement with tribes, and the Bureau regulating 
lease issues for the housing developments is limited.
    Also, development projects using Indian Housing Block Grant 
funding are typically larger in scale and require more 
planning, which allows more time for interaction with the BIA. 
Although there have been some delays, the impact is not as 
great as seen in the Section 184 program.
    Tribal governments and a limited number of tribal 
organizations are the only eligible participants in the Indian 
Community Development Block Grant Program, and new housing 
construction is limited under this program. In most cases, the 
development of community facilities, including health 
facilities, would be on tribal land and there would not be a 
need for tribes to issue a lease to themselves.
    Decisions to acquire fee land, former reservation lands, 
and other parcels of land to be put into trust are tribal 
decisions. The status of such lands would not ordinarily affect 
the viability of an economic development project so long as the 
tribe has control over the land sufficient to accomplish its 
proposed goals and objectives as stated in its application.
    In summary, the TSR process has room for improvement, but 
it is not solely responsible for the current homeownership rate 
in Indian Country. HUD has seen an increase in cooperation with 
the BIA and looks forward to working with the Bureau to develop 
solutions that streamline the TSR process. HUD is committed to 
supporting homeownership education programs and is working with 
the BIA and USDA to develop some successful models that 
demonstrate the benefits of a collaborative interagency 
initiative.
    Thank you for providing the department the opportunity to 
testify about this issue.
    [The prepared statement of Rodger J. Boyd can be found on 
page 42 in the appendix.]
    Mr. Ney. Thank you.
    Mr. Wells?

   STATEMENT OF ARCH WELLS, ACTING DIRECTOR, OFFICE OF TRUST 
 SERVICES, BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR

    Mr. Wells. Thank you.
    In saying that I am heartened to hear the field experience 
that sits in this room, it is where I come from.
    Mr. Ney. That is okay. We are still not used to it 
ourselves, so you are in good company.
    [Laughter.]
    Mr. Wells. Good.
    So good morning Chairman Oxley, Chairman Pombo, members of 
the committee. My name is Arch Wells. I am the acting Director 
for Trust Services for the Bureau of Indian Affairs. I come out 
of the Southwest. I have at least 28 1/2 years of experience in 
Indian Country.
    I am heartened to hear the interest in getting this 
resolved. I, too, have witnessed a lot of what you have 
witnessed. The gentlemen from Arizona and New Mexico, you come 
from my stomping grounds. You have obviously seen what I have 
seen, so I am glad to be here.
    I am here today to provide the Department's testimony on 
the BIA's role in assisting individual Indians in the pursuit 
of homeownership. I will begin by providing some background 
information on the current process and procedures for obtaining 
a title status report, known as TSRs, and the BIA, and comment 
on this process.
    The BIA has land title and records offices, or LTRO, 
located within eight of its regions, those being Anchorage, 
Alaska; Muskogee, Oklahoma; Aberdeen, South Dakota; Portland, 
Oregon; Sacramento, California; Billings, Montana; Anadarko, 
Oklahoma; and Albuquerque, New Mexico, where I hail from. Each 
LTRO is responsible for recording all title and encumbrance 
documents for Indian lands within their respective regions and 
they issue certified TSRs to provide a record of ownership.
    A TSR is a compilation of the information in the LTRO 
ownership. It is a compilation of all of that data. It is a 
legal description of recorded liens and encumbrances on a 
designated parcel of land. The production of TSRs for mortgages 
is our LTRO offices' top priority. We are striving to get those 
things out the door as fast as possible. We strongly support 
programs that improve or develop housing on Indian lands for 
Indian people, as does HUD, as stated by Mr. Boyd.
    The current procedure requires that all requests for a TSR 
for mortgage purposes first go through the agency 
superintendents at the relevant BIA office or through the 
regional director on behalf of the tribal member. The certified 
title is required by the lending institution as part of the 
lending institutions effort to verify that the loan applicant 
has acquired a leasehold interest on tribal land or that the 
loan applicant has total ownership on trust land and that the 
title is clean and clear of any liens against the property so 
the loan application process can move forward unimpeded.
    Once the mortgage has been approved using the BIA-generated 
TSR, the document is sent to the LTRO for recording purposes 
with a request for a second certified TSR, as Mr. Renzi noted. 
HUD requires the subsequent TSR showing the mortgage as an 
encumbrance to the title before the loan is guaranteed. That is 
a requirement. Some lending institutions also require this 
additional TSR before releasing the funds.
    There are very few differences in the production of TSRs 
from location to location. When there are, often those 
differences are dictated by the particular lending institution 
or Federal agency providing the loan. Requirements and standard 
operating procedures vary from Federal agency to Federal 
agency. The BIA LTROs strive to accommodate these differences 
as we support the mission to provide home loans to Indian 
people. Private lending institutions also have varying 
requirements and procedures. Consequently, our process for 
providing TSRs may vary to accommodate the lender.
    Due to increasing workloads within the LTRO program over 
the years, we found that some offices have provided an 
uncertified title status report showing the mortgage as 
reflected in the LTRO records as an encumbrance to the property 
in lieu of the certified report. There has been some heartburn 
over that. On April 13, 2005, BIA issued a directive requiring 
that all LTROs provide certified title status reports when 
requested by the agency superintendents or regional directors.
    BIA has qualified and dedicated personnel within the LTRO 
program to examine our records and produce TSRs. We are the 
sole source for Indian trust land records. Because Indian trust 
land records are to a degree confidential, lending institutions 
and other Federal lenders are completely dependent upon the BIA 
for all certified TSRs, thus creating a significant workload.
    Since the inception of the Federal loan programs, the 
mortgage requests for TSRs have been a high priority for the 
LTROs. We have made significant changes to our title program, 
as Mr. Boyd noted, over the past 3 years aimed at improving our 
ability to deliver in an accurate and timely manner in all 
aspects of our Indian land title operations, including the 
processing of TSRs. We have additional changes planned in the 
near future which will improve the quality of the data in our 
title system, thus improving our overall product.
    One of the improvements to the BIA title system is the 
recently completed conversion to the Trust Asset and Accounting 
Management System, known as TAAMS for processing titles at all 
LTRO program offices. The system has greatly improved our 
ability to provide title information to tribes and Indian 
people. That, I might add, is getting us closer to the 
computerized system noted by the gentleman on my right.
    The quality of the data has been significantly improving. 
We have been conducting a comprehensive data cleanup, which we 
expect to be completed in 6 to 8 months. Without clean data, we 
are nowhere, I might add that. So there is a huge effort 
onboard right now to get the data cleaned up.
    The BIA currently has an efficient process of providing 
TSRs upon request within a reasonable time frame. In the recent 
memorandum of understanding, noted by Mr. Boyd again, between 
the Departments of Housing and Urban Development, Agriculture, 
and the Interior, the BIA's realty and LTRO programs agreed to 
provide the necessary products and services within 30 days to 
keep the process moving forward to assist Indians in becoming 
homeowners. Lenders can utilize the information in those TSRs 
to assist in assuring that the lands are free of liens and are 
available for mortgaging.
    The BIA's process has remained fairly constant through all 
of these years. However, lenders often do not take the time to 
learn the process or provide sufficient notice that a loan is 
being processed, so we do have a disconnect we need to work on. 
