[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
REMOVING BARRIERS TO HOMEOWNERSHIP
FOR NATIVE AMERICANS
=======================================================================
FIELD HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JULY 31, 2006
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-114
U.S. GOVERNMENT PRINTING OFFICE
31-543 PDF WASHINGTON : 2007
------------------------------------------------------------------
For sale by Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2250. Mail: Stop SSOP,
Washington, DC 20402-0001
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
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon
RON PAUL, Texas JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio BRAD SHERMAN, California
JIM RYUN, Kansas GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York
VITO FOSSELLA, New York WM. LACY CLAY, Missouri
GARY G. MILLER, California STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota JOE BACA, California
TOM FEENEY, Florida JIM MATHESON, Utah
JEB HENSARLING, Texas STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida AL GREEN, Texas
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin,
TOM PRICE, Georgia
MICHAEL G. FITZPATRICK, BERNARD SANDERS, Vermont
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California
Robert U. Foster, III, Staff Director
Subcommittee on Housing and Community Opportunity
ROBERT W. NEY, Ohio, Chairman
GARY G. MILLER, California, Vice MAXINE WATERS, California
Chairman NYDIA M. VELAZQUEZ, New York
RICHARD H. BAKER, Louisiana JULIA CARSON, Indiana
WALTER B. JONES, Jr., North BARBARA LEE, California
Carolina MICHAEL E. CAPUANO, Massachusetts
CHRISTOPHER SHAYS, Connecticut BERNARD SANDERS, Vermont
PATRICK J. TIBERI, Ohio STEPHEN F. LYNCH, Massachusetts
GINNY BROWN-WAITE, Florida BRAD MILLER, North Carolina
KATHERINE HARRIS, Florida DAVID SCOTT, Georgia
RICK RENZI, Arizona ARTUR DAVIS, Alabama
STEVAN, PEARCE, New Mexico EMANUEL CLEAVER, Missouri
RANDY NEUGEBAUER, Texas AL GREEN, Texas
MICHAEL G. FITZPATRICK, BARNEY FRANK, Massachusetts
Pennsylvania
GEOFF DAVIS, Kentucky
CAMPBELL, JOHN, California
MICHAEL G. OXLEY, Ohio
C O N T E N T S
----------
Page
Hearing held on:
July 31, 2006................................................ 1
Appendix:
July 31, 2006................................................ 65
WITNESSES
Monday, July 31, 2006
Anspach, Allen, Regional Director for the Western Region, Bureau
of Indian Affairs, Department of the Interior.................. 25
Barbier, Steven, Management Consultant III, Neighborhood
Reinvestment Corporation doing business as Neighborworks
America........................................................ 40
Browning, Edward, Arizona Rural Development State Director, Rural
Housing Service, Department of Agriculture..................... 23
Cabrera, Orlando J., Assistant Secretary, Public Housing and
Indian Affairs, Department of Housing and Urban Development.... 21
Carl, Chester, CEO, Navajo Housing Authority..................... 42
DuCharme, George, Director, Office of Land Titles and Records,
Confederated Salish and Kootenai Tribes........................ 5
Fullmer, Jamie, Chairman, Yavapai-Apache Nation.................. 7
Green, Pattye, Senior Business Manager, Federal National Mortgage
Association.................................................... 45
Hellewell, Edward D., Senior Vice President and Senior
Underwriting Counsel, Stewart Title Guaranty Company, Stewart
Legal Services................................................. 47
Kitcheyan, Kathleen, Chairwoman, San Carlos Tribe................ 9
Marchand, Michael, Chairman, Colville Business Council........... 13
Shirley, Joe, Jr., President, The Navajo Nation Council.......... 11
Shuravloff, Marty, Chairman, National American Indian Housing
Council........................................................ 50
Simons, Timothy L., Assistant Vice President, Federal Home Loan
Bank of San Francisco.......................................... 52
APPENDIX
Prepared statements:
Ney, Hon. Robert............................................. 66
Renzi, Hon. Rick............................................. 67
Anspach, Allen............................................... 116
Barbier, Steven.............................................. 119
Browning, Edward............................................. 106
Cabrera, Orlando J........................................... 99
Carl, Chester................................................ 126
DuCharme, George............................................. 68
Fullmer, Jamie............................................... 70
Green, Pattye................................................ 131
Hellewell, Edward D.......................................... 137
Kitcheyan, Kathleen.......................................... 75
Marchand, Michael............................................ 92
Shirley, Joe................................................. 96
Shuravloff, Marty............................................ 142
Simons, Timothy L............................................ 146
REMOVING BARRIERS TO HOMEOWNERSHIP
FOR NATIVE AMERICANS
----------
Monday, July 31, 2006
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 11:00 a.m., at
the Cliff Castle Convention Center, Camp Verde, Arizona, Hon.
Robert Ney [chairman of the subcommittee] presiding.
Members present: Representatives Ney and Renzi.
Mr. Fullmer. I would like to defer to our elder, Mr. Bobby
Baird, but on behalf of Yavapai Nation, I would like to welcome
you all here, and thank you, Chairman Ney and Congressman
Renzi, for holding these hearings. I think it is critical to
Indian country that you come out here and see what it is we're
doing and what our needs are.
So welcome to Yavapai-Apache Nation. It is customary in our
way that whenever we deal with important issues and daily
issues, that we are a powerful people. So on that behalf, I
have asked one of our elders, and he graciously accepted, to
give our morning invocation and prayer on behalf of our Nation.
Welcome and thank you. (Speaks in Apache).
Mr. Baird. Thank you. Good to see all of you here this
morning, and I'm going to pray for each and every one of you,
that you will do what you have to do, what you have come here
for, and to accomplish everything. (Speaks in Apache).
Chairman Ney. Remain standing. We'll proceed with the
Pledge of Allegiance.
[Pledge of Allegiance recited]
Chairman Ney. I want to begin. My name is Bob Ney from
Ohio, and I am the chairman of the Housing and Community
Opportunity Subcommittee of the House Committee on Financial
Services, and I'm pleased to be here today with all of you, and
with the chairman. We went with the chairman this morning,
Congressman Renzi and I, and we had a great tour around to see
the hard work that you have all done to try to make the lives
better for the Yavapai-Apache Nation.
I would mention that on my wife's side, my two children
have Apache blood and the boys are very proud of that, so I'm
especially happy to be here.
I wanted to just take a second. Congressman Mike Oxley from
Ohio is chairman of the full Financial Services Committee, and
the ranking member is Congressman Barney Frank of
Massachusetts, and they send their regrets for not being able
to be here. They are in full support of this hearing, and our
subcommittee ranking member, Maxine Waters, who was here 2
years ago when we came out to Tuba City to do the hearing, was
there at the time with Congressman Matheson and Congressman
Renzi, of course, and she sends her regrets.
I should also mention that we have some staff here today,
and representing Mr. Barney Frank is Jeff Riley. We also, at
the end, will say some names. Let's have the staff raise their
hands; these are wonderful people who work very, very hard in
Washington, D.C.
I'm extremely pleased to be here. Congressman Renzi, my
great colleague, whom I get to share some time with every week
as we commute back and forth to Washington, has just been a
champion. Congressman Renzi, I want to thank you, but I also
want to mention that Congressman Renzi requested a hearing 2
years ago in Tuba City, and when we looked back through the
records, we wanted to see when the previous hearing by the
Housing Subcommittee that oversaw Indian housing issues, when
it was, and we went back a decade, and 3 decades, and 5
decades, and finally went back to when there was no more
written record. That was the first hearing in the history of
the U.S. House on Indian Nation land.
This is the second hearing in the history of the U.S.
House, so it's very important to the hearing process. This
will, without objection, serve as an official hearing of the
U.S. House. It's actually nice to be here. Ohio is hot, but
it's very humid, so this is a little bit more of a dry heat.
It's nice. But most importantly, it's good to be here because
all the hearings can't be done in Washington. Coming out here
where you, every single day, try to make things better for all
the people that you represent, it's a wonderful time to be here
versus having this hearing in Washington.
I want to let you know the importance of the hearing
because this does count as an official hearing. We are able to
take the thoughts and observations of the panelists we're going
to have today and put them into the official hearing record to
be able to utilize that to try to help people here in the
Indian Nation.
So this morning, the Subcommittee on Housing and Community
Opportunity will meet to discuss removing the barriers to
homeownership for Native Americans, and what can be done to
improve homeownership opportunities on reservation lands.
Today marks, again, the second time in the history of the
U.S. House that the Housing Subcommittee has held a hearing on
tribal lands.
There are an estimated 2.5 million Native Americans in the
United States, made up of 562 federally-recognized tribes.
While 1.7 million live outside tribal areas, more than three-
quarters of a million Native Americans live on reservations and
other tribal areas. This large population of Native Americans
is often plagued with poverty, unemployment, and homelessness
due to a lack of jobs and affordable housing.
This situation is partially due to the unique, and at times
very complex, relationship that the Native American tribes have
with the U.S. Government. Native Americans living on
reservations, of course, are U.S. citizens. Native American
tribes, however, are recognized as domestic sovereign nations
with treaty relationships with the Government. The Federal
Government holds in trust approximately 56 million acres of
trust land for tribes and Native Americans.
Because this land has been taken into trust by the United
States, specifically the Bureau of Indian Affairs, the legal
title to the land is also held in trust. Not having legal title
means that while the tribe is the beneficiary of the land, they
do not have the right to sell, lease, or mortgage the trust
land, nor can they lose it for failure to pay taxes. This
creates a unique situation that causes lenders to be hesitant
to invest and lend money to Native Americans wishing to own
their own homes, which is the dream of homeownership across
this country.
Lack of affordable housing for Native Americans has been
exacerbated, in part, because of complicated land title issues
and the amount of paperwork and time it takes to obtain a title
to reservation land.
I was talking with the chairman today and Congressman
Renzi. Last year my family and I moved in the middle of our
District. In 3 to 4 days and I think at a minimal cost of $4-
to $500, we were able to acquire our title, and I know that can
be done, and that--we were falling under the same situation,
but with what you have to follow here, we wouldn't have been
able to acquire our house and have been able to have moved.
So I know the U.S. Government has worked in recent years to
improve housing opportunities on the reservations. For example,
HUD has a variety of the individual programs designed to assist
Native Americans with housing needs, but there is still so much
more to be done, and I want to thank, again, Congressman Renzi,
who has tirelessly worked on behalf of his constituents with
passion, and you can see it in his face, and we've heard it
many times where he has been relentless on this issue and other
issues dealing with Native Americans, of course a wide variety
of other issues. We help each other in the process of recovery,
because we're at all representing our Districts, but we're all
representing as a Federal Legislature the entire country.
I want to thank you, Congressman Renzi, for bringing all of
this to the forefront, and I want to thank you again for having
us out here.
Without objection, I'm going to yield and let Congressman
Renzi chair the subcommittee for today.
Mr. Renzi. [presiding] Thank you, Mr. Chairman. Welcome,
everyone, to the First District of Arizona, and, Jamie, thank
you so very much for your hospitality, your kindness, and your
leadership on housing issues and for taking the time to come to
Washington, D.C., and teaching me. I feel like I'm among
friends who have taken the time, Kathy and Joe, to teach me the
issues. It's been your advocacy that has allowed me to learn,
and then working with Mr. Ney and Ranking Members Barney Frank
and Maxine Waters, together we've become a team in trying to
push this forward and fight to break down the barriers.
I was listening to the prayer today, and I was saying to
myself my own prayer. I hope that the facts on the ground today
provide us with the knowledge to take back to Washington, not
just for the sake of knowledge, but for change, and ultimately
that's what has to happen, is that these barriers, these
impediments, this way of life must be lifted, and your
leadership is some of the toughest leadership in the country.
We were over on the Yavapai-Apache Nation at an elderly
center with Jamie just a half hour ago, and we were talking
about the fact that we are in the largest land mass of poverty
in America, right here, all throughout eastern Arizona, up
through San Carlos, Whiteriver, Yavapai-Apache, Navajo, and
Hopi. The largest land mass of poverty in America.
This chairman--the reason his heart is so big on this
issue, is that he represents one of the highest concentrations
of poverty in America, so he knows it. He understands it. He
feels it, and he's been a champion, and I'm grateful, and none
of this could have happened without your understanding and
leadership, and what you've seen in your own world and back
yard, and the same goes for Barney and Maxine, and I'm grateful
for their help.
So I'm hopeful today that my friends will bring knowledge
to us and will show us and talk to us, not just about the title
search issue, which we are trying to understand, but we've got
witnesses who have come from all over the country, from Alaska,
from Washington D.C., and from the west. I've got my friends
from the financial services industry here who have helped break
down some of the barriers already, particularly up in
Whiteriver, and we've got good people who have come together to
help teach us on this issue so that we can move forward.
I'm grateful that HUD's Assistant Secretary for Public and
Indian Housing, Orlando Cabrera, has made the trip from
Washington. He has been different in Washington, not just a
bureaucrat who gets up and reads speeches, but a man who has
also understood the plight and the struggle, and I'm looking
forward to understanding and listening to him and working with
him, and I'm grateful for that. Thank you for coming out.
This is the second field hearing on Indian housing in the
history of the U.S. Congress. This chairman has made this
happen. Can you imagine a Congress of the United States going
all the way back to the 1800's and never doing a field hearing,
never doing a hearing that addresses Native American housing
concerns, the poorest of the poor, and so I'm grateful,
chairman, for your championship, and as I explained, we're
going to hear from BIA on this topic of title searches, but I'm
not limiting or constricting you in any way to just title
searches, because we have a chance to understand other
impediments you can bring forward today, and we can take them
away and work on that.
I want to thank you--thank our team and the subcommittee
members who pulled this together and came out in August, and
I'm grateful. I bothered you for 6 months, but every time I
came to you, you have been great in saying, ``We're going to do
it, we're going to do it as soon as we get to recess,'' and you
guys got it done for me.
With that, I want to thank the chairman. Jamie, my friend,
thank you for hosting this for us, and let's go ahead and
begin.
Our first panel consists of George DuCharme, the director
of the land and title records office for the Salish and
Kootenai Tribes; Jamie Fullmer, chairman, Yavapai-Apache
Nation; Kathy Kitcheyan, chairwoman, San Carlos Apache Nation,
the first female chairman in the history of San Carlos; Mike
Marchand, chairman, The Confederated Tribes of the Colville
Reservation; and the Honorable Joe Shirley, president of the
Navajo Nation. Mr. President, thank you for coming all the way
down. We're grateful that you came.
With that, George, we will begin with you.
STATEMENT OF GEORGE DUCHARME, DIRECTOR, OFFICE OF LAND TITLES
AND RECORDS, CONFEDERATED SALISH AND KOOTENAI TRIBES
Mr. DuCharme. Good morning, Chairman Ney, and members of
the subcommittee.
On behalf of The Confederated Salish and Kootenai Tribes
and our tribal chairman, the Honorable James Steele, Jr., it is
my pleasure to deliver testimony on the issue of removing
barriers to homeownership for Native Americans. My name is
George DuCharme, and I am an enrolled member of The
Confederated Salish and Kootenai Tribes. I am the director of
the Land and Title Records Office for the Tribal Lands
Department, and I have served in that capacity since December
of 1996, when the tribes compacted the title plant from the
Bureau of Indian Affairs.
The Flathead Reservation is located in the great State of
Montana. The reservation comprises 1.3 million acres and has a
Native American population of just over 7,000. Due to the
Homestead Act and the Allotment Act in the early 1900's, the
tribes' ownership in the 1960's and the 1970's fell to less
than 50 percent of the land base. Today we own approximately 65
percent of the land base.
We have a very active acquisition program. The individual
tribal membership ownership is less than 3 percent of the
reservation. The Homestead Act took all of the prime building
lands, what was left of the mountainous timber lands, farm
lands, and wetlands, so area for housing is a scarce commodity.
As I said, we have a very active acquisition program. We
use tribal revenues and settlement. The Kerr Dam Litigation--
the Kerr Dam was built and flooded much of the reservation, so
we're actually buying back higher ground, I guess, for housing.
We also receive funding from the Federal Government for the
buying of the individually-owned fractionated interests due to
probates, and that is through the Indian Land Consolidation
Act.
In 1990, the tribes implemented Public Law 93-638, contract
with the Bureau of Indian Affairs to operate the lands program.
The contracts were converted to self-governance agreements in
1993, when the tribes consolidated all Bureau of Indian Affairs
funding as one of the first 10 tribes to be included in the
Self-Governance Demonstration Project. In the Tribal Lands
Department, our staff of approximately 30 employees administers
agriculture, minerals, grazing leases, rights of way,
appraisals, probates, land acquisition, billing and receiving,
and resource planning programs. We have contracted and do all
of the Bureau's function on the Flathead Indian Reservation,
except for the superintendent and his secretary, and we have an
irrigation project, and that is the sole entity of the Bureau
on the Flathead Indian Reservation. The tribes do all of the
management.
I mentioned all these other appraisals, rights of way,
probates, and acquisition. Title status reports isn't all that
the LTRO is doing. We record and encode all of those documents
into a national database. It's not just TSR's we're dealing
with. We've got a much larger charge than producing a title
status report. All of these other documents are related to that
title status report and they're encumbranced against that title
statute report.
Originally, when the tribes sought to include all land
programs in a self-governance agreement, the BIA deemed LTRO as
an inherent Federal function that was not eligible for
inclusion. So we asked--we the tribal government asked--for a
solicitor's opinion on this, and the solicitor came up with an
opinion that yes, it was, in fact, compactable, and we
compacted it and we operate it today.
So in 1996, the tribe assumed management of the LTRO. We
believe it makes sense to have the land title and records on
the reservation for the people and the land itself. I publicly
acknowledge Mr. Stanley Speaks, Regional Director of the Bureau
of Indian Affairs Northwest Regional Office and his staff for
their commitment. Once he realized that we were serious, that
we were going to compact the title function, they got behind us
and made sure that we were a success, and we are a success
today. It isn't because we, the tribal LTRO, can do the job
better than the BIA LTRO. It's because of our vested interest
in the outcome.
First, we have a closer tie because it is our land we're
dealing with. It's our people, our friends, our neighbors. So
we serve these people on the reservation. The BIA in the
northwest region, on the other hand, must serve 44 reservations
or tribes in five different States. We can do it sometimes
faster, but it's not because we're better. We're dealing with
one tribe. The Regional Office has a multitude of tribes they
must deal with.
On the Flathead Indian Reservation, as it is in all of
Indian country, in order to obtain a mortgage on trust land, a
certified TSR is required. This is true whether you are
borrowing from a bank or the tribal credit program. Between
January of 2004 and January of 2005, my office produced 275
certified TSR's for mortgages alone, and as I stated before,
mortgages isn't the only thing we produce the TSR for. It is
for a deed, for land transfers. It is for a probate. TSR's for
mortgages isn't the only issue.
It can take anywhere from 3 to 10 days to produce a
certified TSR. The short timeframe to produce a TSR is due to
the fact that we in the LTRO are personally familiar with each
allotment, who the owner is, and where the allotment is located
on the reservation; and, additionally, we have local signatory
authority. The superintendent at the agency was delegated has
the Secretary's signatory approval.
Also, prior to the tribes compacting the LTRO, the
Northwest Regional Office LTRO certified all of our tracts and
ownership, so I don't have to go back to the original trust
patent and chain forward to today. I can go back to where it
was last certified and chain forward to today.
Compacting or contracting the title function from the
Bureau of Indian Affairs may not be the solution for all
tribes. We were fortunate on the Flathead Indian Reservation to
have had a successful working knowledge of the realty functions
performed by the BIA. The tribal realty staff is the old BIA
staff. They're just wearing a different hat. We just hired them
straight across and they're tribal employees. You're a tribal
employee today, and yesterday you worked for the Bureau. So we
have a working knowledge. We didn't get rid of them and start
over from scratch.
Mr. Renzi. Can you wrap up?
Mr. DuCharme. Okay. I'll do that. In closing, I emphasize
that the tribes are proud of what we have done and I appreciate
your time.
[The prepared statement of Mr. DuCharme can be found on
page 68 of the appendix.]
Mr. Renzi. I apologize. Your testimony is profound. You all
have done it, so I wanted to let you know we have 5 minutes
because we have 20 people and we're going to be here until
midnight if we don't. Thank you for being here.
Chairman Fullmer.
STATEMENT OF JAMIE FULLMER, CHAIRMAN, YAVAPAI-APACHE NATION
Mr. Fullmer. Good morning, Chairman Ney and Congressman
Renzi, and welcome to Yavapai-Apache Nation. I was proud and
honored to show you around today, so that you can see the work
that we've done as a Nation and what we're working on as a
people to better ourselves for the future. We appreciate the
opportunity to address you with our concerns in this forum. We
have several issues we would like to present for your
consideration.
We see some very real barriers to Native American
homeownership and housing development within our own community.
To start, income requirement guidelines for participation in
Government-subsidized programs needs to be increased. Current
income levels are at or below poverty level and discourage
self-sufficiency and self-determination in our community.
Each Federal and State Government agency authorizing grants
awards to American Indian housing has different income
thresholds for qualifying. This lack of consistency creates
competition among the programs and is confusing to our tribal
program and to our community members. This needs to be changed
to one acceptable income standard, maybe within each State.
This way projects in very low-income areas, particularly our
Indian tribal communities, would not be at such a competitive
disadvantage to applicants from higher income areas such as the
metropolitan areas.
Because we serve families directly from our waiting list,
and we serve the very lowest income tenants first, we, as a
Nation, can never hope to receive enough income from rents to
cover all of the operating expenses. This leaves huge burdens
on our tribal government to fund and carry the remaining
overall cost burdens.
Funding needs to be increased in all Federal Indian housing
programs, and there needs to be coordination and flexibility
between these Federal programs to enable the tribal housing
departments to utilize funding from all these different
programs.
With the tax credit program, generally grants made from
Federal funds used to operate a housing project after it is
built and occupied causes a reduction in tax credits available
to this project. This reduces investor equity, which will make
the projects much more expensive and impractical.
The IRS put forth a regulation saying certain types of
rental assistance, including HUD Section 8, do not require a
reduction in tax credits. We would like to request that the IRS
add NAHASDA rental assistance to this same list. The argument
is that NAHASDA replaced HUD financing in Indian country,
including Section 8, and NAHASDA rental assistance should be
treated like Section 8. This would effectively prevent a
reduction in low-income tax credit program funds.
Land and land lease issues are a major barrier to Native
American homeownership. Currently the Bureau of Indian Affairs
reviews, approves, and records all land leases and other land-
related documents.
In the case of our Nation, one BIA office, the Truxton
Canyon Office, handled these tasks for the entire northern half
of the State of Arizona. This office employs one individual to
handle this activity for five tribes residing in our area.
Also, there is a major disconnect, as I see it, between the
regional offices and the real estate headquarters, which,
believe it or not, for Arizona is located in New Mexico. While
in the local counties, recording land documents such as deeds
and right-of-way for non-reservation land takes approximately
30 days, as was mentioned earlier, and it can take the BIA
upwards of 1 year to complete this same type of transaction.
This indicates to me several points: lack of trained
personnel; lack of adequate working procedures;, and a lack of
commitment of resources by this agency. Title status reports,
as was brought up, are a requirement for compliance with
Federal funding by several programs, as well as getting home
loans from lenders.
The Yavapai-Apache Nation has applied on several occasions
for TSR's, some of which we've never received to this day, and
others have taken as long as 2 years to receive through the
Bureau. This level of performance, to me, is unacceptable, and
it must be improved to allow participation in these programs by
our tribal community.
Finally, as I'm sure you're all aware, Federal program
reporting requirements are laborious, complicated, and
needlessly verbose. Everyone agrees that grant dollars must be
accounted for and all expenditures paid with grant funds
approved. However, progress reports should show progress from
one period to the next with a forward progress for completion
and compliance, and not recanting every activity from the
previous reporting periods. This type of activity is
nonproductive and unnecessary.
In closing, I want to thank you for your time and
consideration, and on behalf of my Nation, we're very proud of
what we've accomplished on our own accords, and we believe in
ourselves, but we also recognize that we need the support, both
financial support, as well as support of programming from the
Federal Government, and would ask that you please consider
these in your thoughts. Thank you. Kayhah.
Mr. Renzi. Thank you very much.
[The prepared statement of Mr. Fullmer can be found on page
70 of the appendix.]
Mr. Renzi. Chairwoman Kathy Kitcheyan.
STATEMENT OF KATHLEEN KITCHEYAN, CHAIRWOMAN, SAN CARLOS TRIBE
Ms. Kitcheyan. Welcome back to Arizona, Chairman Ney, and
also our Congressman, Rick Renzi. Thank you for coming. As
already noted, my name is Kathy Kitcheyan, and I am honored to
testify today to provide the views of the San Carlos Apache
Tribe on the issue of removing barriers to homeownership for
Native Americans.
With me in the audience today are tribal council member
Robert Olivar, who is the chairman of the San Carlos Housing
Board of Directors; Ronald Boni, executive director of housing;
and also Cassandra Kid who is the director of planning.
Thank you for your deep commitment to addressing the needs
of housing in Indian country. In particular, I would like to
thank Congressman Renzi again for his tireless efforts. You are
also a champion, sir, in helping us obtain a better standard of
living for our people.
Two years ago, I testified in Tuba City on our housing
needs. I expressed my hope at that time that we could work
together to find ways to increase decent and affordable
housing. Since then, my tribe has redoubled its efforts to
address this problem. Today I am pleased to report that the
tribe, with your help, has made some strides in providing more
housing opportunities for our people, but there is much left to
be done.
My reservation is in desperate need of decent housing. I
have attached pictures to my testimony of some of the
substandard housing conditions that continue to plague my
community. As you can see, we are still struggling to meet a
very basic standard of living.
Here are some statistics on my reservation. There are 3,325
families on the reservation and 3,147 families are low-income
under NAHASDA. 1,327 families live in substandard housing
conditions, similar to the pictures you have, sir. Another
1,358 families live in overcrowded conditions, some as many as
15 people in two rooms--two bedrooms or three-bedroom homes.
2,700 families still need homes.
In fact, we need to build 145 homes per year for the next
10 years to meet the housing needs of the current population,
which has increased by over 6 percent over the last 2 years.
Due to financial limitations, the San Carlos housing
authority can only build 40 homes over the next 2 years. We are
decades behind the surrounding areas in providing decent homes
for our people. We are working very hard to address this
serious problem.
We believe the essential ingredient to increasing
homeownership on the reservation is through a continuing
commitment from the Federal Government and investors to this
issue, coupled with more educational opportunities and economic
development.
Since Tuba City, we have recently become eligible for HUD
Section 184 programs. The tribe has partnered with Wells Fargo
Bank.
The mortgage process for any first-time buyer is confusing
and overwhelming. For a Native American from an isolated, poor
area with cultural, language, and transportation barriers, it
can be even more daunting. However, we are very appreciative
that Wells Fargo has gone the extra mile to make this program
work. They have met with folks on the reservation, and have
also assisted with the paperwork and they continue to do so.
Five families have been approved for Section 184 in the
past 6 months. Only a small number of Apache families, though,
came in under Section 184, due to our staggering poverty and
unemployment levels. Our unemployment rate is 76 percent, and
our poverty rate is 77 percent.
Testifying at the Tuba City hearing resulted, though, in a
very positive development for us. Key Bank heard about our
plight. In fact, there was a person at the Tuba City meeting
who relayed the information about San Carlos, and afterwards
they reached out to us. So I'm pleased to say that we are
working together with Key Bank to see if we can enter into a
partnership to create a comprehensive package so that families
who are very low income and not eligible for Section 184 can
own a home.
Key Bank proposes to lend approximately $15 million for
home mortgages over the next 2 years. This is a great start,
but it only skims the surface in terms of meeting the overall
housing needs on the reservation.
There are still many barriers that must be removed before
our housing problem is resolved. The lack of economic
development is a barrier to homeownership. At San Carlos, there
are roughly 1600 jobs for over 13,000 people. We need more jobs
so that our people can afford to own their own homes.
Furthermore, we need more educational and training
opportunities so our people are qualified for jobs and can
perform them. We depend on NAHASDA for capital. We are making
progress with Wells Fargo and Key Bank, but we still have a
long road ahead of us.
The difficulties with leasing are a barrier to
homeownership. The tribe must obtain approval from Interior for
its long-term lease agreement. There are inordinate delays and
thence the administrative hurdles in this process make it
difficult for us to attract lenders. We believe that this
Federal process is unnecessary under today's self-determination
policies. We support legislation that would eliminate this
approval process. Navajos and Tulalip are already exempt under
the law. We should be exempt, also. I have attached proposed
legislations for your consideration.
Let me tell you a story. Last week one of our housing
employees went to Albuquerque to expedite the signing of a
document for a TSR, and before he went, he e-mailed the
document so that they could review it and it could be processed
quickly.
Well, when he arrived in Albuquerque, he discovered that
BIA lost the document, and so while he was there, it had to be
e-mailed again. This is unacceptable practice. We know that
some of our--the tribes in the northwest, Colville and the
Salish Kootenai, 638 this entire process, and that's what we
would like to do, as well.
The lack of infrastructure is a barrier to homeownership.
My reservation, as you heard before, has 1.8 million acres, but
only a small percentage can be used for residential building
purposes due to the rugged terrain and lack of infrastructure.
As I stated in Tuba City, the tribe's utility
infrastructure is inadequate. When you build homes, you need a
way to provide electricity, water, plumbing and gas. We need
funding to do all of this.
In conclusion, we want to continue to work with you to
develop more homeownership opportunities, not just for the San
Carlos Apache tribe, but for all of Indian country in the
Nation. Thank you, and I hope you find this information
helpful.
Mr. Renzi. Chairwoman, I want to thank you so very much. We
appreciate your comments.
[The prepared statement of Ms. Kitcheyan can be found on
page 75 of the appendix.]
Mr. Renzi. We'll move now to the president of the Navajo
Nation, Joe Shirley.
STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, THE NAVAJO NATION
COUNCIL
Mr. Shirley. Thank you, my brother. The very honorable Mr.
Rick Renzi and very honorable Chairman Ney, thank you very much
for affording me the opportunity to share with you a few
sentiments regarding homeownership on Navajo land, as well as
throughout Native America.