The BIA needs a reasonable lead time to provide a certified 
TSR. Thus, a key part of an efficient process includes early 
notice from the borrower or the lender.
    When this takes place, our LTROs are able to produce TSRs 
in a time period comparable to the private sector. Some of the 
BIA regional offices have started providing training to lenders 
in order to facilitate a timelier processing of TSRs. I intend 
to roll that out to all of the BIA regional offices to make 
sure all 12 regions are working with the lenders in a training 
effort to try to bridge this gap.
    In conclusion, anytime a mortgage is approved, it has the 
potential to improve the quality of life for Indians. As stated 
earlier, requests for title status reports for mortgage 
purposes are and will remain a high priority for the BIA. Over 
the past decade, our legacy title system has served us well in 
spite of its shortcomings. Now with our recent conversion to a 
new real-time title system, it has already shown increased 
efficiency and cost savings.
    As we continue to enhance our title system, streamline our 
business processes, and develop adequate budgets through 
performance measures to address our workloads, we hope to 
eliminate any situation where we have failed to provide timely 
title service to meet the needs of our Indian clients.
    I would also like to add, in a nutshell, lenders must 
recognize that, one, obtaining a TSR should be part of the 
lender's overall effort to verify the condition of title; and 
two, a TSR is a summary of the information from the current 
records of the BIA at the time of the issuance of the TSR, so 
there is no confusion on what a TSR truly provides.
    Thank you.
    [The prepared statement of Arch Wells can be found on page 
45 in the appendix.]
    Mr. Ney. Thank you.
    The question I have, based on the hearing, lenders said 
they were growing weary of how long it takes and that they were 
not able to commit, obviously, to interest rates and things 
like that.
    So my one question is--I hate to use the word "privatize," 
but if we privatized this--we buy a house through standard 
process and it takes 2 days; you pay about $600--if we 
privatized this, would it work, where you have private 
attorneys, would that work or not?
    Mr. Wells. I would like to take a first crack at that, if I 
could.
    I would love to say yes, but I do not think it would 
because they are going to be relying on the same data that we 
are relying on.
    We are just now becoming automated with the TAAMS system. 
It is a huge conversion from pen and paper-type data into an 
automated system, and it involves a monumental cleanup effort.
    The private entity would be faced with the same daunting 
task that we are faced with and have less corporate memory to 
understand it.
    Mr. Ney. Okay. From today forward, how long would it take 
to clean up the data so it is ready? You are in the process of 
automation and corrections.
    Mr. Wells. We are on track right now for an 8-month 
timeframe to get all of that cleaned up at eight LTROs.
    Mr. Ney. So are you telling me that 8 months from now we 
will not ever have to have a hearing because it is going to go 
through in 2 days?
    Mr. Wells. I wish that would be the case. I am not saying 
that, but all the data is going to be cleaned up if we can get 
all the lenders and the other Federal entities in concert, one 
way of doing business, and Mr. Boyd noted we are going through 
a new regulation change associated with the fiduciary trust 
model.
    It is not only the regulation change on TSRs, but it is a 
regulation change on how we do business in all of realty. We 
should be able to streamline the system. That is one of the 
primary reasons we are doing the regulation change.
    Mr. Ney. So having the private sector clean up the data 
would not help. You are convinced that the way you are doing it 
will be the fastest way to clean the data up.
    Mr. Wells. I am convinced that the way we are doing it will 
get the job done, and we are using private contractors. There 
is no way that the present staff can do all of this. The way we 
are doing it with private contractors, trying to provide our 
corporate memory to them to get over the rough spots, is about 
the fastest way we are going to get there.
    Mr. Ney. And the estimates are within 8 months from now and 
the data is up. How long would it take to get the title done?
    Mr. Wells. I am saying with 30 days it should be done.
    Mr. Ney. Thirty days.
    Mr. Wells. Within a 4-week timeframe.
    Mr. Ney. The gentleman from Massachusetts?
    Mr. Frank. I want to follow up on that.
    Mr. Wells, you say that part of this is coordination among 
the various Federal agencies to agree on a common mode of 
dealing with the land title questions. Is that right?
    Mr. Wells. That is correct.
    Mr. Frank. How many agencies are we talking about?
    Mr. Wells. Primarily three.
    Mr. Frank. HUD, BIA, and what is the third?
    Mr. Wells. Agriculture.
    Mr. Frank. Now, where are we in getting that agreement? Can 
we have it in an hour? If not, why not?
    Mr. Wells. The agreement was signed in 2004.
    Mr. Frank. So we have the agreement.
    Mr. Wells. The agreement is in place.
    Mr. Frank. And are the procedures carrying out the 
agreement in place?
    Mr. Wells. I am going to defer to Mr. Boyd on that.
    Mr. Frank. Mr. Boyd?
    Mr. Boyd. What we have been doing recently is to look at 
different case studies, developing case studies, if you will, 
around the country. One of them is in New Mexico, actually, and 
we are working with the State finance agency, the Enterprise 
Foundation and a number of tribes, and BIA's title plant out of 
Albuquerque to begin to really sit down and begin to assess 
what we really have to do to streamline this process. So we are 
taking it on a case-by-case basis.
    As I mentioned in my testimony as well, what we are doing 
is looking at other options. One of them is the assignment law 
that we have been working on with a tribe in the Northeast and 
the Solicitor's office at Interior.
    Mr. Frank. But this agreement we are talking about, is the 
agreement now in effect?
    Mr. Boyd. Yes, it is.
    Mr. Frank. I guess, you know our frustration, doing this on 
a case-by-case basis troubles me. Why don't we have just one 
model that we execute?
    Mr. Boyd. When we look at the BIA's total process, we have 
found out that throughout the country there are maybe a couple 
of different agencies that are responding on a timely basis. We 
are thinking that that could very well be a model.
    Mr. Frank. What agency, BIA?
    Mr. Boyd. Yes.
    Mr. Frank. So you said BIA, some agencies are on a timely 
basis, but others apparently are not?
    Mr. Boyd. Yes, sir. That is true.
    Mr. Frank. Why aren't they? Mr. Wells, do you know which 
ones they are? It is so frustrating. Why can't they just 
process the paper? What is the reason people are not responding 
on a timely basis?
    Mr. Wells. It would be wonderful if everybody could respond 
on a timely basis. One of the reasons they cannot respond on a 
timely basis outside of the two regions that were just 
mentioned, fortunately Southwest being one of them where I come 
from, is because we have this huge uphill battle to do the data 
cleanup. We also have a massive probate initiative.
    Mr. Frank. All right, let's take these one at a time. What 
is the data cleanup issue?
    Mr. Wells. The data cleanup issue is the issue where we are 
converting all of the hard-copy data that is in all the files 
for a century's worth of material over to an automated system 
called TAAMS, which is the Trust Asset and Accounting 
Management System.
    Mr. Frank. Why does that have to hold up the individual 
case?
    Mr. Wells. Because it is the same individuals that are 
doing all of that data conversion that have to do that.
    Mr. Frank. Okay. So it is a manpower shortage.
    Mr. Wells. It is a manpower shortage.
    Mr. Frank. If you had more people, then you have the same 
people doing the data cleanup who would be doing the processing 
on the individual cases. So if you had more people to do the 
individual cases, then people would not have to wait so long. 