I want to express my appreciation on behalf of Navajo
Nation, the Native America, for reaching out to us. Oftentimes,
Native America comes to you in Washington to share with you
some of the challenges facing us here, but in this case you are
reaching out to us, and we just want you to know we appreciate
that.
So thanks for reaching out and, of course, you have my
written testimony. I'll just go ahead and very quickly
summarize what is in it. I just have a couple of things to say,
really, and then I have my younger brother, Mr. Chester Carl,
who is our housing expert on Navajo land. If there are any
questions that you might need to ask of me, he will help me
answer those questions.
Back on Navajo land, we still have a lot of red tape
surrounding the title status report processing system, and that
produces a hindrance to homeownership, trying to get at loans.
You know, we want to get at building houses with roots, and
that's something that you can go along or tag along, you know,
and so the red tape that is created in trying to get at the
title to go for a loan is just unbearable, and I think some of
my colleagues here have shared that with you, and so you asked
me what are the barriers, you know, to get that homeownership.
So that's one, and, of course, we shared this with you at times
past, and I want to share that with you again.
What that means is it still takes time, anywhere from 2 to
3 years, you know, to get this at this process to where we can
talk loans with banking or the different financial institutions
that can finance these homes. So when they can't get answers
right away, some of the people who are wanting to get a
homeownership, what happens is they go off Navajo land to buy
mobile homes, modular units, you know, and it zeroes in on the
economy of Navajo land.
We would like to see monies stay there on Navajo land, but
when they go for homeownership, you know, a mobile home, a
modular home, the monies go off Navajo land, and that's not
good. So--and then, also, one of the things is because they
can't get at the homeownership or a piece of ground to get a
loan to build a house on Navajo land, some of our members are
buying houses in the border towns, and that is also getting the
monies off Navajo land, you know, and that's not good, and
they're having to commute from the border towns where they have
a house, into the heart of Navajo land, whether it's Chinle or
Window Rock, to get at their work.
So in order to help us to get at homeownership, we need to
get away from the red tape that is inherent in the title status
report processing. I'm not exactly sure where the Bureau is
with it. One of the things that I feel is that it is not a
priority with them to really work this title status report
processing, and we need to have them make that a priority, but
that's another time, I guess.
But, otherwise, what I would like to offer here--you also
asked me what are some of the new initiatives that you have to
take on to get away from these stumbling blocks. There is where
I want to have the Navajo Nation be afforded the opportunity,
under 638 of title processing, to have the Navajo Nation
establish its own title plant.
We did that with our business site leasing recently to
where the BIA is just totally out of picture, you know, and
right now the Navajo Nation--the Navajo Government can approve
all business site leasing, but we don't stop there.
If our Chapters out there are certified, according to the
Navajo Nation law, then the certified Chapters that have the
land use plan in place can approve business site leases at the
local level, and I think this could expedite bringing economic
development to Navajo land.
That's what I see with homeownership. If we can get away
from the Bureau and the processes that comprise a lot of red
tape and have the Navajo Nation establish its own title plant
on Navajo land, that would be the way to do that, and I want to
recommend that to you, the Honorable Mr. Renzi and the
Honorable Mr. Ney, and I think that will cut out a lot of this
time, and the more time we take out, the more expeditious we
are in establishing housing with roots on Navajo land.
That's one of the things I want to share with you, and then
also the last thing is, of course, we need monies to get at the
houses. I appreciate the Administration going forward to
propose the new land lease for the using the multi-race census
data, basing it in 2000, and if we can get away from there, I
think that would mean more monies for the different tribes that
are out there, especially in the Navajo Nation. So the more
money we have, the more homes we can build for homeownership.
So this is something that I wanted to share with you. I
believe that we have put the legal infrastructure in place to
get our own title plant. We are very diligent and we are using
our own monies right now to do that, but it would be good if
the Federal Government could infuse money to help us move
forward in putting this title plant in place. I think that will
go a long way in cutting out some of the red tape and some of
the barriers in going for homeownership on Navajo land. Thank
you very much, my brother, Mr. Ney.
[The prepared statement of Mr. Shirley can be found on page
96 of the appendix.]
Mr. Renzi. Thank you, Mr. Shirley. Thank you for your
insight, and I appreciate Mr. Carl being with you today and
we're going to look forward to some of your answers as we get
into the Q and A session.
Mr. Marchand, thank you for coming. I'm grateful for your
traveling this far. Go ahead.
STATEMENT OF MICHAEL MARCHAND, CHAIRMAN, COLVILLE BUSINESS
COUNCIL
Mr. Marchand. Good morning, Chairman Ney, and Congressman
Renzi, and thank you for this opportunity. My name is Michael
Marchand, and I am chairman of the Colville Business Council in
Washington State. Most of my life and my background has been in
economic and community development, with a masters degree in
urban development and planning, and I concur with the
panelists, and we submitted a written testimony, also, and I'll
speak mainly to our taking over of the land title records
office issue.
Also, I'm accompanied by Sharon Redthunder, who has had
about 40 years of experience with our realty functions. If you
have any technical questions, she's here to answer that.
Our tribe is located in Washington State, on about 2,100
square miles of land. In the early 1990's, we discovered that
our Northwest Regional Office had not updated records on most
of the lands within our reservation for a period of over 8
years.
The regional office would generate TSR's by manually
searching through piles of documents. It was a real slow
process. A single report took 60 to 90 days, and we looked into
that and felt that we could do better.
In 1996, we started negotiating with the Office of Park
Land to take over those functions. The BIA was not very helpful
in this process and resisted our attempt to contract those
functions, but it did get concluded by April of 1997. Today we
operate our own functions and we can generate the TSR's in one
day. We believe that's mainly because it's our own people
working in there, where we have more control over the process,
and it's more efficient locally.
We can--an important part is we can acquire the tribal
credit which does a lot of our housing--the housing loans for
tribal members, and things are working pretty well in those
areas. So I just want to impart that to you. I think the key is
more local control and local decisionmaking, and I think that
is the reason for the success on my reservation.
We also have other problems as the other panelists
mentioned, things like infrastructure and planning, and so
forth, but that's mainly what I wanted to report on. Thank you.
Mr. Renzi. Thank you, Mr. Marchand.
[The prepared statement of Mr. Marchand can be found on
page 92 of the appendix.]
Mr. Renzi. We're going to go ahead to the questions, and
then we'll move on to the second panel.
Chairman Ney, would you like to start?
Chairman Ney. Thank you, Mr. Chairman. I also want to
mention that Congressman Greg Hall had talked to me, we were
actually voting last week about 1:00 o'clock in the morning, as
you know. He mentioned he was coming here from New Mexico and
he had some flash floods, or something, and he couldn't be
here, and he looked forward to being here and sends his
regrets.
Mr. DuCharme, the question I had, I heard you say it takes
3 to 10 days to produce a certified TSR, and I think you ought
to be commended for being able to do that, but you said it may
not be the solution for all of the tribes. Why is that? And
anybody else that would want to comment, too, why it is or
isn't the solution.
Mr. DuCharme. Basically it's the infrastructure; whether
they have the manpower to do the job. On the Flathead
Reservation, we had the BIA staff. When we compacted, that
became our tribal staff and that is the staff who do the job.
Do you have the knowledge base and the experience? I think that
is the key.
And another key is you've got to be aware that the funding
is not going to be fully adequate. The Bureau is not going to
provide every nickle and dime that you need. Our title plant is
subsidized by the tribal funding. We aren't fully funded, so--
Chairman Ney. I'm sorry. I didn't mean to interrupt, but to
follow through with what you're saying, did the Federal
Government fund anything for this?
Mr. DuCharme. Yes. They funded the initial start-up costs
and they provide salary for 1\1/2\ staff persons.
Chairman Ney. So your total cost to do this--they did the
start-up, the staff. For your ongoing operational costs, are
they 50-50, 60-40, or what percent?
Mr. DuCharme. I would say it is roughly 60-40.
Chairman Ney. So is that 60 percent Federal?
Mr. DuCharme. Right.
Chairman Ney. Anybody else? Is that feasible for the rest
of you, if the Federal paid--
Mr. Shirley. I think so. Of course, when we're talking
about 638 and having the tribes do their own programs, the
Federal programs, that has been a problem. So I think it
behooves the subcommittee to really zero in on that when it
comes to appropriation time. Some of the programs that have
been taken over by tribes under 638, they are hurting out
there; on Navajo land, the social services, health services,
and public safety. So I don't believe what they're talking
about is any different.
So if we can go 638, not only this program, but other
Federal programs that are taken over by the tribe, they need to
be adequately funded.
Chairman Ney. Mr. Shirley, a quick question. I don't want
to take all the time for the questioning. I know we have other
panels, too. I want to ask you in general--for example, farm
service agencies are a big deal where I come from, and right
now they're consolidating those offices.
So in rural areas, which I have 16 counties. Ohio is 88, so
it's a large area. Those consolidations are very difficult for
our farmers, especially when you're talking about travel, your
ability to get there. We're not--we don't have a high rate of
computers where I'm from.
Having said that, I'm just thinking along the lines of the
BIA out here, and has there been increase in staff or service
of the BIA consolidation, decrease of staff? When you want to
deal with the BIA, I think you had said, Ms. Kitcheyan, that
you could travel and it would be done in 2 weeks, but if you
were dependent upon them being able to come here--
Any thoughts about the staffing levels, interaction,
outreach?
Mr. Fullmer. I would like to respond to that. Thank you
very much, Chairman Ney. On behalf of Yavapai-Apache Nation,
one of the things that we have is a--we're served under Truxton
Canyon Agency which falls under the Phoenix Area Agency, and
what we see is that for us it's been very difficult to get our
current TSR's in place, and so I think the difficult portion of
that is also with respect to getting new TSR's for the new
developments that we were able to go up and look at this
morning.
I think that's something that hinders us, as well, and I
agree with the panel that if that could be localized to the
tribe and the tribe could have control and authority over
leasing on its own lands, then we could really create better
master planning within our own communities because we would
know the timeframe that it would take to get these leases in
place so that they could be more effective.
The question you originally asked is have we seen an
increase in staff. Yavapai-Apache Nation, we have seen a
decrease in staffing and a decrease in outreach and services to
our Nation, and that's--with our development goals and plans
and our ambitions, it goes completely against our ability to
handle the current needs.
Chairman Ney. What is the staffing level you deal with in
your Nation? In other words, how many staff are--I wouldn't say
assigned to you--but to your region and how far away are they?
Mr. Fullmer. I believe that Truxton Canyon has one where
they used to have one and now has less than one staff.
Chairman Ney. Truxton Canyon is what?
Mr. Fullmer. Truxton Canyon is 3\1/2\ hours, 3 hours, in
Peach Springs, Arizona, and so that's a hindrance in and of
itself.
Mr. Renzi. They have a part-time now.
Chairman Ney. You have a part-time.
Mr. Fullmer. I believe so.
Ms. Kitcheyan. I would also like to add my comments to the
rest of the panel. Any time I experience on the San Carlos
Apache Reservation--any time we have a 638 program, we see a
decrease in funding, and it is across all programs. It is not
just for the land-use part of it.
But getting to the TSR's and the story that I told, you
know, the employee was hoping to expedite the process and get
this important information back to San Carlos, you know, is
only one, but there are many other times that this has
happened, and we have to go to Albuquerque in order to get
those documents signed and returned.
Other--you know, the other stories that my staff told me is
that it takes sometimes almost a year or 16 months to get those
TSR's signed, and if we have local control, which self-
determination and sovereignty is all about, we can take that
off the hands of the BIA and probably do a better job than
them.
Chairman Ney. Well, to sum up my questions, Mr. Chairman, I
know, President Shirley last time we saw you and you testified,
the same issue was out there about the length of time the title
was taking, and like I said, if I had to wait that long, I
wouldn't have a house, and I don't know how anybody can do
that. You can't hold rates.
And the fear I have--and I will say that the hearing was a
great thing to do and I think good things came of it. We have a
BIA Chairman here today, because we had a follow-up hearing in
Washington when I know the specific statements were made by the
BIA, and that would have been 6 months, and if I remember, July
17th last year--not that I'm so smart, the staff is smart. They
reminded me of that today on bipartisan basis.
So on July 17th, within 6 months, we would have--due to
computers, or whatever, this would be speeded up. So we'll hear
from them today, because I want to say in closing, the concern
I have, we have gone--this is our 64th or 65th hearing as a
subcommittee. We have passed 22 bills signed into law on a
bipartisan basis working with Mr. Oxley and Mr. Frank and
Maxine Waters and Mr. Renzi and other great members. We have
been able to really craft some things that are going to help
people.
Having said that, we have a GSE bill pending in the Senate,
some $5 billion, close to, that is out there for housing or
rental. What I fear, that the $5 billion sitting there, which a
great thing to do if we reformed Fannie Mae and Freddie Mac are
the regulators. We have the American Dream Downpayment. We have
all these programs that are never--they're not going to get to
you, all because of this one glitch.
So this--I'm starting to worry about it. I fear that
they're out there, but you're not going to be able to--because
of this glitch, be able to access them, and I wouldn't even
call it a glitch. It's a severe problem.
Mr. Renzi. Thank you, Mr. Chairman. I'm grateful.
I have a few questions, if you don't mind. George, thank
you so much for your thoughts. Your insight and experience is a
great thing. You said two things. First of all, you said that
the closer tie to the land gives your people the ability to
work harder--first of all, you're focusing just on your tribe,
your people specifically. It makes a big difference.
Mr. DuCharme. It does.
Mr. Renzi. Secondly, you're fighting for your own people.
You're fighting for your own blood. An army fights harder when
it is fighting on its own soil. I think that's what you are
doing.
When you look at what the BIA has to do--first of all,
they're underfunded. I voted against this budget 3 times. We
don't give them enough money. They don't have enough people. We
have good people in place now. They are much better than what
they had in the past. We have had a lot of show horses in the
past, and not enough work horses. The guys we have in place are
trying hard, but I still think they don't have enough money.
When you look at the eastern tribes, small hundred-acre
reservations with a casino, with 200 members, and then you look
at the western tribes, and they're all operated under the same
umbrella, same type of organizations, how do you think, with
your experience, it would affect my tribes, particularly out
west, who are much more land-based, land mass, much more of a
rural frontier population spread out, where Mr. Fullmer was
talking about how they have to go 3 hours, or Kathy's people
have to go all the way to Albuquerque. There is a detachment
you feel in the west.
I just think in the west it has to be--we have to look at
putting the offices on the reservations in Indian country in
the west because of the fact that we're so much more spread out
from a location standpoint. Can you see how it lends itself
more in the west? I'm not trying to make an argument in my
favor, but I am. What are your thoughts?
Mr. DuCharme. We are in the west.
Mr. Renzi. Right.
Mr. DuCharme. And it made sense to us to have the function
local.
Mr. Renzi. My point is BIA will have plenty to do and it
will stay in place with the title searches that they're doing
with the new computer system in Washington. They can do a great
job servicing a majority of tribes, but in the west with the
vast land mass and how spread out they are, it lends itself to
this type of situation.
Mr. DuCharme. Yes, it does.
Mr. Renzi. I answered my own question. When we went out
together and we looked at the new land that you have, some of
the old trust land you have, you have an issue where you asked
BIA for a title report that is almost 4 years old. I want you
to drill in on that issue.
Mr. Fullmer. We had submitted for an Indian tax credit
program funding, and as was brought up, we need these TSR's in
order for the lenders to be willing to fund on the
developments, and we asked for an updated TSR on our existing
old trust lands, and to this date, I don't believe that we have
those up-to-date TSR's.
This was asked for in 2002, and then again in 2003, and I
believe that some of the difficulty in that is that the break-
up of information is between--in our case between three
different Bureau departments. One in Truxton Canyon in Peach
Springs, Arizona, the other in Phoenix at the regional office--
area office, and as was brought up earlier by Chairwoman
Kitcheyan, the real estate information itself is held in
Albuquerque, New Mexico.
I think there's a fundamental flaw with respect to the
ability and availability of that information to be shared in a
timely fashion.
Now, with the current lands, we hope that--I know that the
staff worked hard, but I agree with you that was brought up.
They're just understaffed to provide what we need, and I agree
with the idea of localizing that within the tribe so that the
tribe can take control and handle it, but it has been a 4-year
process waiting for information that we assumed was already in
the archives, and these are ancient trust lands. They're not
new lands.
Mr. Renzi. I would request that my BIA friends who are
here, before we leave the reservation, get with Jamie--get that
one case history as it relates to a 4-year-old TSR that we're
waiting on the trust lands. If I could ask that, please.
Kathy, thank you for your testimony. I can remember going
out with you and being on San Carlos during the summer right
before monsoon season and seeing the homes and seeing some of
the conditions they were living in. I can remember those little
children in the home, 12 to 15 people moving out into the
hammocks during the summer season so it would be a better space
in the home, and I've seen the conditions and the tough
conditions that you are experiencing.
You talked to me about building 145 or 150 homes per year
for you to get caught up in 10 years. What specific program do
you think would be the number one program of the Federal
Government to help you get that done? Is it a lending program?
Is it something with Fannie Mae that we can do?
Ms. Kitcheyan. Congressman Renzi, with all due respect,
this is the way I'm going to answer it. Okay. Yes, we're doing
the Section 184. We're doing Key Bank. There is a
representative in the audience. But why should we have to go to
lending?
The U.S. Government, when they put my people on
reservations and confined them, and stripped away four more
pieces of land, and when they said they would take care of the
San Carlos Apache, why should they go to a lending program? If
the U.S. Government can send billions of dollars to foreign
countries, why should we talk about lending?
But because of the way the economy is today in the United
States, we are forced to go that route, and based on what took
place 2 years ago, we have made some improvements, but those
pictures that you see are still the way a lot of my people
live. I hope I answered your question, sir.
Mr. Renzi. Yeah, very powerful. Thank you.
President Shirley, I'm grateful. Two weeks ago your people
came back from Washington D.C., and BIA did a good job in
signing the legislation. You flew back there. I think that
allows for the first time business site leases to be approved
on the Navajo Nation.
Jamie and I were talking today. If I was a young Navajo and
I wanted to open a Denny's Restaurant in Window Rock, I could
now go to you, I could go to the Navajo Nation, and that whole
approval process for a business site leasing is contained
locally by my elected leaders. So they're responsible and they
have to answer to the young Navajo entrepreneur.
There is also in that language that was signed, a carve-out
that also allows you to do that for residential. We haven't
gone down that path.
Mr. Carl, I think you know the language I'm talking about.
Not only when the Federal law was signed--the Federal law
that says you had the ability to work with BIA while eventually
establishing your own business site leasing and you controlling
it, it says also for residential. The word ``residential'' was
slipped in the language, and we just found it the other day,
and I'm saying to myself, okay, what you did with business site
leasing, you already have the authority now to do--a
Presidential authority back under Bill Clinton to do for
residential.
I talked with one of your people--one of the ladies back in
Washington a couple of weeks ago about this idea. What do we
have to do, then, to take the authority that has already been
given you, and then allow you all to have the authority to do
your own approval process for residential?
You know the language I'm talking about?
Mr. Carl. Congressman, yes, I do, and Congressman Ney and
Congressman Renzi, as far as the steps--
Mr. Renzi. May I interrupt you. Could you repeat your name
for the record, please.
Mr. Carl. I'm Chester Carl, CEO of the Navajo Housing
Authority. Thank you very much. I think the system we are
discussing here allowed the authority to tribes to take the
initiative under self-determination, self-governance.
Consistent with all other programs, it is a long time coming.
What we require now is to demonstrate that as the
Confederated Salish and Kootenai Tribe has done, is take that
to the next level, the title status report, do to title plant
function, and one of the prime example, if I may, demonstrate
and display is the network system, the software system.
If the tribes can come out with the whole software system
which is not able to--not only able to assemble all of the land
data, but also all of the that information related to land-use
plan, infrastructure, even down to economic development
proposal, residential areas, and all of those--if that can be a
network system which would be successful where you don't have
to go all the way to Albuquerque, but which you can do it from,
for example, San Carlos or Tuba City Chapter, or whatever the
case may be, which is GPS driven, I think that's probably the
system we need to direct our attention to.
Mr. Renzi. Would it tie into the national system?
Mr. Carl. The GPS system?
Mr. Renzi. Yes, so you would have your own portable where
you would tie in on Navajo and go back to Washington.
Mr. Carl. It doesn't necessarily have to tie in. If there
is tribal control, it goes back to the Central Navajo Control
Office.
Mr. Renzi. Like you did down at--
Mr. Carl. Right. Navajo. For smaller tribes, it would be a
very similar system, and it could be tied--
Mr. Renzi. You would put it in the Chapter Houses.
Mr. Carl. Yes. It would be a network system. The TAAMS
project is one that has been promised to create a lot of the
flexibility, but it's demonstrated that it's not working real
well.
The other part of that is being--allowing similar access to
records as the counties do, States do. Those are public
records. In this case, the trust land records are restricted
records. So why that is, we don't know.
Mr. Renzi. What do you mean--restricted from what?
Mr. Carl. Restricted from access. The San Carlos was
provided--
Mr. Renzi. If a Navajo wants to see right now the title, he
can't see it.
Mr. Carl. We have to go through BIA personnel, and if we go
through the Albuquerque BIA title office, you have to go
through security clearance even just to get to the office. So
those are some of the scenarios we have to go through.
Mr. Renzi. Okay. Mr. Marchand, thank you for your testimony
and for coming all this way. I was impressed when you stated
that it takes one day to do a title search, one day, and you
were able to set that up also like Mr. Ney was asking of George
with a little bit of Federal assistance.
Mr. Marchand. Yes.
Mr. Renzi. And how many people run your operation now?
Mr. Marchand. Let me defer to Sharon.
Ms. Redthunder. Good morning. My name is Sharon Redthunder,
and I've been in the realty department for over 40 years. I've
been working since before there was a title plant, and so we
were successful in contracting titles and records because we
had staff on hand who knew how to achieve title.
We knew that--what all the records were locally. We
manually maintained our own records, so we were able to compact
and we were able to issue a title status report immediately. We
worked closely with our record--I mean, our Colville Tribal
Credit. We also are working with Key Bank on 184 loans.
We have two staff in the title and records department, and
what we've done is when there is a document that is recorded,
they issue updated title immediately. They don't record the
instrument and set it in a pile and later come back and do the
updating. It is done immediately.
So we're--as soon as we record a mortgage, they update that
title status immediately and come out with a new certified
title status report.
Mr. Renzi. Would you be willing to help train--if we get
this worked out where some of our sovereign Nations take over
their title searches, is their inter-tribal councils--do we do
training on the inter-tribal council level for--we could take
it up that way, and BIA would help train, but, also, if you
have Native Americans training Native Americans, we could
really share that knowledge.
Have you trained any other tribes? George, have you worked
with any other tribes?
Mr. Marchand. No. We have not.
Ms. Redthunder. Not in the title plant. I have trained in
other fields.
Mr. Renzi. Such as what?
Ms. Redthunder. I have been working in the trust field for
many years. I worked in California for a while. I've also been
working with the Bureau of Land Management in training on land
tenure in Indian country. So I have worked with various groups
in training.
Mr. Renzi. That would be great to cross-train. Our inter-
tribal council is very strong. We could do that. Thank you. Is
there anything else anyone on the panel or any of our friends
or witnesses would like to add that didn't get said? No?
Then I want to thank this first panel for coming and for
sharing your experience, and, hopefully, this will be the first
step to change. Thank you so much.
Our second panel consists of Orlando Cabrera, Assistant
Secretary of Public Housing and Indian Affairs, Department of
Housing and Urban Development; Edward Browning, Arizona Rural
Development State Director, Rural Housing Service, Department
of Agriculture; and Allen Anspach, Regional Director for the
Western Region, Bureau of Indian Affairs, Department of the
Interior.
Thank you so much. We'll go ahead and get going here on the
second panel, and I want to thank you all for coming this far.
We had--I think that first panel was very enthralling. A lot of
good stuff came out of it. I'm hopeful we can now, with some of
our experts here, begin to move, and with that, Orlando, thank
you for coming my friend, and also thank you for your hard
work. You've been different. You've been different than any
predecessor, in my opinion. I'm a man who doesn't respect
anyone until they've earned it, and I try to live the same way.
So, sir, I'm grateful for you to come today.
STATEMENT OF ORLANDO J. CABRERA, ASSISTANT SECRETARY, PUBLIC
HOUSING AND INDIAN AFFAIRS, DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT
Mr. Cabrera. Thank you. That was nice. I appreciate it.
Good afternoon, Chairman Renzi, which is unusual to say, and
Chairman Ney. My name is Orlando J. Cabrera, and I am HUD's
Assistant Secretary for Public and Indian Housing. As always,
it is a pleasure to appear before you again. I would like to
acknowledge and thank all of the elected tribal leaders present
today, and all of the Housing Authority leaders, as well. They
are critical to the housing mission in Indian country.
The purpose of this hearing is to explore barriers to
Native American homeownership, but before I speak about our
successes in confronting barriers to homeownership and the work
that needs to continue, I would like to take a moment to
explain our vision for homeownership in Indian country.
Our goal is to utilize BIA's Native American programs as
catalysts for economic development and to contribute to
sustainable economies within Native American communities. This
is possible by union homeownership and development of
affordable housing as a vehicle to attract other sources of
capital.
Today there are more ways to leverage Federal funds than
ever before. We encourage wherever possible that tribes work
beyond HUD's Indian Housing Block Grant and Title VI programs,
and pursue opportunities such as the low-income housing tax
credit and other Federal and State programs, as well as seek
partnerships with the private sector.
We believe HUD's success with those 184 loan guarantee
programs work with the BIA to streamline the title status
report process and its initiatives in the area of land
assignment law and tax exempt law, and tax exempt bond
financing, will help build sustainable economies and makes this
vision a reality.
Homeownership and the ability to build equity in one's home
is an important component in developing strong tribal
communities. HUD's Section 184 program has made a significant
contribution to the overall success of the Administration's
homeownership initiatives. The 184 program provides a Federal
guarantee to lenders for 100 percent of the principle and
interest on market rate loans to Native American homebuyers.
In fiscal year 2005, the number of loan guarantees
increased to 634 from 480 the prior year, representing $76.8
million in mortgage guarantees. So far in this fiscal year
2006, HUD has guaranteed 893 loans, and we expect this number
to grow.
But the system can be improved. We are still confronted
with some barriers such as title recordation and streamlining
the title process overall. We have been collaborating with the
BIA to help make the TSR process a faster, more usable, and
consistent product.
In 2004, HUD entered into an MOU with BIA, and USDA Rural
Development Board together with tribes in order to provide
housing development related assistance to Indian country. In
furtherance of the MOU objectives, the BIA released an interim
TSR processing policy on September 29, 2005. However, this
policy was not implemented universally by the BIA Regional
Offices, and part of the policy solution, that is to use a
title endorsement, fell short of generally-accepted standards
of title review.
Lenders continued to express concern about the length of
time it takes to process a TSR using the current process and
the cost implications to the borrower.
I met recently with Interior Associate Deputy Secretary Jim
Cason to determine if there was more that could be done with us
working together. At that meeting he re-stated the BIA's
commitment to streamline the TSR process. He and I agreed to a
plan that would resolve the current backlog of TSR requests.
As an outcome of this meeting, HUD drafted and submitted to
the BIA a new title endorsement document that addresses the
deficiencies in the previous title endorsement. It was a
mortgage new policy which I can go into further in a bit.
In addition, HUD has offered to collaborate with the BIA in
order to develop and facilitate a series of regional training
sessions for BIA personnel, and that would be done also in
conjunction with the Federal Reserve, stressing the importance
of speed and consistency of process and review.
The TSR process has room for improvement, and through our
partnership with the BIA, it is also evolving well. We look
forward to working with the Bureau to develop solutions to
improve efficiency wherever we can.
A major component of building sustainable communities is
having a viable secondary market for real estate. HUD and the
BIA are currently working collaboratively in another effort,
the Land Assignment Law Initiative, which is designed to
increase private sector involvement in the housing market on
reservations.
The tribe will be able to issue a land assignment to a
tribal member that is not subject to the 50-year statutory
limitation on encumbrance through the use of the land
assignment process. The Office of Native American Programs and
BIA have worked with the Mashantucket Pequot Tribe to establish
a model tribal land assignment law. The Interior Solicitor's
office has approved of the process and initiated an opinion
that individual assignment governed by tribal land assignment
law do not require BIA approval or recordation.
NAP will issue program guidance on land assignments for the
Section 184 program in the coming months, and we expect other
tribes to take advantage of this innovative process.
NAHASDA's Indian Housing Block Grant Program continues to
be the largest single source of housing capital in Indian
country. BIA's IHBG program which came online in the beginning
of fiscal year 1998, has now distributed over $5.7 billion in
funding to tribes for their TDHE's, but relying on IHBG funding
alone without leveraging those dollars, misses a significant
opportunity.
We continue to explore new ways to combine HUD resources
with those of other Federal agencies, the States and the
private sector. Additionally, HUD is exploring ways to use its
technical resources to provide educational and capacity
building opportunities to tribes interested in expanding their
housing development programs.
Finally, on behalf of Secretary Jackson, I want to thank
you, Chairman Renzi, for your work on homeless issues and for
introducing legislation that would consolidate HUD's three
primary homelessness grant programs. We are grateful for your
leadership on this issue and your commitment to helping chronic
homelessness. This concludes my prepared remarks. I would be
happy to answer any questions you might have.
Mr. Renzi. Thank you, sir, very, very much. I appreciate
your thoughts.
[The prepared statement of Mr. Cabrera can be found on page
99 of the appendix.]
Mr. Renzi. Mr. Browning, it is good to have you today, and
I appreciate your friendship and hard work. Mr. Browning.
STATEMENT OF EDWARD BROWNING, ARIZONA RURAL DEVELOPMENT STATE
DIRECTOR, RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE
Mr. Browning. Thank you. Chairman Ney and Congressman
Renzi, it is my pleasure to welcome you here to Camp Verde,
Arizona, for this important discussion on removing barriers to
homeownership for Native Americans. USDA Rural Development's
mission is to increase economic opportunity and improve the
quality of life in rural communities. Rural Development plays a
pivotal role in ensuring that rural Americans share in the
economic vitality of this country, including the dream of
homeownership. Nowhere is that dream more of a challenge than
here on our Native American lands.