Is that correct?
    Mr. Wells. I would add one qualifier to that.
    Mr. Frank. What is that?
    Mr. Wells. More qualified people.
    Mr. Frank. I will stipulate to that. Yes, I will stipulate 
to that. I am not asking you to hire unqualified people. I 
appreciate that.
    All right, so how many people would it take? I would like 
this in writing. How many people would it take for the BIA to 
hire so there would be no more delays due to the fact that 
people were busy with the data cleanup, in the whole country?
    Mr. Wells. I do not have that number right off the top.
    Mr. Frank. Right. I would like to have that.
    Mr. Wells. We can get that to you.
    Mr. Frank. Okay. And then the other thing, you said 
something about probate.
    Mr. Wells. Yes, sir.
    Mr. Frank. What is that issue?
    Mr. Wells. All right. Probate also has a tremendous 
backlog. I do not want to open that can of worms here.
    Mr. Frank. Why not? No, no. We are here to open cans of 
worms, Mr. Wells.
    Mr. Wells. Okay, we will open that can of worms.
    Mr. Frank. The problem is that the worms are giving us 
problems. That is exactly why we are here. Please.
    Mr. Wells. It is like a court scenario.
    [Laughter.]
    Mr. Frank. A what scenario?
    Mr. Wells. A court scenario. I should not have said it.
    Mr. Frank. No, excuse me. That bothers me. We are here to 
try to fix the problem, and no, you should not be withholding 
or worrying about opening cans of worms. The victims of the 
unopened cans of worms are why we are here. And no, that is 
totally inappropriate. We are here to fix this problem.
    What is the probate issue?
    Mr. Wells. The probate situation is that there have been a 
myriad of probates that have not been tackled over a long 
period of time. We are all about getting the backlog cleaned 
up, because you cannot do new probates without getting the old 
probates cleaned up. You do the new probates without getting 
the old probates cleaned up and the old probates affect the new 
probates.
    Mr. Frank. Again, is it a case of not having enough people?
    Mr. Wells. Pardon me?
    Mr. Frank. On the probate, this is because the land has 
been split up. Is that the problem?
    Mr. Wells. Fractionation is part of the problem. The Indian 
Land Consolidation Act is spurring a lot of this along.
    Mr. Frank. Again, is it a manpower shortage, a person-power 
shortage? A qualified person-power shortage?
    Mr. Wells. Absolutely, no question about it. I have 144 
people strictly working on probates. That is not near enough. I 
have had to extract those people out of the realty function 
that do what you are talking about doing on TSRs.
    Mr. Frank. All right. This, I think, we are getting 
somewhere. So, in other words, what we have is basically the 
Native Americans who want to take advantage of these programs, 
who want to be able to participate, they are being it seems to 
me doubly victimized. First of all, they are victimized 
historically because we let things get screwed up. And now they 
are being victimized because the people who should be helping 
them process the documents to buy their homes are too busy 
unscrewing things up. So it seems to me we owe people just to 
hire some more people. Again I will ask you, as I did in the 
first case, please let me know how many people we would need to 
fix it up. I think that is something we will address.
    Mr. Wells. We will do that.
    Mr. Frank. Thank you, Mr. Chairman.
    Mr. Wells. Thank you.
    Mr. Renzi. [Presiding.] I thank the ranking member.
    We will move to the gentleman from New Mexico, Mr. Pearce.
    Mr. Pearce. Thank you.
    I am frankly pretty underwhelmed by the factual data 
presented in both reports. It seems if you have a shortage of 
people, your report should have documented that.
    In the past when we processed one of these TSRs--say I am a 
Native American and bought a property and 2 weeks later someone 
else wanted to buy that property from me, would that 
transaction be all categorized and clean so that the next one 
could go through? Or is it going to take another 2 years?
    Mr. Wells. I do not think it would take 2 years.
    Mr. Pearce. How long would it take?
    Mr. Wells. Let me ask my learned crew back here for a 
minute, if you could hold for a second.
    Mr. Pearce. By the way, you are already one-thirty-fifth 
into the 35 minutes that it would take on the initial 
transaction, according to Mr. Feeney's expertise.
    Mr. Wells. I bet so.
    Mr. Pearce. Just in asking back and forth.
    Mr. Wells. Thirty days.
    Mr. Pearce. Thirty days.
    Mr. Wells. That is an estimate.
    Mr. Pearce. Why, once you have done the data, why don't you 
store it in the fashion that makes it accessible and easy so 
that we do not have to recreate the wheel every time? Is there 
some cultural bias inside the institution that hates solutions 
or what?
    Mr. Wells. No, it is not a cultural bias. It is the fact 
that we are now moving it all into an automated system.
    Mr. Pearce. I mean, you knew, according to a GAO report in 
1998 you had 113 man-years backlog, and the fact that you are 
now creating a TAAMS system, to me, if you are sitting here 
solving the same problems over and over again, that is more 
than a people shortage. That is a cultural problem. It is a 
mental problem inside.
    Wal-Mart bought a large retailer in Canada. My daughter 
went up there. And just by reorganizing on the shelf, the stuff 
that was there, the items began to fly out of the door, and the 
old employees from the Canadian firm said stop, stop, you are 
going to sell all the inventory. Well, that is the function of 
retail management.
    I think maybe you all have a culture that just says just 
send us more people, but we do want these convoluted old 
processes, because you say in your report that the lenders 
should become more familiar. That is, we should give the 
lenders the same change that we giving to the borrowers and 
maybe we would all then walk at the same speed because we have 
weighted everybody down with the same kind of a process.
    I am sorry, but when you describe that the lenders do not 
come in and learn the convoluted processes, that is a cultural 
problem; that is not a problem of not enough people. It is a 
cultural problem inside the organization that says we are going 
to demand that these people on the Indian reservations never 
get a breath of fresh air, never get economic development 
because we are going to make it so convoluted that only very 
few lenders will learn the process, and we are going to make 
them learn the process, rather than simplifying it to the 35 
minutes that Mr. Feeney suggested.
    You say in your report that the TAAMS has greatly, greatly 
improved the processing. How much has it lowered the time to 
process the papers?
    Mr. Wells. It is still being loaded-in right now.
    Mr. Pearce. But your comments say that it is greatly 
improved. How can you say it is greatly improved?
    Mr. Wells. It is no longer 2 years or 4 years or 6 years.
    Mr. Pearce. That is my question. How long? It has decreased 
from 2 years to how long?
    Mr. Wells. I will get you the matrix. I do not have it 
right in front of me, but I can get that to you.
    Mr. Pearce. That is the reason I am saying I am very 
underwhelmed by the amount of detail that you put into these 
reports and the effort that you put in. We are dragging the 
committee here trying to solve very difficult problems. The 
gentleman that just spoke in front of me has commented that we 
appear to be asking the questions all from our side, and I 
agree with his concept that we have sort of avoided unraveling 
this.
    How many tribes have taken over the administrative duties 
of the BIA and real estate actions under the Indian Self-
Determination and Educational Assistance provision?
    Mr. Wells. I do not have that off the top of my head. I 
know in the Northwest, it is four, but I only know that because 
I have just recently worked with it.