Arizona has 21 recognized tribes, from tiny tribes with
little or no tribal land, to the Navajo Nation, the biggest
reservation in the country. The Navajo Nation spreads into
three States and covers over 27,000 square miles of reservation
land.
The President's Minority Homeownership Initiative has
helped us focus on this issue. We have worked to create
innovative ways to ensure that we keep the commitment to
maximize our impact. Homeownership rates on the reservations is
slightly more than 40 percent, as compared to the national
average of 68 percent. There are several barriers that
contribute to this.
One is the trust land issue, which has been well documented
on our first panel. The second issue is the low-income levels
with the per capita average income on our largest reservation
of $7,300 a year, being able to make regular mortgage payments
is a major stumbling block to homeownership.
A third issue is the remoteness which makes it difficult to
bring in services and materials and to reach the folks to tell
them about our programs. Outreach efforts are further
complicated because Native American clients often have to
navigate through many Federal, State, and tribal programs.
Rural Development has been taking some steps to overcome these
barriers.
For the past decade, we have targeted the Native American
communities for housing and other community business services.
Ten percent of Arizona's rural development staff is Native
American. Our office in St. Michaels on the Navajo Nation is
staffed by Navajo personnel who are culturally aware and speak
Navajo.
In 2005, despite the vastness of the Navajo Nation, our
staff made 61 outreach visits. That's more than one a week.
Louis Shirley, our rural development man in the St. Michaels
office, averages 40,000 miles a year in travel to do this
outreach. It should be noted that for my staff to reach the
Havasupai Tribe, we must either walk, ride a mule, or take a
helicopter ride to the bottom of the Grand Canyon.
Mr. Shirley not only made many of these outreach visits, he
also saw a need for a coordinated approach to serving the
Navajo Nation. He was the driving force behind the formation of
a partnership of funding entities in the community called,
``Saw Mill.'' The partnership was successful in combining funds
from Federal, State, local, and tribal governments and the
individual with the goal of reducing the cost of housing to the
prospective homeowner.
By combining funding from a variety of sources, Mr. Shirley
was both able to reduce the risk for any one agency and the
amount of the loan, thereby making the payments affordable and
breaking down the credit barrier. The plan is to replicate this
model for other potential homeowners.
Rural development has also taken care to help create
community facilities, infrastructure, and economic
opportunities for the Native American community. The real test
of our commitment to removing these barriers is how well have
we been able to do our job. In other words, have we created
clean, safe, affordable housing for Native Americans here in
Arizona?
Our record shows that we have, with over $14 million in
housing assistance for Arizona Native Americans, which includes
$2 million in single-family housing loans and repair grants,
$7,500 per family, $6.8 million to provide over 250 units of
affordable multiple-family housing.
Additionally, we have spent over $47 million in building
schools, hospitals, community centers, telecommunication,
broadband, and business development projects. In total, rural
development has provided over $62 million for Native American
projects in Arizona from 2001 through 2005.
Removing barriers for homeownership in Native American
communities presents unique challenges. Rural development has
partnered with other agencies and tribes to provide housing and
services. As a result, rural development has provided hundreds
of Native American families with clean, safe, affordable
housing.
One of the strengths of rural development is the power to
create individual strategies for success within the general
structure of the national agency. Abraham Lincoln called the
Department of Agriculture the ``People's Department.'' Rural
development is working hard to ensure that reaches even the
most remote pockets of our Native American populations.
I, too, will be glad to answer questions at the appropriate
moment. I would like to introduce the staff who are with me,
and acknowledge them in the hearing record. Lewis Shirley is
the man making all these travels. He is here with me today. I
also have my Native American coordinator, Don Irby, and my
Housing Program Director, Ernie Wetherbee.
[The prepared statement of Mr. Browning can be found on
page 106 of the appendix.]
Mr. Renzi. Thank you all for coming. Mr. Browning, I want
to thank you for your work, more so for the outreach that
you've shown in going out on Indian country. I'm grateful.
Mr. Anspach, it's good to have you with us today and I look
forward to your testimony.
STATEMENT OF ALLEN ANSPACH, REGIONAL DIRECTOR FOR THE WESTERN
REGION, BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
Mr. Anspach. Chairman Ney and Congressman Renzi, thank you
for the opportunity to represent the Bureau. My name is Allen
Anspach, and I am the Western Regional Director from the
Bureau's Phoenix office. I've held that position since May of
this year, and Bureau Director Risedale asked me to come forth
and represent the Bureau today.
I do have with me Arch Wells, who is our Acting Director of
Trust in Washington D.C. I believe the committee has made his
acquaintance previously. He has the overall national direction
of our program. I also have with me Stan Webb, who is our
realty officer at the Western Regional Office. Stan knows a lot
about the leasing processes, and I have Donna Paigler with me
who runs the Land Title and Records Office out of our
Albuquerque office. She has working knowledge on what we're
trying to accomplish. So I may ask them, depending on the
nature of the questions that come up, for some technical
assistance.
It is a pleasure to be here. I thank Jamie Fullmer, the
chairman, for his hospitality, and it's great to see all the
other elected officials from throughout our region and from
other regions. It shows the depth of the interest and concern
on the issues that we're faced with.
As far as background information, in general the Bureau of
Indian Affairs does play a critical role in removing obstacles
to building homes on the reservations. We have as a result been
working closely with the Department of Housing and Urban
Development and the USDA Rural Development folks to streamline
and expedite production of our title status reports.
I'll begin by providing some background information on the
current process and procedures that we use for doing title
status reports, and then comment on the process. As you
probably know, the Bureau has land title and record offices
located within eight of its regions. That's in Anchorage,
Alaska; Muskogee, Oklahoma; Aberdeen, South Dakota; Portland,
Oregon; Sacramento, California; Billings, Montana; Anadarko,
Oklahoma; and Albuquerque, New Mexico.
Each of these offices is responsible for recording all
title and encumbrance documents for Indian lands within their
respective regions and issuing the TSR's to provide records of
ownership.
The title status report is a compilation of the current
ownership, legal description and recorded liens and
encumbrances on the designated parcel of land. The production
of TSR's for mortgages is our LTRO office's top priority. We do
strongly support these programs to help housing on Indian
lands.
Now, the current procedure requires that all requests for
TSR's for mortgages first go to the agency superintendent at
the relevant BIA office, or through the regional director on
behalf of tribal members where allotted land is involved. The
certified title report is required by the lending institution
to verify that the loan applicant has acquired a leasehold
interest since they can't have full ownership unless it is
allotted land.
There are very few differences in the TSR process from
location to location. When there are, often these differences
are dictated by the particular lending institution or the
Federal agency providing the loan.
Over the years, we have found that some offices have
provided an uncertified title status report showing the
mortgage as an encumbrance to the property in lieu of the
certified report. On April 13, 2005, the BIA issued a directive
requiring that all land title and record offices provide
certified title status reports when requested by the agency
superintendent or a regional director.
BIA has qualified and dedicated personnel at our land title
and record offices that do examine the certified land titles
and produce TSR's. However, we are the sole source for Indian
trust land records. Because trust land records are to a degree
confidential, lending institutions and other Federal lenders
are completely dependent upon the Bureau for all certified
TSR's, thus creating a significant and important workload.
Since the inception of the Federal loan programs, the
mortgage request for certified titles have been a high priority
for the LTRO's. We have made significant changes in our title
program over the past 3 years aimed at improving our ability to
deliver accurate and timely title status reports.
One of the improvements to the BIA title system is a
recently-completed conversion to the Trust Asset and Accounting
Management System, affectionately called ``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. The quality of the data has been
significantly improving.
We're still doing comprehensive data clean-up which has
been coordinated with the deployment schedule for the TAAMS
leasing module. The leasing module is planned to be completed
by November of 2007.
The BIA process for providing title status reports upon
request within a 30-day timeframe for the regions has been
reasonably effective and efficient in the past, but will
improve substantially in the future. In August of 2006, the BIA
will begin implementation of the new TAAMS functional
component, the TAAMS Image Repository.
The objective of the repository is to store all documents
affecting and concerning titles to Indian trust and restricted
lands. In addition to deeds, probate orders, leases, easements,
and other title documents, the repository will also store TSR's
and will be the primary mechanism for delivery of TSR's. The
repository will also be the primary mechanism for submission of
title documents for recording at the LTRO.
With the completion of this clean-up and title data
maintained in an up-to-date status, TSR's will be processed
upon request and deliver electronically to the requesting
office immediately upon completion and certification. This
modernized process will reduce the time from TSR request to TSR
delivery from weeks and days, to hours and minutes. A
substantial improvement.
On September 29, 2005, the Director of the BIA issued an
interim policy on the certified TSR's. The policy requires
TSR's to be issued for each pending realty transaction that is
requested by the superintendent or regional director who has
jurisdiction over the lands within 30 days.
Mr. Renzi. Wrap it up, please.
Mr. Anspach. Okay. In summary, there are several steps that
we are taking to address the issues. They are not all resolved
at this time, but we look forward to assisting the committee in
reaching a resolution. Thank you.
[The prepared statement of Mr. Anspach can be found on page
116 of the appendix.]
Mr. Renzi. Thank you. We appreciate your testimony, the
whole panel. I appreciate you being here. Mr. Chairman, we open
it up to you for questions.
Chairman Ney. Thank you, Mr. Chairman. I wanted to make an
observation to HUD, and we appreciate your working with
Secretary Jackson and HUD on a lot of these issues, and we've
worked also with HUD on--and FEMA in cross reference between
the two on Katrina, and we actually--our subcommittee was the
first to have a hearing in New Orleans and also Gulf Port,
Mississippi.
One thing you might want to take a look at, and I'm not
saying you can comment on this today or solve it, but
manufactured housing--and I mentioned this because, yes, I know
in the disasters, FEMA controls manufactured housing. I'm fully
aware they make the orders, etc., but we've been finding, too,
when there was no certain amount of requests for manufactured
housing, we have manufactured housing sitting in Arkansas--
9,900 units are sitting there.
Now the U.S. Government is going to have to spend $7
million dollars on gravel because they're going to sink, and so
we've got them behind a fence. We recently have had a situation
where new manufactured housing which we were told at first
there was no new manufactured housing was going to go on sale
in Selma, Alabama, and it would have went probably for a song
on a public market.
We found out there was new manufactured housing, so they
stopped that part of it. I also understand that manufactured
housing, sometimes when it's been used, but there's maybe a
need for $2,000 worth of repair to it, it's then deemed to be
used manufacturing housing when it's relatively new.
Having said this, I just throw this out as food for thought
and I've talked to HUD about this. As we know, in different
parts of the United States, that this--these manufactured
housing units are sitting there, and if the manufacturers
produce these, which right now we're going to get an answer out
of FEMA of how much these go on sale for once they're new--in
other words, they could be purchased for $50,000 by the
Government, and then turned around and sold quite cheaper, and
that's the price we're trying to determine what they're sold
for. So they're bought normally for $50,000. The U.S.
Government buys them in bulk for $23,000, and maybe sometimes
they are sold for $9- or $10,000.
Having said all that, the point of what I'm trying to get
to is I think it behooves HUD and the Congress working with
FEMA to work down the road about some of these units that
aren't used and why couldn't they be used for housing in the
Indian Nation, and it could be such a reduced discount price
for a manufactured housing units.
I'm not talking about travel trailers. I'm talking about--
right down below my house we have 75 manufactured housing units
in a manufactured housing park. We used to call them trailer
courts, but these are--and I have nothing against trailer
courts. Where I come from, we have trailer courts and they're
accepted. But these are manufactured housing units. These are
pretty decent units. Some are two stories tall.
I was just wondering if you--has there ever been
exploration as to how we could acquire some of those units, buy
them in bulk, and offer them to Native Americans?
Mr. Cabrera. Mr. Chairman, as it happens, the answer--I can
give you the answer now.
Chairman Ney. We didn't plan this.
Mr. Cabrera. No. This is pretty funny. We are thinking very
similarly. I spoke to Director Paulson a week-and-a-half ago
about this issue. He went back and found out whether there
would be willingness of FEMA to do this, and the answer is yes.
That is the initial issue.
There are issues with doing it that have nothing to do with
the actual availability of the units, which I'll discuss with
you and your staff later on, but I didn't know about the units
in Selma until you just mentioned them, and the issue with the
used housing, as far as FEMA is concerned, has been up to now
that they've taken the housing and tried to reapportion
breaking up bulk.
Units that were in Florida after the storms in 2004, to
Katrina victims. So the real focus of our question was the
units that are in Hope, Arkansas, at the airport and trying to
figure out if we could--if those would be available stock for
those who might want them.
So my short answer is yes, we actually have plans to
acquire some of those.
Chairman Ney. Also, for beyond--with the Hope, Arkansas, my
frustration is that those units are sitting there. They could
be taken down to New Orleans. Because Gulf Port, Mississippi,
received 20,000 of the travel trailers, just got hooked up.
People were repairing their property. New Orleans only had
2,000-some, which is not your problem. This was a FEMA thing.
So I'm not saying we take the Hope, Arkansas units away if
people want them in New Orleans. New Orleans is a whole
different world of problems why we in part can't get those down
there, because there's been 50 million tons removed in debris.
There are 63 million more. There is a question of where it
could be put, toxic problems with the land, a whole set of
different issues.
But moving down the road past Katrina, because we want to
help those victims, obviously, first, if they want housing, but
down the road, if the U.S. Government can buy these and then
store them, walking past Katrina and any other disasters in
Florida or Mississippi, it does behoove us--and I'm glad you're
looking into exploring about the buying in bulk and the ability
to help people across the country, but in particular, the
Indian Nation.
Is there any way--I think we could continue to work on
together on that, and the price could be--buying in bulk by the
Government could be so reduced, to offer something that, you
know, maybe even a half of the original cost.
Mr. Cabrera. Well, all I know is there is a technical issue
that I would love to discuss with you later, but the other
issue is we want to make sure there is demand for this. Some
folks don't want to live in manufactured housing, and it's an
issue, and others do, and we want to make sure we have an idea
of what the demands would be.
Chairman Ney. I understand. I saw the traditional hogan,
the traditional Navajo housing that they had, and to some
people, you know, across the United States, manufactured
housing has been debatable, but for those who would want it,
and it would not have to be forced upon them, I think it's
worth exploring.
Mr. Chairman, the second question I had was for Mr.
Browning, just a brief answer. How can a mortgage lender
determine whether its mortgage lien will be valid and
enforceable under existing tribal law?
Mr. Browning. I'm going to defer to my Native American
housing coordinator.
Chairman Ney. First of all, state your name for the record.
Mr. Irby. I'm Don Irby. Chairman Ney, Chairman Renzi, the
situation under--would be based on any of the reservations. We
have to first get the legal documents, the leases, and have
them reviewed by our general counsel to see if it is something
that we can take a lien on, that it can be enforced.
One of the issues that we have run into on generally all of
the reservations, is that they want us to foreclose through
tribal court, and that has been an issue with our legal counsel
in regards to that, but they generally want us to either
foreclose through Federal court or have a Federal judge
foreclose through tribal court, and those are the primary
issues that we have had to deal with in regard to the trust
land.
Chairman Ney. Where would--has it been decided where the
legal jurisdiction would be; tribal court, Federal court, or is
that the issue?
Mr. Irby. That's the issue.
Chairman Ney. Have there been any court cases on that to
clarify, or do you know?
Mr. Irby. At the present time we're trying to--our counsel
for the Navajo Nation has advised us to try to solicit for an
attorney that will foreclose through Navajo Nation courts.
Chairman Ney. Thank you. Mr. Chairman, if you would indulge
me and thank you for your patience. My last question is for Mr.
Anspach. In the memorandum of understanding among the
Departments of Agriculture and HUD, and the BIA, dating from
September of 2004, the BIA committed to use its best efforts to
prepare a title status report within 30 days, and on July 17th,
which I mentioned earlier, 2004, Arizona field hearing and at
least last years Washington, D.C., hearing in July, the BIA
committed to having the automated system that BIA pulled in use
by 2006.
And, of course, it's 2006, and so I'm going to assume that
the system is up and running to meet the goals of preparing
faster TSR's, or did something happen?
Mr. Anspach. Mr. Chairman, if I may, I'm going to ask Arch
Wells, our technical person, to respond to that.
Mr. Wells. I won't say I'm technical, but, yes, the TAAMS
system, the one that Allen Anspach noted earlier, is in place
and it has made getting TSR's easier. The companion system to
it, which will make things even easier, is the repository, that
is hooked to that, and that is when you populate all the
LTRO's, and that should be in place the end of this year. We
just got the security clearances on it 2\1/2\ years ago, I
believe.
So that would give you actual documentation on not just
static data. It would actually allow you to view the documents
on hand just like in a county records system.
So if an individual owned property in Mississippi, and they
owned property in Arizona, you would be able to pull it up
electronically and see those things, rather than trying to
centralize the LTRO in Phoenix, for instance, because it's an
electronic system.
Chairman Ney. Did the reorganization have anything to do
with this, because there was the reorganization. There was BIA,
OST and HUD. HUD was involved with activities under the
housing. HUD, USDA, and BIA partnered. Wasn't there a
reorganization also that was taking place, and maybe it was
internal.
Mr. Wells. There was an internal reorganization of the
Bureau of Indian Affairs where we took the administrative
portion out of the functional portion on the ground portion,
but, no, that doesn't have anything to do with this.
Chairman Ney. Okay.
Mr. Wells. Quite frankly, one of the things that spurred
along the repository was last years testimony, so I appreciate
that.
Chairman Ney. Again, just to kind of get to the point, you
know, when we had the--and I appreciate the efforts, and I
think things just coasted for a lot of years, and Congressman
Renzi's referred to that earlier, and I think it coasted a lot
of years, and a lot of these problems were discovered and had
been out there and just had not been addressed, and Congressman
Renzi brought it to our attention, so I felt good in Washington
in July of last year and it was to take 6 months.
I think you might have indicated to the Congress that it
was going to take a little longer, but you say it's now
complete or you're in the final--I'm trying to narrow it down
again in a public hearing. When is this dog to going hunt, is
what I'm saying?
Mr. Wells. You're speaking my language.
Chairman Ney. And can catch the bird.
Mr. Wells. Catching the bird is the difficult part. The dog
is hunting right now. It is making it so that the customer and
an individual who comes into the LTRO, can see the
documentation, get the TSR, just like you could in a county
scenario or State scenario, and that's what we're attempting to
get done.
In that effort, to that end, we have now restricted TSR's
to just mortgages or land sales where there's more than two
owners. We're not doing TSR's for grazing permits, timber
sales, or a plethora of other things that we used to do TSR's
for, so we've shortened that down where TSR's are only done
where there's more than two owners.
We also have the endorsement in place, and recently we've
kicked out the new endorsement that was spoken about in the
testimony from Allen, and that's the one where we coordinated
with HUD and BIA, and it should facilitate the needs of both
HUD and BIA. So that one is out actually as of last week, so--
let's see. What else.
The other improvement was that we're now accepting all of
the environmental documentation of HUD. No longer do you have
to go back through this bureaucratic red tape of getting
another environmental document. We're now accepting each
other's environmental documentation.
Chairman Ney. So any projections in 3 months from now, or
in 4 months from now, how quickly will a person be able to go
in and get all the information they need to be able to pursue
their dream of a home?
Mr. Wells. A projection, prediction, right now we're
running on the standard case of 8 to 12 hours, and unless it's
a very complicated issue, I'm hoping that we can get all of
them to a 6- to 12-hour timeframe. That is getting all of the--
that's pending getting all of the data cleaned-up, all of the
documentation that we previously did not put into the LTRO that
we're now required to put in the LTRO's for leasing purposes,
getting that in, so that is the capital.
Chairman Ney. Thank you.
Mr. Renzi. Thank you. Tim, why don't you keep the
microphone. This is what I want. I--this is what I feel and
this is what I'm saying. First of all, you're a good man and a
hard worker.
Mr. Anspach. I appreciate your testimony. Okay. You're
under-funded. You're under-staffed. Congress hasn't given you
the money to do it, hasn't given you the ability to do your
job. You have a new system that you have invested how many
millions--straight up, how many millions of dollars?
Mr. Wells. I honestly don't have an accounting off the top
of my head.
Mr. Renzi. Between two Americans, how much?
Mr. Wells. Probably about $10 million.
Mr. Renzi. You have how many years invested in it?
Mr. Wells. The TAAMS, 12 or 15 years.
Mr. Renzi. I believe, and it was stated today--Mr. Anspach,
you said that you have a significant workload. I believe even
though you streamlined what now doesn't go in to the TAAMS
system, you still have a significant workload. I believe that
the western tribes have a unique situation in having the
ability to have their title searches done. They're all spread
out.
I don't want my tribes, when they come to you to go 638, to
have to run up against any kind of impediments that stop them
from being able to negotiate the 638 contracts. I want them out
of the system.
I think it's better that I get my tribes out so you can
have less of a workload because we're not giving you enough
money to do a good job of getting it done. So when Jamie
Fullmer comes to Washington, D.C., to negotiate 638, I want it
to be streamlined. I want him--one of the best young leaders in
the valley who understands housing, who just got 1,600 acres
into trust--roughly 1,600 acres, I want him to be able to get
it. Okay? It will help receive the system. It will.
Now, we know the system is going to move along and is
getting better and we have people who are working on it. When
we look at setting up and going through negotiations, who do
they negotiate the 638 with? Will it be you, Arch, or who?
Mr. Anspach. Mr. Chairman, they will start at the local
agency level down in Phoenix, and work up to the region. Since
this is a title office issue, we don't have a title office in
the western region. It's under the Albuquerque BIA office, so
they would have to contact them.
The problem--one of the issues is going to be that Mr.
Fullmer, using him as an example, will have some of the same
issues that you just brought up as far as the funding
available. If the BIA program is already struggling with staff
and funding issues, as we fractionate and divide amongst our
tribes, that's just going to be exacerbated unless more funding
can somehow be brought in.
Mr. Renzi. I want to come up with the funding for them. I
want to be careful here. You're still going to have a core
group. You're going to have plenty of work, but as far as the
Navajo, Yavapai-Apache, and San Carlos Apache goes, I have to
come through with the money and start-up costs to get it up and
running. You guys have to come through with helping me on how
we best train, whether it's inter-tribal council or BIA
personnel. It lends itself out west.
Now, how we work back east and how the other tribes have to
do it, it's on their own, but we can't do it anymore. You
can't--look, you can't be a young Navajo or an Apache,
wanting--getting married and wanting your own home, and wait 2
years. You can't do it. You can't do it. It kills you.
We're getting the reports out of Apache Dawn, which we're
going to hear some testimony on, about what's coming out of
that community. These young Apaches are going in to have their
own private homeownership. Their math scores are going up.
Their English scores are going up. We're seeing a reduction in
battered and abused women because they own their own home. A
sense of community.
So we've got to move, and we've got to get it done, and
we've got the ability now for the Federal Government not to act
as the sole arbitrator over entrepreneurship and prosperity and
homeownership in the community. That's one more way to say to
tribes, ``You've got it. Here's how we do it. Here is a system
that works. We're here for you, but you guys have to do it.''
It needs to be in many other areas, too, but this is how I
want it. I know, Arch, we talked. We have to go this way. Okay.
Go ahead, sir. You feel like you want to say something. You
want to finish my speech. Go ahead.
Mr. Anspach. Not at all, Congressman. You're doing quite
well. I don't think you would hear any argument from the
Bureau. We want it to succeed. We want the tribes to succeed,
but our job is to give them the tools so that they can.
Mr. Renzi. Well, those tools include--those tools, in my
opinion, right now, and I know these leaders that were in front
of you want 638. We're going to go there. You continue to go on
TAAMS. I'm not go to rip you on it. I know what you have
invested in it. I do not want the Washington bureaucrats under
you, Arch. I want them to be able to get 638.
Orlando, when you look at the amount of money that we have
that relates to loan guarantees under our Section 184, if a
Native American is living off of the reservation in
Minneapolis, or in Hollywood, Florida, you know the scenario,
they go into the program and they gain--they can take those
funds if you can guarantee their houses off of the reservation.
Right?
Mr. Cabrera. Absolutely.
Mr. Renzi. But that house collateralized and that house has
the underlying land which has the appreciated value. Why is it
that you're having to use 184 houses off the reservation?
Doesn't it draw down from the pot that I have to use on the
reservation?
Mr. Cabrera. No. Section 184 is a tool to improve the
liquidity of the mortgages. If you can think about--the issue
in real estate lending and the lenders who will come after this
panel will, I hope, reflect what I'm about to say, that the
whole market is driven by the concept of liquidity, the ability
to sell a mortgage in the market such that the buyer and the
seller are comfortable with what's known about that mortgage,
either in terms of the credit worthiness of the person who is
borrowing, the nature of the real estate, any number of
factors.
One of those factors is the ability to guarantee that the
title that is securing the mortgage, is capturable by the bank
in the event that something goes sideways.
Mr. Renzi. Right.
Mr. Cabrera. 184 says, ``Bank, you don't need to worry
about that because we're offering a 100-percent guarantee of
that mortgage such that you don't have a liquidity concern. You
can take this risk and not be concerned that if this goes
sideways you're going to be out of the money.''
Mr. Renzi. I'm with you on that, but if I'm off the
reservation, aren't there other instruments that would be
better used because the 184 really was meant to be on the
reservation for the absolute guarantee. See, I'm on the
reservation and that land is held in trust, so, therefore,
there's no--I have no interest in the land. I only have it in
the actual building, itself, which depreciates, actually.
So what I'm saying is, by using the Section 184 off the
reservation, I have less funds available for on the
reservation.
Mr. Cabrera. No, because Section 184 doesn't attach to the
issue of the dirt. That would assume that the dirt is somehow
what you're trying to protect. You're not. You're trying to
protect the financial instrument of the note and the mortgage
that are together. So it has nothing to do with where the dirt
is.
If you were to restrict that program to only tribal lands,
as it was at one point, what you will do is limit the ability
to use it and put fewer homeowners in homes.
Mr. Renzi. I want to look at that. Am I drawing down on the
possibility of it?
Mr. Cabrera. No, because the way that Congress or that you
have appropriated this, is the amount of money that guarantees
the maximum amount of credit. So, therefore, what you are doing
is you are insuring--you're insuring within a bandwidth that
the credit market is comfortable with, a default rate, and so
you're saying here is what we're doing and you can now leverage
that money.
Actually, assuming that the President's proposal were
taken, you would be able to leverage it to $250 million, and so
what you're saying is we're good with issuing mortgages up to
that amount.
Mr. Renzi. Right. That was a good point. You remember we
weren't using that whole pot of money. Do you remember
rescinding about $40 million?
Mr. Cabrera. Not under 184. I don't believe that you've had
a rescission in that.
Mr. Renzi. We had this discussion.
Mr. Cabrera. It was a combination of 184 and Title VI that
you rescinded, and I think a few years back you rescinded about
$80 million, but that was because at that point in time there
was no--and if you could forgive the term--quantum mass in the
program. Back then you had far fewer loans being underwritten
than you do right now.
Currently, what we've got are 835 loans being underwritten
in this fiscal year. The volume has skyrocketed.
Mr. Renzi. So there will be no more--Congress allocated
money. The money wasn't used, but you've been able to change
that under your watch, and I appreciate it. There's such an
increase now in applications, increase in counseling, in going
out and showing our Native Americans how to access the program,
and that's why we don't turn back money?
Mr. Cabrera. Well, I think there are several reasons. Those
are two, and to add, I think part of it is marketing, and what
I truly think is if you have a lending community that is more
comfortable knowing that you have title that they can rely
upon, they're much more willing to lend to the markets.
Whereas if you have a lending community that is uncertain
of the titles or that title is stagnant or that title is
questionable, they're not going to be very willing to lend at
all.
Mr. Renzi. How do I reach the same level of comfort when I
deal with financing in infrastructure?
Mr. Cabrera. Because in infrastructure you're applying--
Mr. Renzi. How do I?
Mr. Cabrera. I know. I'm sorry. An infrastructure is a very
different world. You're not dealing with liquidity issues.
You're dealing with basically the underwriting of a particular
project. If you can think about it in another way, it's what is
the economic viability of whatever it is I'm going to be doing,
be it water and sewer capacity, be it roads, whatever, and so
when you look at something like infrastructure, that is
typically a larger ticket in the marketplace, and that gets
underwritten much more strictly, and much more intensely than
homes do.
Homes at this point are for all intents and purposes the
biggest investment in the United States, not in terms of people
buying them; in terms of everybody investing in the mortgage
markets and the mortgage-backed security market. So it's a
different equation.
How do you do it? It's very hard to do. A lot of that is
basically faith in the financial markets, that whatever the
deal that you're doing makes sense. That means getting
investment bankers to agree with you.
Mr. Renzi. So I get the lending community to come in and
believe in a project. Jamie is getting ready to build 50 homes.
He has to extend the electricity, the sewer, the water, and the
gas. They lend based on the fact that the tribe has to stand up
and provide the collateral, maybe non-traditional collateral.
Do you, Jamie, have to put up a financial bond? Jamie, how
did you get your guys to lend not to infrastructure?
Mr. Fullmer. The infrastructure that the Yavapai-Apache
Nation has done, we've done with direct loans to the bank, but
that's based on our good standing credit.
Mr. Renzi. So you have to go to the lender and you secure
your own revenues--or the Nation has to stand as the collateral
versus the project.
Mr. Fullmer. That's correct.
Mr. Renzi. So if I have a tribe that doesn't have liquidity
or isn't in a position that you guys are in now, they're at a
total disadvantage.
Mr. Cabrera. Could I answer your question another way?
Mr. Renzi. Go ahead.
Mr. Cabrera. The Title VI--I'm going to rephrase your
question.
Mr. Renzi. Okay.
Mr. Cabrera. How do you sell the Title VI program in a
better way; is that a fair rephrasing?
Mr. Renzi. Yes, sir.