    Mr. Pearce. Would the BIA be open to, not you personally, I 
know you cannot speak for the BIA, but would you personally be 
willing to accept requests from individual tribes saying, look, 
we do not need tribal monitoring anymore. We do not need trust 
status. We have an articulate, good, open governance. We have 
educated people who are knowledgeable.
    And those tribes who would make application, for just you 
to distribute all the trust land to them, that belongs to them 
under your trust? Not the ones who are a little nervous and the 
ones who are concerned, would you personally think that would 
be one way to start unraveling this complex array of problems?
    Mr. Wells. Are you describing a compact situation?
    Mr. Pearce. I am just saying, just give the land to the 
people it belongs to; take it out of trust; write them a deed; 
hand it to the tribe and require that they administer their own 
problems instead of having this trust status. That is what I am 
asking.
    Mr. Wells. I personally cannot do that.
    Mr. Pearce. I did not ask. I said would you favor it?
    Mr. Wells. What I would favor is a compact situation which 
is clear to what you are describing right now. They take over 
all the responsibilities. They do it all. We, in fact, have 
tribes that do that, Flathead being one of them who actually 
took over the LTRO title duties.
    Mr. Pearce. Thank you.
    Mr. Renzi. I thank the gentleman from New Mexico.
    We move to the gentleman from Michigan, Mr. Kildee.
    Mr. Kildee. Thank you, Mr. Chairman.
    I think I would hope that both of you would take away from 
this hearing a sense of urgency. We take this matter very, very 
seriously here. I have been in Congress now 29 years. I have 
been working on Indian matters 29 years. Very often when the 
Indians are not getting good service, it is in many instances 
because of a lack of a sense of urgency. I think that is 
responsible for you two to take that back to your agencies and 
try to disseminate that sense of urgency.
    My wife is a realtor. Among her responsibilities in selling 
a home is to make sure that they clear the title. That really 
is one of the less complex parts of her job, clearing the 
title. Now, in Michigan to clear the title, of course, you go 
to the Register of Deeds. They really have a really up-to-date 
automated, very, very modern function. They have to perform. 
The Register of Deeds in Michigan has to turn over those titles 
and get that cleared very quickly, maybe because they are 
elected. They run for a 4-year term, and they really have to 
put it out. And when one does get defeated, it is because maybe 
they have not had that sense of urgency that I think that 
really you should carry back to your agencies.
    I do not mean you two specifically. I have been here 29 
years, and I have felt very often sometimes an improvement in 
the sense of urgency on Indian matters and a diminution of that 
sense of urgency. But I think they have been left out very 
often.
    Let me ask you this question, Mr. Boyd. If the BIA can 
expedite the TSR, is HUD prepared to expeditiously complete the 
process, your responsibility?
    Mr. Boyd. Absolutely.
    Mr. Kildee. How long after you get a TSR do you complete 
your responsibility?
    Mr. Boyd. It is almost instantaneous. I mean, once the TSR 
is cleared by the Bureau and the transaction takes place 
between the borrower and the lender, that completes a great 
requirement that we have. The next step, then, is leading 
towards the guarantee itself. That is literally within a matter 
of days, we have to get that TSR cleared.
    Mr. Kildee. So once you get it, how long does it take you 
then, how many days to process?
    Mr. Boyd. Twenty-four hours.
    Mr. Kildee. Twenty-four hours.
    All right, within BIA, what is the average length of time 
that it takes you to process a TSR?
    Mr. Wells. What we are shooting for is 30 days.
    Mr. Kildee. I do not know what you are shooting for. They 
have been shooting for many, many years. They have always 
promised me. I have served under so many BIA Directors, I have 
lost track.
    Mr. Wells. Six hours from beginning to end on a national 
level.
    Mr. Kildee. What was the time again?
    Mr. Wells. Six hours to complete the TSR. Six hours.
    Mr. Kildee. Six hours to complete the TSR. One day here, 6 
hours here, that is 1 1/4 days then. Where does the delay come 
in? I got straight A's in math. I am trying to figure this out 
now. Where does the delay come in? One day for one; 6 hours for 
the other. The Postal Service? We have not learned a whole lot 
here today.
    Mr. Wells. The delay comes in because, as I noted, it would 
take 6 hours to do the TSR from start to finish. Getting to the 
TSR due to the backlogs that we have built up is the delay. 
That is the 30-day timeframe that we are referring to.
    Mr. Kildee. Thirty days. Now we are up to 31 days, rather 
than 1 1/4 days; 31 days.
    You say that you are trying to work with the lenders so 
they will be able to access you and know what they are supposed 
to do. How intense is your training to the lenders, and what 
does it consist of?
    Mr. Wells. It has started in only one region so far, and it 
consists of going to the lenders, not bringing them in, but 
going to the lenders, explaining to them what we go through to 
do a TSR, what a TSR in fact is, and what the process is, and 
the timeframes that they need to give us to get geared up to do 
the TSR, and that encompasses that backlog issue which I just 
mentioned. They also understand that we have a limited supply 
of people to do all of the same type of stuff. They need to get 
in the pipeline as soon as possible so that we can get the TSRs 
elevated.
    Mr. Kildee. Well, my final statement will be, take back 
that sense of urgency. I think that is very, very important. 
These are people out there. Homeownership is very important in 
this country. We are lagging behind in Indian Country, so 
urgency is needed.
    Thank you, Mr. Chairman.
    Mr. Renzi. I thank the gentleman.
    I have just a few questions, and then we will move on.
    Mr. Boyd, in the year 2000, Congress passed and the 
President signed the establishment of the Indian Title 
Commission. Five years ago it was established. There is no 
commission. There is no report. There is no recommendation.
    I and my office, and I know several other Congressmen's and 
Congresswomen's offices have recommended individuals to serve 
on that commission. I have nominated a Navajo gentleman, 
Chester Carl, who has served on the Navajo Housing Authority 
for many years.
    What is the status of the commission?
    Mr. Boyd. To my knowledge, I know that names have been 
submitted to the White House, and that is about as far as I 
know.
    Mr. Renzi. Is it the White House that is holding it up?
    Mr. Boyd. I am not sure, sir. I know that we have submitted 
names.
    Mr. Renzi. I will need a status on it.
    Mr. Wells, I do appreciate your coming out from the 
Southwest and your backbone. I can feel your desire. I also 
appreciate your candor when you said there is significant 
workload. We both know there is a possibility you could break 
through, uncorrupt your database, your baseline database, get 
it in, get the new $1 million, $1 trillion TAAMS system up and 
running, and you could get this thing going. You possibly 
could. That is why we are going to have to follow up with this 
kind of a hearing.
    But let me say this to you. Right now, if you and I went 
out and bought a home and they did a title search, when we get 
our lender approval and guarantee, we can move into the home. 
We do not have to wait for the second one to come around. There 
is another report that is done to make sure there is no cloud 
on the title in between the time we were approved and the time 
we close. You are right, but we can move in.
    And when you go out in Indian Country and you see the folks 
just sitting there, the houses are empty and they are being 
vandalized, or the copper tubing, as you know, coming from the 
Southwest, they are going in and ripping out all the plumbing, 
all the copper tubing, and then we are left with houses where 
families were approved, the first title search was done, and 
now the house is vandalized and we are left nowhere. And you 
are seeing it all over the country like I am.
    This duplication has got me absolutely frustrated. Go 
ahead, Mr. Wells. Your thoughts?
    Mr. Wells. I think it is an understatement to me to say 
"frustrating." I am really torqued about it, coming from where 
I am, and that is one of the reasons why you sense the 
expediency and the ownership that I have right now to get to a 
clear way of doing business and an expedited way of doing 
business.
    Mr. Renzi. You talked about changes in the future.
    Mr. Wells. Yes, sir.
    Mr. Renzi. What about the double, can we get rid of it? Can 
we move them in and then go to the final cloud, looking, you 
know, just to make sure?
    Mr. Wells. That is one of the reasons why we need to work 
very closely with HUD to do this. I want to get rid of having 
to do two and sometimes three TSRs. I want to just do one and 
just get it cleared right there.
    Mr. Renzi. Homeownership is the release. You talked about 
no move-up market, Mr. Boyd. Homeownership becomes the economic 
incentive. It becomes the release for people to borrow against 
their home and then buy businesses; borrow against their home 
and send their kids to college. It is the fundamental economic 
engine in America, particularly in small town and rural 
America, and yet it is bound; it is hamstrung on the Native 
American reservations.
    I think, Mr. Boyd, in your testimony, I was trying to 
listen closely, you even went and talked about something I am 
going to drill into later, which is business leasing, which can 
take 2 and 3 years. If we wanted to be partners together and 
open up a business on the Navajo Nation, it would take 3 damn 
years to get approved. That is a whole different can of worms, 
Mr. Wells, as you referred to it. Okay?
    So here we are trying to buy our homes which can take 1 
year or 2 years for title searches, nevermind the fact of 
trying to open a business. And it feels like, Mr. Wells, is 
that BIA and the Government of America is actually a repressive 
body on the Native American trust lands that do not allow them 
that economic release.
    Go ahead, yes.
    Mr. Wells. Same feeling I have, coming from the same neck 
of the woods that you do. That is one of the reasons why all of 
the realty regulations are being rewritten so that we can begin 
to streamline this process and standardize it so we do not feel 
that.
    Mr. Renzi. Is the multiple TSRs that we do, the two, and 
you have enlightened me on three, is that regulation procedural 
or administrative? What is that?
    Mr. Wells. As far as I know--
    Mr. Renzi. It does not conform to industry standards.
    Mr. Wells. It is procedural.
    Mr. Renzi. Procedural?
    Mr. Wells. I am going to defer to Mr. Boyd because HUD 
requires that that occur.
    Mr. Renzi. Mr. Boyd, you know what we are talking about 
right now? Okay? We are talking about double, triple TSRs 
before you can move in that leaves houses vacant and 
vandalized. Is that procedural?
    Mr. Boyd. Part of it is procedural. One of the things, 
Congressman, that as we look at the process in total, initially 
it begins with the lender and the borrower sitting down. What 
the lender is now requiring from the potential borrower is a 
clear TSR. The individual then has to go, working with their 
tribe and with the BIA, then they get a TSR.
    Mr. Renzi. Okay.
    Mr. Boyd. Once they get that, they come back. They get the 
mortgage, and then we wait for BIA to record that. Once they 
record it, then we will do the guarantee.
    Mr. Renzi. Okay. I am going to come back for a second 
round.
    I move to the gentlelady from South Dakota, Ms. Herseth.
    Ms. Herseth. Thank you, Mr. Chairman.
    Mr. Boyd, in your written statement you indicated that the 
TSR process has minimal impact on IHBG and ICDBG programs. But 
isn't it true that last year $54 million from Section 184, the 
loan guarantee program administered by HUD, went unused and was 
rescinded?
    Mr. Boyd. That is correct.
    Ms. Herseth. How long have those funds been going unused, 
and what steps has the department taken to better serve tribal 
needs under that program that was authorized?
    Mr. Boyd. The breakdown was a combination of Title VI and 
184, so the total amount that was rescinded was $33 million. At 
the time, certainly I think that, and what we have done just 
recently to correct that situation, and part of it had to do a 
lot with marketing. A lot of it had to do with getting out and 
being more proactive with tribes and with the lenders.
    What we have done over the past couple of years is that we 
have begun to more aggressively work with tribes by having 
individuals from our respective six area offices to do more 
training, to actually in a sense, if you will, to help create 
housing deals to take place. In other words, lend the expertise 
to the tribe and act as the intermediary between the lenders 
and the tribes to structure new deals.
    As a result of this, especially in 184, the comparison of 
growth in the program has been tremendous. From 2004 to 2005, 
we increased the amount of home mortgages on reservations by 
130 percent. Right now in fiscal year 2005, we project that we 
will do about $80 million to $100 million worth of mortgages in 
Indian Country. So we had a learning curve, but I think that we 
have a better handle on it, and we are being a lot more 
aggressive.
    Ms. Herseth. I appreciate the update. If you could perhaps 
keep us posted, maybe with each quarter of the rest of the year 
based on what you are projecting and the increase based on the 
improved marketing and being more proactive.
    Which leads me to just make a comment about the need to be 
proactive. When we established a commission 5 years ago and you 
have Members of Congress who are trying to be proactive in 
submitting names for nominations, as Mr. Renzi mentioned, I 
would just like to reiterate the points made there, and the 
committee's efforts and staff, our offices's efforts to try to 
advance the ball, but we need your assistance as well.
    Mr. Wells, let's get to the automated system and the 
efforts to streamline this process. Is this related to the 
Cobell litigation?
    Mr. Wells. To some degree.
    Ms. Herseth. And do you feel that you have adequate funding 
once you anticipate that within 8 months, bringing us to about 
February or March 2006, to fully integrate this new automated 
system into each of the eight locations around the country?
    Mr. Wells. I would say no.
    Ms. Herseth. No, you do not have adequate funding to 
integrate it?
    Mr. Wells. Correct.
    Ms. Herseth. So even though by March you will have cleaned 
up the data, turning the hard copies in to the automated 
system, we, therefore, lack funding at that point to integrate 
it fully, in addition to all the training that will be 
necessary for those eight offices. So we cannot get to the 30 
days that you estimate unless we have adequate funding to 
integrate the system and to train people to clear the titles.
    Mr. Wells. Correct. Two downfalls on this, and that is 
that, one, as Congressman Frank noted, qualified staffing is a 
problem. It takes time to train people and to get the corporate 
memory instilled in them. Two, we need a central repository for 
all of the information that is in all of these eight title 
operations. At present, the title entities are 
compartmentalized, and they need to be able to cross-speak, so 
to speak, because Indian people have land all across the United 
States. They do not have land just in one tribal base or one 
region. It is all over the place. So we need that.
    And quite frankly, we need to be able to combine TAAMS and 
TFAS together in a meaningful way so that we get not only 
correct information, but we also have the ability to collect 
and invest and distribute the funding that is associated with a 
correct title.
    Ms. Herseth. Mr. Chairman, may I ask just a couple of 
follow-ups?
    I agree that we need that clearly. In your opinion, do we 
also need a settlement in the Cobell litigation?
    Mr. Wells. I am not going to speak on that.
    Ms. Herseth. Let me spin this out a little bit then.
    Mr. Wells. Okay.
    Ms. Herseth. If we have hard copies, as you said earlier, 
that date back centuries.
    Mr. Wells. That is correct.