Mr. Cabrera. The way that we typically do it when we speak
to the stakeholder community is to say the following: You have
a 95-percent guarantee in terms of the debt that you
underwrite, and so, therefore, your risk is very small. It is
more worthwhile for you to undertake the program and do
whatever you're going to do, because you have--you have a
guarantee of the Federal Government behind your risk that is
going to decrease the amount--the cost of the money that you
will have to borrow, and so, therefore, please, please, please,
please, please, please, please, please go do it.
Mr. Renzi. So that is what is said to the lender, the
Federal Government would stand in and be your guarantor up to
95 percent.
Mr. Cabrera. Right.
Mr. Renzi. And those funds are also being accessed and
we're not--do you try to back those funds?
Mr. Cabrera. Yeah. It's being utilized, and I can't--right
now I'm having a brain block, and I can't remember the exact
figures, but it's truly come a long way from where it was.
Mr. Renzi. What is the impediment to the Title VI money?
Mr. Cabrera. The biggest impediment to the Title VI money
is faith within the stakeholder community in terms of using it.
The actual ability to get the money out there is not a problem,
but people don't like debt as a general rule, and when they see
that, they get worried about repaying that debt.
So what we've tried to do is promote the idea that this is
guaranteed money that accomplishes--it is essentially two
things--three things. It gets you the money you need for
infrastructure; it puts minimum risk in your pocket; and,
finally, and most importantly, it is the least cost money. It
is the cheapest money because the Federal Government is backing
it.
Mr. Renzi. Thank you. I'm grateful. We'll get there.
Ed, thank you for coming out. You guys do a great job out
there. Jamie talked about the fact that the services had been
reduced on many of the reservation lands, talking about the
fact that there was a part-time office, not your office, but
some of the other offices.
You have been able to maintain staff and you have been able
to grow through outreach. Your model, I think, acts as a model
for counseling, and for technical assistance, and has been
phenomenal.
Not all the same--not all of your peer agencies have been
able to keep that up. How have you been able to do it? Is the
funding in place to do it for you, or are you using it out of
your hide, or where is it coming from?
Mr. Browning. Well, thank you for the compliment. Our
funding has been fairly stable for the salaries and our S and E
budgets and expenses. We just fought long and hard. There is a
lot of need out here and we within rural development we have
done a little bit of negotiating with our counterparts across
the country. There are some States, we think, who had more
FTE's than other States, and so we quite frankly went in and
had our blood bath and determined whether there was a
methodology that redistributes some of the distributed FTE's.
We started down that path, which got me a few more FTP's. So
we've been fortunate that way.
Our big slices and dices came actually before I got here in
1993 when they split up the agencies, and there's been--this is
my opinion, is that it used to be--you know, I hear the stories
of the old timers talking about the work that was being done,
that they had eight or nine people to do this work.
Well, in my opinion, from the private sector at that time
looking at it, I probably thought that was way too many. Well,
the pendulum kind of swung back the other way where all of a
sudden we've got three or four people trying to do the work
that eight or nine people used to do; that's really not enough.
So we're trying to get that pendulum--we're trying to get
somewhere in the middle, and that would allow us to move
forward.
There has been a lot of talk here today, and I want to add
this to it. As we listen to our tribal reps talk this morning,
they talked about two really major issues, and they talked
about the trust land and we've talked about that a lot today.
The other thing they talked about was the income and economic
development, and I just think if we're going to talk about
housing, we're going to talk about infrastructure, we have got
to find methodologies to help raise the income of the tribal
people on all the reservations.
The Yavapai-Apache Tribe has done a wonderful job. What a
great tour we had this morning. If you look at some of the
things that went on there, their tribal members have had pretty
decent jobs over the years. That's not to say there is not some
poverty here. I don't know the tribe quite well enough to say
that, but when you're looking at other tribes where you're
talking about $7,300 a year, we have to find a way to bring
that level up.
I want to share one story with you. On the Navajo Nation, a
couple of years ago, we got a request for a grant to do a
feasibility study for a ram exchange. I thought, what is a ram
exchange? Well, we're talking about sheep and upgrading their
sheep facilities, and so over some time, we upgraded the rams,
and helped them build a facility, and when I went for the grand
opening of the facility and the pickups started rolling in and
people had their wool in the back, and as they told the
stories, they said that they used to take their wool to the
trading post, and when they did that, they got 8 cents a pound.
Because now they're working together and they have sort of
a mini co-op, and the Navajo Nation brought a semi and they
loaded all of the wool together with like 100 different growers
and shipped it to, I believe, Roswell, New Mexico, where they
got 85 cents. I thought my goodness, what a difference.
Those are the kinds of stories that we want to continue to
work with, and I really believe that entrepreneurship is
something that our agency has a chance to help with, and so
down the road when you're looking at bills, there will be an
opportunity to say that we need to support some of this
business development stuff that some of the different agencies
are doing. To me, that is a huge key to success.
If we solved all of the trust land issues tomorrow, and we
could do titles just like that, how many more houses would be
built? I don't know. They would jump for a little while, but if
credit and low income is a real issue, we have to solve that
problem at the same time.
Mr. Renzi. That is the exact argument I had, is if you look
at how you absolutely have to build equity, how do Native
Americans become millionaires on their own reservation? The
first thing is, if we can get them from not leaving so they're
spending their own money on the reservation, rather than it
being in a sink hole and having to leave.
Right now, if you're Apache, you want to go down in
Cottonwood and build a house, own equity, and borrow against
the equity, and then you want to come on the reservation and
build your own business, because that's the only way right now
to have any kind of equity and have any kind of real true
income, would be to own your own business.
So business site leasing, along with the residential site
leasing, and providing and letting the tribe have that
authority themselves, is a way to unlock that entrepreneurial
spirit and unlock equity.
Mr. Browning. I think the program and the processes they're
starting to do with certified Chapters and being able to go
back to local control, I think that opens some doors that we've
never seen for a long time, just to allow that. I think you
used the example, if somebody wants to put in a Denny's, it's
been very difficult in the past. That will allow
entrepreneurship to development and to grow.
And I think, you know, which comes first, the chicken or
the egg. Well, we've got a start, and that is a great start,
and I applaud the Nation for being able to move forward on
that. I think it opens some opportunities for us at rural
development.
Mr. Renzi. Thank you, very much. I thank this panel very,
very much. Mr. Chairman.
Chairman Ney. Indulge me just for a second. An issue got
raised. I just wanted to ask Mr. Cabrera. Be candid. The 184
program; aren't the numbers successful because the money is
being lent to people off the reservation and that makes the
program more successful? I mean, Congressman Renzi asked the
question a couple of times. Did it take away--and I understand
the point of his question. Doesn't it take away from the money
if you're lending to people off the reservation, and you said
no, it doesn't hurt the overall money, but the numbers will
look better for the--for that program if it is being lent off
the reservation because it's easier to lend it off the
reservation.
Doesn't that make the numbers look better when it comes to
the money being lent on the reservation where the numbers may
not be as healthy?
Mr. Cabrera. I think it depends on where we are, because I
think in Arizona, most of the money is being lent on
reservation lands or on allotted lands, but in other places, I
know for a fact--in south Florida is a great example. Most of
that is in the Hollywood area, and that's because the
Miccosukee. They have their lands smack dab in the middle of
Broward County's developed area.
My short answer is that I don't know, but my sense--my
instinct is to say probably not. I think it's a matter of
policy. It's a better thing to have more homeowners who are
Native American, than not, and I worry much less about where
the land is, and I worry much more about Native Americans
having their own homes, and so that's really where our focus
is.
And, by the way, if I may be indulged, I was terribly
remiss and I didn't introduce my Deputy Secretary, Roger Boyd,
who is behind me, and has also helped out.
Mr. Renzi. Thank you.
Chairman Ney. My final--if I could, we were with the
chairman today. I believe that this tribe has taken a balanced
approach. We saw an ingenious--the water treatment plant is
portable. It can be moved, if they have to, as they're building
more and more housing. I see a balanced approach. They're
cleaning off some land, according to the chairman, for housing,
and also putting in the progressive look, the idea of the
business part of it. I can't remember what you called that,
chairman, but the--it was a strip-- that is going to be a
retail strip, which it was the way to think, because you're
approaching it at two angles, but what I gathered from the
chairman today, and I believe also from Congressman Renzi, it
is also the importance of housing component.
And, Mr. Browning, I think you hit to the point of it,
because it is kind of a Catch-22. Developing the business side
of this is important for the jobs. For example, down in New
Orleans when we went down there, Congresswoman Maxine Waters
and I stopped at a restaurant and we asked them how things were
going, and they said, ``We could hire 175 more people right
now; we need them to open the remaining three restaurants,''
and we said, ``Why don't you do it,'' and they said, ``Because
there's no place for them to live.''
So when you look at the situation, yes, developing that
business site is important so people can go up the economic
ladder. The only problem is--and this is why I see it as a
Catch-22. If we don't develop the housing side, one of the
problems out here is--in Ohio, for example, in certain parts of
Ohio you can get a 4,600 square foot home for $279,000 on an
acre of ground. I'm using real examples. A 1958 home on an acre
of ground, three bedrooms, for $61,000.
Now, we've lost manufacturing jobs, steel jobs. China is
just taking us apart. Our jobs are lost and our people are
hurting, and I'm not saying they aren't, but part of the
problem I think you have out here is the price. I mean, you've
got poor people, but the prices are--I mean, who could live in
certain areas here because of the price.
So the economic side, yes, it is important, but if we don't
move aggressively, which is what the chairman wants to do, and
I know President Shirley and others want to do, if we don't
move aggressively to take away the barriers to get these
titles, then the economic side may come fourth, and that's
great to be able to provide those jobs, but people in the
Indian Nation aren't going to be able to afford--they will have
to live 40 miles away to drive here, and that barrier is still
a huge chicken-egg Catch-22.
So I agree with the twofold approach, but, boy, if we don't
get aggressive, which we--the Congressman has and others, to
get that barrier away from this title situation, then I'm
afraid that the affordable housing end of it will be something
beyond their reach.
Mr. Renzi. I want to thank this panel--
Mr. Cabrera. Mr. Chairman, if I might, I want to answer for
Chairman Ney. Roger has just provided it. If we were to take
out Oklahoma and we were to take out Alaska, Oklahoma because
it's Indian land that is in trust, Alaska because it's
corporation lands, so those numbers would actually inflate the
number I will give you.
Fifty-two percent of lower 48 on trust lands--sorry--the
184 program is insuring mortgages. Fifty-two percent of the
mortgages insured are on trust land in the lower 48. So, again,
assuming that you were to include Oklahoma and include the
Alaskan incorporation, that number would necessarily go up.
So my answer is, I think, that they're pretty solid numbers
either way.
Mr. Renzi. Thank you. I want to thank this panel for your
expertise and for traveling. I do want to say to you that I
will be requesting in about 6 to 7 months another hearing on
this issue and on other issues that are acting as impediments
to homeownership. I will be asking for it in Washington. After
that, 6 or 7 months, I will be asking Chairwoman Kitcheyan to
host the next one down in San Carlos. After that, I will be
asking for another hearing in Washington, D.C., a true pain, I
know, but I look forward to drilling in on this issue. Thank
you so much for coming.
We will go to our third panel. We'll take a 5-minute break
and come back with the third panel.
[Recess]
Mr. Renzi. Thank you so much for staying here with us. We
move into our final round and I'm grateful. Panel three
consists of Steven Barbier, with Consultant III, Neighborhood
Reinvestment Corporation doing business as Neighborworks
America; Chester Carl, CEO, Navajo Housing Authority; Pattye
Green, senior business manager, Federal National Mortgage
Association; Edward D. Hellewell, senior vice president and
senior underwriting counsel, Stewart Title Guaranty Company;
Marty Shuravloff, chairman, National American Indian Housing
Council; and Tim Simons, assistant vice president, Federal Home
Loan Bank of San Francisco, and my friend, Larry Parks, is also
here, and he is also with the Federal Home Loan Bank of San
Francisco. They've done wonderful stuff in Indian country which
I look forward to hearing about today.
This is the part of the panel that has to do with industry.
We've heard from our Native leaders. We've heard from the
people in Washington and the people who deal with it with the
Federal agencies. Now we are going to hear from industry who
really plays a vital role in making sure the funding and
breaking through all the bureaucracy.
So I look forward to that and, Steven, we'll start with
you. Go ahead.
STATEMENT OF STEVEN BARBIER, MANAGEMENT CONSULTANT III,
NEIGHBORHOOD REINVESTMENT CORPORATION DOING BUSINESS AS
NEIGHBORWORKS AMERICA
Mr. Barbier. Good afternoon, Congressman Renzi, and
Chairman Ney. My thanks to the Yavapai-Apache Nation for
hosting this hearing. My name is Steve Barbier, and I am a
management consultant with Neighborhood Reinvestment
Corporation which is doing business as NeighborWorks America.
I am here today to testify on behalf of NeighborWorks
America with respect to our work on Native American issues. I
will also discuss the strategies Neighborhood Reinvestment
Corporation deploys to tackle homeownership barriers in Native
American communities, including our role in launching a tribal
land title and recordation office study.
NeighborWorks America evolved from a 1972 effort by the
Federal Home Loan Bank to increase thrift-industry lending in
declining neighborhoods. NeighborWorks America, a public non-
profit corporation, was chartered by Congress in the Housing
and Community Development Amendments of 1978. NeighborWorks
America's involvement with local housing and community
development organizations, supports residents, businesses, and
local governments in their efforts to revitalize their
communities.
For nearly 30 years, the NeighborWorks System, which
includes 240 community-based non-profit organizations active in
more than 4,400 communities, has proven to be an increasingly
effective and efficient vehicle for leveraging significant
private-sector resources in support of community revitalization
and affordable-housing efforts.
I'd like to thank the committee for its support of
NeighborWorks America. For more information on NeighborWorks
America, please refer to the written testimony.
I would like to now speak about our efforts with Native
Americans. By December 2008, 500 Native American community
development practitioners will have attended the Wells Fargo
Native Community Development Training Program at the
NeighborWorks Training Institution, taking classes developed
specifically for Native communities, with subject areas of
homebuyer education, financial fitness, organizational
development, leveraging resources, and affordable housing
development.
We currently have a number of NeighborWorks organizations
that have developed partnerships with tribes to promote
homeownership. We began in 1995, when the reinvestment
corporation was invited by the Navajo Nation to assist in the
creation of a non-profit organization that could focus on
mortgage-based homeownership opportunities to Navajo families.
With the assistance and support of their many partners,
including the Navajo Housing Authority, the Navajo Partnership
for Housing has assisted 225 Navajo families into homeownership
for a total investment of $20.6 million. The unfortunate news
is that it should have been many more.
According to NPH, the average time from the day a Navajo
family walks in the door and applies for homeownership
assistance, to the date of loan closing, is still about 24
months. In addition to that timeframe, it takes an additional 6
to 8 months to receive the final TSR showing recording of the
lien with the BIA.
NPH reports that there have been some improvements at the
title plant level and that the large part of those delays rest
at the agency level.
Mr. Chairman, I would like to commend you and the
subcommittee for focusing on the important issue of expediting
TSR's for Indian land. As you know, the ability to obtain clear
title to secure financing for homeownership and economic
development projects is essential in today's financial
marketplace.