    Ms. Herseth. And we all know that there have been problems 
with historical accounting, according to other officials within 
BIA about the adequacy of those records, the availability of 
those records.
    So as we are integrating into an automated system, yet 
records sit and in some cases are incomplete, what do we do 
then about moving to an automated system that is used not only 
for the purpose of dealing with titles, but when you said in 
part this automated system is driven by the Cobell litigation 
and we are cleaning up this data, and perhaps you could explain 
more about what cleaning up the data means.
    Is this automated system going to be used in any other way? 
Or does it have the capability to be used in any other way to 
ensure better management of trust accounts?
    Mr. Wells. Yes, it does. It is also title and leasing at 
the present time. It also incorporates, as it was initially 
designed several years ago, it incorporates a forestry entity 
and a land grazing entity. It will allow you to be able to 
manage most of the resources throughout Indian Country in an 
automated fashion, hooking into the title hook. The title is 
key. If you do not have correct title data, what do you have?
    Ms. Herseth. That is a good question.
    Mr. Wells. That is the reason why we are performing a 
tremendous task right now of cleaning up data.
    Ms. Herseth. So one last question because I have gone 
overtime. In your opinion, in light of the questions Mr. Frank 
posed earlier and the other questions of my colleagues about 
the shortage of qualified people to be doing what needs to be 
done within the next 8 months to automate the system, to clean 
up the data, then the additional funds that will be necessary 
to integrate that into the eight regions around the country, as 
well as to tie it in with other systems.
    Up to this date, does this constitute another example of 
putting funding based on what you said earlier about, even 
though it takes 6 hours to do the TSR, it is a matter of 
getting to the TSR, that this is another example in which the 
monies that have gone into the Cobell litigation have been 
diverted away from other programs like probate and like the 
TSRs?
    Mr. Wells. Again, I am not going to comment on the Cobell 
situation.
    Ms. Herseth. Thank you, Mr. Chairman.
    Mr. Renzi. The gentleman from California, who has been so 
patient?
    Mr. Baca. Thank you very much, Mr. Renzi, and thank you for 
your leadership in this endeavor.
    By the way, Mr. Boyd and Mr. Wells, I am a native of New 
Mexico and was born in New Mexico, so when it comes to problems 
in that area, all of us are very much concerned not only what 
happens with New Mexico or South Dakota or Arizona or 
California, but throughout our Nation, especially as it impacts 
sovereignty and equal rights.
    As we address homeownership and the American dream, you 
have talked about a lot of the problems, but I know that the 
Democrats were trying to increase the funding for the BIA. They 
were actually denied the additional funding. It seems like it 
boils down to a lot of the problems due to the lack of funding 
to the BIA to implement some of these programs, especially if 
you are talking about an automated system or streamlining part 
of the process. Without the additional revenue, it seems like 
we cannot apply the same kind of services.
    So it seems like there are double standards. Off the 
reservation, it seems like there is additional funding in the 
area of housing to assure that the process is implemented in a 
timely process, but yet within our reservations and sovereignty 
country, we are not willing to provide the revenues. So it 
seems to be a major problem. If we got over this hurdle, maybe 
then we could solve some of the problems that currently exist 
by implementing the kind of staff, to implement the kind of 
processes, procedures, and guidelines and criteria that can be 
expedited in assuring that everyone gets treated equally.
    Let me ask my question. I have a series of nine questions. 
I will submit the rest of them for the record, since I will not 
have time.
    One that I would like to address particularly, In 1986, 
there was an unverified status report completed on all existing 
properties in Southern California. Yet the land title and the 
record office staff continually disregarded this report. 
Instead of using this record and updating the records from the 
1986 baseline, the land title and record office staff 
reconstructed the entire record.
    Why can't BIA have a convenient manager sign off an updated 
status report from 1986 so we do not have to continue to 
recreate the records and, thus, take even longer to process 
this request?
    Mr. Wells. That is for me, right?
    Mr. Baca. That is for you, Mr. Wells.
    Mr. Wells. Mr. Baca--a very familiar name from New Mexico, 
by the way--I am not sure of the answer, going back to 1986, 
why that was the situation. But my staff sitting behind me, I 
am sure have duly noted that, and we will get a response to 
you.
    Mr. Baca. Right. And hopefully you guys can just sign off 
instead.
    My other question is, it is my understanding that many of 
the records to complete a title status report are not 
computerized and are not microfiched or even handwritten. Is 
there a process in place to computerize these records? If so, 
how long will it take? If not, why not?
    Mr. Wells. There is a process in place, and that is the one 
I have been referring to as TAAMS, the Trust Asset and 
Accounting Management System. That is the data cleanup, part of 
the data cleanup that I am referring to is getting that hard 
copy stuff in whatever form it is in, and you have noted 
several forms, into an automated system which will help to 
streamline this thing once and for all. That is what we are all 
about.
    Mr. Baca. Okay. This question is for Mr. Boyd from HUD. 
Because title status reports and processes are so time 
consuming, tribes have started to contract with BIA to conduct 
these functions themselves without the Department of Housing 
and Urban Development. Would the Department of Housing and 
Urban Development accept title status reports completed by 
tribal land titles and record offices?
    Mr. Boyd. Yes.
    Mr. Baca. Remember, that is for the record. You are saying 
yes, and it is noted here.
    Mr. Boyd. Well, one of the things that we have been working 
with the BIA on under the memorandum of understanding was to 
look at the process in such a way that we might be able to 
accept on a quicker basis their recording of different TSRs. So 
once we know that they have submitted a TSR to a lender and the 
actual mortgage takes place, then there is a time when that has 
to go back to BIA to be approved again and to be recorded. At 
that time, we will accept the soft, if you will, answer from 
BIA with regard to that and turn the guarantee around on a very 
quick basis. That is when we mentioned within 24 hours.
    Mr. Baca. Okay. Next question. Native American housing is 
overcrowded and substandard. Over 32 percent of the houses 
located on tribal lands are overcrowded; 7.5 percent of the 
Native Americans' homes lack safe water sewage systems; and 
less than 50 percent of the homes on reservations are connected 
to public sewer systems; and 16.5 percent of the homes on 
tribal lands are without indoor plumbing.
    These are serious issues. I am pleased with the strides 
that Native Americans have made to begin to address these 
problems when allowed to develop their own independent source 
of revenue and autonomy. What can we do to continue to make 
Native Americans more self-sufficient?
    Mr. Boyd. What we have been doing over the past couple of 
years, and I think that through the 184 program and the Title 
VI program and through the participation of a number of tribes 
throughout the country, the whole leveraging of public money 
with private money has expanded tremendously. We know that 
there are limited funds, but some tribes have really, I think, 
set the record and set the mark for leveraging these funds.
    I think it has only happened, with my knowledge, probably 
within the last 6 or 7 years where the whole concept of 
leveraging has really taken a foothold in Indian Country. That 
has helped us with regard to expanding the coordination that we 
have with tribes with State housing finance agencies, with 
foundations. It is taking I think a lot of outreach. It has 
taken a lot of education, both on our behalf as well as the 
tribe's behalf in the art of leveraging. That has helped 
tremendously.
    Mr. Baca. Thank you. I know that my time has expired, but 
one last question.
    Much land has been taken away from Native Americans. 
Approximately 90 million acres of land trusts have been removed 
from Native American hands since the late 1800s, and they 
continue to lose land through the process of condemnation, 
eminent domain, foreclosures, and transfer of property to non-
Native Americans.
    What can we do to compensate Native Americans for these 
losses, and how can we ensure that they do not lose more land?
    And then I will submit the rest of my questions for the 
record.
    Any one of you?
    Mr. Boyd. I would like to defer that to Mr. Wells since the 
whole land aspect of trust land is really under his 
jurisdiction and not HUD's.
    Mr. Wells. What we have attempted to do is stem that tide 
dramatically by taking more fee land into trust. We have a 
fairly good track record of that over the last 10 years. Rather 
than have it go out of trust along the lines you are talking 
about, condemnation, being sold off, and so forth, have it 
pulled into the reservation level, those lands that are within 
the exterior boundaries of the reservation or closely 
associated therewith. That is what we have attempted to do.
    As far as compensation, other than what the Bureau of 
Indian Affairs is attempting to do right now, I have no other 
answer.
    Mr. Baca. Then we continue to steal from them.
    Thank you.
    Mr. Wells. Thank you, sir.
    Mr. Renzi. I thank the gentleman from California.
    Mr. Cardoza from California?
    Mr. Cardoza. Thank you, Mr. Chairman.
    I am interested in asking a couple of questions on this 
Cobell case. We all want a fair and thoughtful and equitable 
settlement that all parties can agree on. I am sure, Mr. Wells, 
you agree with that so that we can move on, the bureau can move 
on, the Department of Interior and Congress can concentrate its 
efforts on other issues important to Indian Country. Given that 
the Indian-proposed settlement in June was rejected, what would 
the bureau and the Department of Interior be willing to accept 
in terms of a settlement?
    Mr. Wells. Again, I am not going to respond on Cobell. That 
is open litigation with the Department of Justice and not me.
    Mr. Cardoza. Well, maybe you can answer this question, 
which relates, but is not specific to the case. If there was a 
settlement or if Congress decided to intercede and force a 
settlement, where would the funds come? Certainly, we have a 
limited amount of money. It would have to come from some other 
place within your department under the current rules. Do you 
have any suggestions where we could find the critically needed 
funds? You say that in order to staff up and reposition and 
provide enough, we are going to need additional funding. Do you 
have any ideas where that funding could come from?
    Mr. Wells. The soft answer is no, I do not.
    Mr. Cardoza. Well, it has been a number of years since we 
have been trying to solve these issues. It really seems to me 
that it is time for someone to step in and solve the problem. 
Do you think it is appropriate for Congress to take action at 
this time?
    Mr. Wells. Again, I am not going to comment on it. That is 
for the Department of Justice. I am sorry.
    Mr. Cardoza. Thank you, Mr. Chairman.
    Mr. Renzi. I thank the gentleman.
    We will move to the gentleman from Utah, Mr. Matheson.
    Mr. Matheson. Thank you, Mr. Chairman.
    It seems to me that this is a problem that has been going 
on for a long time. I would share some of the frustrations of 
some of my other colleagues, but I am not hearing very many 
alternatives expressed. I am hearing we need to clean up data, 
and it all sounds fine and well, but I am not sure that that is 
going to solve the problem. I do not think you have made a 
compelling case. I do not think you have offered solutions for 
us to consider up here about how we can fix this problem.
    I think that in your written responses to some questions 
that are going to be given to you and you can compile after the 
hearing, maybe you can give a little more thought to coming up 
with constructive solutions, because in my opinion I have not 
heard it today. This is an ongoing problem, and we are not 
getting the right answer.
    A couple of thoughts I wanted to throw out that I would 
like your response to. First of all, has there been any 
initiative or is there thought given to the notion of giving 
tribal members more of a participatory role in this process? I 
have heard that within the Navajo reservation there is a desire 
to work more with local county recorders' offices and help 
solve this problem. I am wondering if there has been thought or 
effort to try to engage a program like that. These counties 
have the ability to process title reports. They probably are 
suffering from the same data problems you all are. I am 
wondering if that has been considered.
    Mr. Wells. It has been considered, but the fact that it is 
a trust responsibility, it has not been allowed to be an 
option. The closest that I can get to that is, again, the 
example that I used before, and that is the Flathead 
reservation where they have compacted the LTRO operation and 
they perform their own title operations as a tribe. They do 
very well.
    Mr. Matheson. Let me follow up. Chairman Ney asked this 
question at the start. What are the impediments to having these 
title searches conducted by outside title companies?
    Mr. Wells. The outside title company is not a trust entity, 
and that is a major impediment in that it is a trust 
responsibility, thus, restricted to the Federal Government.
    Mr. Matheson. So it would require a legislative change to 
allow that to happen.
    Mr. Wells. I would say that is an accurate read.
    Mr. Matheson. Okay.
    Thank you, Mr. Chairman.
    Mr. Renzi. I thank the gentleman.
    The gentlelady from Florida?
    Ms. Wasserman Schultz. Thank you, Mr. Chairman.
    Mr. Wells, you have indicated in your testimony, and during 
the course of this back and forth discussion, that staffing was 
one of your significant problems. Yet, and I checked to make 
sure that I was correct in this assumption, you did not ask for 
funding for additional staffing in your budget request. I am 
wondering, if that is such a significant problem and one of the 
major obstacles to you solving the problems that exist with 
this title issue, why you would not have asked for more money 
for staff?
    Mr. Wells. One of the reasons why I did not ask for 
additional money is because, one, I have been here for about a 
year now; and two, it takes time to pull the matrix together. 
It cannot be anecdotal anymore, like I need a whole lot more 
staff. Well, everybody wants to know how much more; what are 
they going to do; is your staff working at the full potential; 
and we are all about putting that matrix together right now.
    What we did do, though, was carve out of the realty 
component as a specific entity 144 people just to take care of 
the backlog in probate. It affects everything else we are 
talking about here. We have to get that taken care of.
    Ms. Wasserman Schultz. At what point in the year that you 
have been here did you determine that you needed more staff? 
Because a year is not a short period of time. I mean, you were 
aware and were brought in with these problems existing. So I 
hate to tell you, but that is not really a short period of time 
in which you could have determined and then asked for funding 
for additional staff.
    Mr. Wells. Understood. Right after I came here, I noted 
that where I come from there is a lack of staff to be able to 
take care of these situations and take care of these operations 
to the degree that we would hope to be able to do this, thus 
eliminating the backlog and getting things taken care of, as in 
someone comes in the door and you deal with it, and it is done 
within a reasonable amount of time.
    But to make the case for a budget increase, I was told that 
I needed to produce the matrix and measures, and that is what I 
am doing right now.
    Ms. Wasserman Schultz. You know, maybe it is that I am a 
freshman, and I am not familiar with the Washington window, but 
I was in the legislature for 12 years before coming here. I 
thought that bureaucracy in State government was significant. 
It is amazing that the Federal Government even functions at 
all. I can understand now why my constituents, who include the 
Seminole tribe, just want to throw up their hands and turn 
around and walk away from the whole ball of wax.
    Native Americans are being treated like second-class 
citizens when it comes to their being able to access affordable 
housing or housing at all. And you all are not doing very much 
of anything to show them that you are trying, up until this 
conversation and being asked questions that you admitted you 
wished you were not asked or that you had not revealed your 
hand on. It is difficult for me to understand why it should 
have taken this long for someone to come in and even recognize 
that there was a problem and that it needed to be unraveled.
    I will be honest with you. All I have heard from you is 
excuses. It is unacceptable. I came to this hearing expecting 
to hear your proposal for a solution and you are talking about 
matrix's and jargon that just makes no sense to the average 
person. I really think you need to do a quite a bit better job 
at unraveling the problem and proposing a solution because we 
are out of patience and so are the Native American tribes.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Renzi. Mr. Wells, Mr. Boyd, I just have a couple more 
questions, if you don't mind. I do appreciate your coming over.
    I want to ask, in the testimony that I read, there is a 
hint of the lenders being able to do a little more. I do not 
doubt that. Can you go ahead and drill into that a little bit 
for me? Mr. Wells?
    Mr. Wells. The need for the lenders to do some more is to 
understand, and this is just a common man's parlance here, that 
there is a backlog that I have been talking about, that there 
is a need to get in front of the Bureau of Indian Affairs 
immediately when they know there is a need for a loan, to 
trigger that switch and say we are going to need a TSR as soon 
as possible.
    Mr. Renzi. Mr. Wells, let me ask you, and forgive me for my 
ignorance. Loan origination documents are done; It looks like 
there is going to be approval. Is that when you are notified? 
Do you want them to back up a little bit earlier and give you a 
little bit of notice, knowing that they are dealing with a 
different entity than the commercial world?
    Mr. Wells. Exactly.
    Mr. Renzi. And ideally how would you see that, sir? What 
process?
    Mr. Wells. I would like to see--
    Mr. Renzi. Preliminary underwriting acceptance?
    Mr. Wells. Something along those lines. I would like to 
have that. That is along the lines that I believe that Mr. Boyd 
is talking about. I believe you call it a soft document. I 
would love to entertain that idea.
    Mr. Renzi. And that would give you maybe another 30 days 
possibly?
    Mr. Wells. Sure. And that would be able to begin to bridge 
the gap that we have been talking about here.
    Mr. Renzi. Mr. Boyd, any thoughts on lender participation, 
lender improvement for the system, other than what Mr. Wells 
talked about?
    Mr. Boyd. Well, throughout the course of the year, we do 
184 lending training sessions. We probably spend about 30 
percent of our time in those sessions with the lenders, 
educating them, introducing them to not only the 184 process, 
but also as it includes what they have to do working with the 
borrower to get the TSRs cleared. I think that that has helped 
tremendously, and I think it has also given them a window, if 
you will, into the entire process. I do know that that has 
helped them.
    Mr. Renzi. I appreciate that. Do you in your seminars 
explore at all the fact that we are having monies rescinded 
each year out of NAHASDA? Last year, $33 million were rescinded 
back, unused monies that the Government is actually putting out 
there for Native Americans to achieve homeownership, and yet we 
are not using it. Any thoughts in both your experiences on how 
we can buy down, use that money, get it down to zero, and why 
we are not?
    Mr. Boyd. As I mentioned before, I think what we have begun 
to do a better job of being more proactive. Under the Office of 
Native American Programs, we have six area offices throughout 
the country. We have designated staff in those area offices to 
go out and be more aggressive not only in marketing, but 
working with tribes, TDHEs, tribal entities and the borrowers.
    Mr. Renzi. Are these circuit riders or are these actual 
locations?
    Mr. Boyd. Within their respective regions.
    Mr. Renzi. Have you thought about maybe doing more offices, 
actual permanent locations? Maybe Congress needs to plus-up and 
provide better money so that you can actually have more 
locations spread out in Indian Country where you have a 
permanent office where people are going and the local community 
is seeing successes being made, and then their word-of-mouth is 
getting around, well, even more than that, advertising, 
marketing, but word-of-mouth of success stories. You know, you 
can go up here to a local office and they will find a way for 
you to own a home.
    Mr. Boyd. I think that would be helpful. I know, and as I 
mentioned earlier, there are a number of tribes that are doing 
a great job out there and are great success stories on 
leveraging both public and private, and in some cases tribal 
money, to do very good housing not only for rental, but for 
homeownership.
    Mr. Renzi. Mr. Wells, you came out of Albuquerque, and I 
appreciate having you back here. I do believe that just a year 
is not enough. I lend myself to the comments earlier. I do 
believe that your intention is honest. I want to ask you, the 
Navajo Nation paid for a staffer to be out there and 
participate in the Albuquerque office to try and help process 
quicker internally. How did that turn out?
    Mr. Wells. My understanding is, yes they did pay for a 
staffer out there and that turned out well. Anytime that we can 
get additional qualified staff to help, and key to this is that 
they are a tribal member. They know the nuances. As you are 
talking, word-of-mouth is the way to go on the reservation. 
Now, you can do all the advertisement and emails or whatever it 
is.
    Mr. Renzi. Success stories up there on the reservation are 
like wildfire. It spreads.
    Mr. Wells. It is the key.
    Mr. Renzi. So, Mr. Wells, the Navajo Nation sends an 
individual, well-trained, qualified as you have been talking 
about, embedded in your system in Albuquerque and they are able 
to work through the nuances and help speed up the system a 
little bit. We could do a curtain call maybe to some of the 
tribes and ask them to come back to be part of your new system 
here in Washington, or you would rather have them out there in 
the field?
    Mr. Wells. I would rather have them in the field any day.
    Mr. Renzi. Okay.
    Mr. Wells. That is where the action is, and that is where 
the rubber meets the road.
    Mr. Renzi. Okay. Mr. Wells, last question. I do appreciate 
both you guys coming over here and taking some hits. At the 
same time, you can see that we are trying to keep pushing you a 
little bit and let you know that we are on this issue. How long 
do you want me to give you before we do this again, before we 
come back and dance with each other?
    [Laughter.]
    Mr. Renzi. Honest. Reasonable, because Mr. Wells, I am 
going to request you. I realize you were like a last-minute 
replacement from what I hear, but you did a hell of a job. I am 
going to request you next time, though. How long do you want 
before you come back and face the music again?
    Mr. Wells. I would like 8 months.
    Mr. Renzi. Eight months. I will see you in 8 months.
    Mr. Wells. I would like to see 8 months and see what type 
of progress we have made.
    Mr. Renzi. Especially with the TAAMS system and the 
database. We could look at how the database is actually 
fleshing out.
    Mr. Wells. There is an activity. There you go. Exactly. 
That is what I would like.
    Mr. Renzi. Okay. And then maybe during budget season, will 
you guys come over and visit me in my office, okay, and we will 
talk, particularly some of the people have good points on 
budget. Okay?
    Thank you all.
    Mr. Kildee, anything else in closing comments?
    Mr. Kildee. No.
    Mr. Renzi. The Chair notes that some members may have 
additional questions for this panel which they wish to submit 
in writing. Without objection, the hearing record will remain 
open for 30 days for members to submit written questions to 
these witnesses and to place their responses in the record.
    I want to thank both witnesses today. I appreciate it very 
much.
    The hearing is dismissed.
    [Whereupon, at 12:49 p.m., the committee was adjourned.]


                            A P P E N D I X



                             July 19, 2005


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