NeighborWorks America and many other entities including
tribal governments, lenders, Federal and State agencies, and
other local and national intermediaries have been committed for
many years, along with the members of this committee, to
improving homeownership and economic development opportunities
in Native communities. We have dedicated time and resources to
improving homebuyer readiness, designing innovative mortgage
loan products, identifying sources of down-payment and closing
cost assistance, and developing affordable housing stock.
Mr. Chairman, based on our experience working with Native
communities, NeighborWorks America and many of our partners
have identified the need to expedite the TSR process as a
priority issue. Accordingly, we have set aside seed money to
initiate a more comprehensive analysis of the options and
considerations for tribes that wish to assume their own title
functions, rather than rely exclusively on the BIA. Last month,
we convened a group comprised of Indian land and financing
experts at the Pueblo of Santa Ana, just north of Albuquerque,
New Mexico, to determine how we can assist in this area.
During the 2-day meeting, we consulted with representatives
from tribal government who have already undertaken some of
these steps, and we discussed what information might be helpful
to compile and disseminate more broadly to tribal governments.
One of the outcomes of this meeting was to launch a tribal
land title and recordation office study. We are pleased that
the National Congress of American Indians and First Nations
Development Institute have agreed to co-direct the study, and
they are in the process of developing their research strategy
now. The purpose of the study is to provide tribes with a range
of options to expedite land title processing that would
strengthen sovereignty and promote economic development. It
will examine the economics of managing LTRO functions and
address operational issues such as cost feasibility, necessary
administrative and staffing capacity, and technology
requirements.
We are anticipating that the preliminary results will be
available over the next 6 to 12 months, and we would be happy
to share our findings along the way in order to contribute to
the legislative process where appropriate.
The efforts underway with the memo of understanding between
the BIA, HUD, and USDA to streamline the mortgage lending
process on Indian trust land is commendable. However, this is
only part of the solution. NeighborWorks America and our
partners on the LTRO study committee urge Congress to enhance
tribal governments' authority to manage all or a portion of
their own tribal land title functions and to provide adequate
resources for tribes to be able to assume these functions from
the BIA.
Mr. Chairman, this committee has aggressively pursued
actions to improve affordable housing opportunities for all
Americans. We hope that you will continue to tackle this issue
of improving the TSR process on Indian trust land which will go
a long way to furthering homeownership and other economic
development opportunities for Native Americans.
We appreciate the opportunity to testify in this important
topic, and I would be happy to answer any questions you may
have.
Mr. Renzi. Thank you, Mr. Barbier. Great job.
[The prepared statement of Mr. Barbier can be found on page
119 of the appendix.]
Mr. Renzi. Mr. Chester Carl.
STATEMENT OF CHESTER CARL, CEO, NAVAJO HOUSING AUTHORITY
Mr. Carl. Good afternoon, Mr. Chairman, and thank you for
the opportunity to testify before this committee. You have
assembled a distinguished group of witnesses, and they have
done well. I would personally like to thank you, Chairman Ney
and Ranking Member Frank, as well as my good friend,
Congressman Renzi, not only for this hearing, but also for your
continuing efforts to behalf of Native families.
The elaborate, complicated and confusing system under which
we operate on trust land is the result of centuries of
different policies, some well-intentioned, some designed to
``integrate'' Indian people and others that were meant to
destroy our way of life.
The fact that this committee continues to hold hearings,
that you and your staff continue to ask questions, and more
importantly demand answers, is a testament to your desire to
make real changes, and I both applaud and thank you for that.
This also is a true motivation; I believe it's working very
well. In the last two hearings we talked about the challenges
we faced. Today we have heard further testimony about the
barriers to homeownership. Some of these barriers are real and
they're not the first barriers we have to overcome.
For years we were told that private lending on our
reservation land was impossible because of the trust status of
the land, that it cannot be alienated and, therefore, it has no
value. But I believe the original Native American Housing
Assistance Self-determination Act, which changed the length of
lease on trust land from 25 to 50 years, made that important
step.
It was also argued at the time that at a 50-year lease
would be make Indian country more appealing to lenders because
the leasehold interest would have value even at the very end of
the 30-year mortgage, but like so many other improvements and
changes in law, this change did not cause a stampede of lenders
to Indian country. The fact is that we at the Navajo Housing
Authority are still now forced to carry a lot of the mortgage
to make this reality come true.
I think we also provided information here at this hearing
that the community land use plan, because that authority
invested about $5 million in NAHASDA funds, is now starting to
work with local empowerment, and also some of the information
that I believe Chairman Fullmer provided was a testament to
some of the progress we've made with NAHASDA, and those
opportunities, I believe, are working, not only locally here
with the State of Arizona, but one of those opportunities is
with the tribal CFI funds that we now start to implement which
will provide infrastructure lending to the Native community, as
well.
This is one of the important advancements that we've made,
starting with NAHASDA which continues to move forward. NAHASDA
itself was meant to be a boon for homeownership in Indian
country. Finally tribes could make homeownership a priority.
Tribes could create and operate their own homeownership
program; and training and credit counseling programs could
create innovative new down-payment assistance programs and
tailor programs to fit their communities, but that did not
happen. Even after subsequent amendments that created economic
development demonstration authority, the promise of NAHASDA in
the area of homeownership has not been fulfilled.
In fact, in my Housing Authority, we believe that there are
two other authorities that provide eligible activities, but
we're restricted to activities found under 202, which basically
restricts us to do programs for families under 80 percent
median income.
With your amendment, Congressman Renzi, we were able to get
program income which allowed other housing-related activity,
and we failed to recognize that. We also have another amendment
that is the fine in definition, and if you look at the report
language, which also tailors economic development as part of
that process, and HUD has failed to recognize that, as well.
So with that, despite the NAHASDA claims to provide similar
authority be given to tribes in Public Law 93-638, the Act is
not specific as to what that authority there should be, and,
therefore, leaves a lot of interpretation up to staff at the
Department of Housing and Urban Development.
The staff at HUD, like so many government employees, must
walk a thin line between providing authority and flexibility to
tribes, and operating a program that will not be criticized by
watchdogs such as the Inspector General. Sometime this creates
a degree of caution on the part of HUD, and this caution is the
enemy of creativity, which was the underlying principle behind
the creation of NAHASDA.
Your committee can address that problem when it
reauthorizes NAHASDA next year by giving specific authority to
the tribes so that HUD employees are not left to interpret what
flexibility the Congress really meant to grant recipients of
NAHASDA funds.
Even as we address the problems at HUD, we remain stymied
by the system at the BIA, and we have heard of issues of the
title status report. We have heard countless promises, reforms
that have not been realized. So what I'd like to do at this
time, Mr. Chairman, is basically provide an opportunity to make
a recommendation and a proposal, and that is basically grants
of $50,000 or $500,000 should be made to Indian tribes and
Indian tribal organizations to develop a system that
administers title recordation functions.
The purpose of the grants would include tribal legal and
regulatory code development, developing facilities to maintain
the records themselves, and the development of tribal judicial
systems, but there are other ways in which Congress can change
the very nature of the trust land that can be very beneficial.
I know that any mention of changes in the status of trust law
causes consternation for many tribes.
We all remember how the termination policies of the past
decimated our communities, how land was lost and reservations
were checkerboarded with much of the prime land being alienated
from the tribes by swindlers and land agents. This must never
happen again.
Nevertheless, we should try to find ways for the land BIA
controls, for the land which we are part of, to have value
because the value of this land can be a stepping stone not just
to prosperity, but to the independence for our people. Attempts
to replicate mortgage market on reservation land, for instance,
have largely failed because the resale market, or more properly
the re-lease market of the land is limited.
While the concept of land is different for Indian people,
to succeed in an economic reality of land-based wealth, we must
consider changing the way we look at trust land, although
always with the goal of protecting the trust status. I propose
we create a new kind of trust land called economic development
trust land.
The use of land as collateral is fundamental to the
development of both private businesses and mortgage lending.
The purpose of economic development trust land is to allow land
to be used for housing and economic development purposes as
collateral and to make the land transferable within a larger
market without placing the land at risk of alienation.
The economic development of the trust land would never be
alienated from Indian ownership, while the land leases could be
controlled by individual tribes and leases themselves could
change hands without the approval of BIA. The land would never
leave the trust status. The only eligible leases would be to
tribes themselves, tribal enterprises, or tribal members.
If the land is eligible for placement to economic
development trust, these would be held in trust for individual
and families, if they so choose, and the leases for economic
development trust could be transferred by the controlling tribe
without BIA approval, so long as the new lessee is a recognized
tribe, tribal entity, or individual member of such recognized
tribes.
The land would be under the authority of an Indian tribe
for lease recordation, environmental assessment and approval,
archaeological and historical preservation and protection, or
for other general land restrictions.
I realize this is a bold concept and one that requires much
study and consideration, but I believe that to make a real
difference to in the lives of Indian people, we must take bold
steps. We should not let another generation of young Indian
families come of age in an environment and be devoid of the
kinds of opportunities available elsewhere in this country
without the opportunity for homeownership and all of the
benefits that brings.
Again, I thank you for your ongoing commitment to these
issues, and I look forward to working with this subcommittee,
and will assist your efforts in any way I can.
Mr. Renzi. Thank you very much. That's creative. I look
forward to exploring that with you.
[The prepared statement of Mr. Carl can be found on page
126 of the appendix.]
Mr. Renzi. Pattye, thank you for coming. It's always a
pleasure. I appreciate you coming back. I think you've done
this at least once before.
STATEMENT OF PATTYE GREEN, SENIOR BUSINESS MANAGER, FEDERAL
NATIONAL MORTGAGE ASSOCIATION
Ms. Green. Yes. Thank you, Chairman Ney, and Chairman
Renzi. My name is Pattye Green, and I am a senior business
manager for Rural and Native American Initiatives with Fannie
Mae. I have over 28 years of mortgage lending experience. Prior
to coming to Fannie Mae, I was the director of the Homeless
Finance Department for the Housing Authority of the Choctaw
Nation, and I am a Choctaw tribal member myself.
I was honored to appear before the subcommittee in Tuba
City and I am pleased to be here again today to discuss the
issues affecting homeownership on tribal lands and to share
with you the steps that Fannie Mae is taking to overcome the
barriers. I have submitted a lengthy written statement, but
today I will focus my oral remarks on the progress Fannie Mae
has made since my last report to the subcommittee 2 years ago.
Fannie Mae's congressionally-granted mission to create
affordable housing opportunities for Native American families
living on tribal lands is one of the toughest challenges we
face. You already know the facts. Almost half of Indian
households pay more than 30 percent of their income for housing
expenses, compared to 23 percent of all households in the
United States, and as a result, the homeownership rate on
reservations is 41 percent, well below the national average of
approximately 68 percent.
Let me tell you about what my company has done to put more
Indian families in their own homes. There is some good news.
Because of the Mashantucket Pequot Land Assignment Law we
helped enact, we can now address the legal issues of tribal
sovereignty in tribal court jurisdictions. The intent of the
law is to give tribal members greater rights in tribal lands
than afforded by traditional land leases, and at the same time
be more efficient and less bureaucratic.
An assignment of tribal land gives the tribal member the
right to use, occupy, develop, and exercise control over the
specified parcel of land subject to certain limitations
established by the tribe. The assignment is perpetual in
nature, unlike a land lease which has a maximum 50-year term.
An assignment can be mortgaged.
Furthermore, the assignment process is more streamlined in
language. The assignment process does not require BIA approval
for each individual assignment. Once the BIA approves the
entire assignment area, which it did for a section of the
Pequot Reservation, the tribe can make assignments for
individual parcels from the assignment area without further
Government review.
In addition, the BIA does not have to approve each
assignment mortgage as it would each lease mortgage. Under the
law, the BIA can now approve the entire assignment area for
home development. Fannie Mae can now create opportunities for
tribal members to own their homes without needing BIA approval
for every mortgage on an individual basis.
I would like to briefly describe Fannie Mae's three-prong
approach to expanding affordable housing on tribal lands.
First, with the new law we rolled up our sleeves and worked to
make homeownership happen on the Pequot Reservation. We worked
with tribal leaders to bring in developers, lenders,
counselors, title and mortgage insurers, and the other
stakeholders necessary to make homeownership possible.
The current phase of new construction on the Pequot
Reservation has meant that almost 100 Pequot families are in
the process of purchasing their own newly-constructed home.
Secondly, we want to reproduce our success with the Pequot.
We're standardizing the model for use by other tribes. We have
just finished an extensive amount of legal work to produce the
procedures, forms and other materials necessary to make
homeownership happen for tribes throughout the country.
Third, and most importantly, Fannie Mae is not going to
just sit back; we want to get on the road and bring our
expertise wherever it is needed. Members of the Pequot Tribe
are ready to join me and my Fannie Mae colleagues to share our
success with any tribe looking to expand homeownership for its
members throughout the country across the west as far as we
need to go.
There are other also great successes with issues returning
to the treatment of tribal and land tribal records being
experienced on the Salish and Kootenai Tribes in Montana and
the Saginaw Chippewa Tribe in Michigan. In fact, I'm leaving
here today to travel to Michigan to meet with representatives
of the Saginaw Chippewa Tribe and a harbor project to discuss
the outstanding work the tribe has done with their land title
and records office.
Helping other tribes across the country learn from these
efforts will be a Fannie Mae priority in the years ahead.
Fannie Mae is currently partnering, as Steve stated a while
ago, with NeighborWorks America, leaders from our Native
American tribes, including the Navajo Nation, representatives
from HUD, the Bureau of Indian Affairs, the National Congress
of American Indians, the National American Indian Housing
Council, and other leaders of non-profits, title insurance
leaders and other lender communities to develop a model
strategy to help more Native Americans address critical land
title and recordation issues.
To institutionalize Fannie Mae's commitment to Indian
housing, in January we established a new business unit
dedicated to providing affordable housing in the most
distressed tribal and rural areas of the country. We've seen
some results. We currently have relationships with more than
112 lenders who make loans to Native Americans on tribal lands.
Since 2001, Fannie Mae has helped our lender partners serve
over 8,535 Native American families to provide more than $839
million in affordable mortgages, financing on tribal lands.
Nationwide, Fannie Mae has invested over $160 million in low-
income housing tax credits, over $51 million in HUD Title VI
loans, and over $1\1/2\ million in additional financing to
support the construction and rehabilitation of units on tribal
lands since 2001, but there's still much more for us to do.
I hope that with these comments and our experience with the
Pequot, Fannie Mae has begun to make progress expanding
homeownership for Native Americans. We will continue to listen
closely to Indian country leaders and to build long-term
partnerships and work diligently to address the tough housing
and economic challenges facing Native American communities
today.
Thank you, and I'd be happy to answer any questions.
[The prepared statement of Ms. Green can be found on page
131 of the appendix.]
Mr. Renzi. Thank you for coming. Mr. Hellewell.
STATEMENT OF EDWARD D. HELLEWELL, SENIOR VICE PRESIDENT AND
SENIOR UNDERWRITING COUNSEL, STEWART TITLE GUARANTY COMPANY,
STEWART LEGAL SERVICES
Mr. Hellewell. Thank you. Chairman Ney, Congressman Renzi,
thank you for inviting the American Land Title Association to
testify today on removing barriers to homeownership for Native
Americans. My name is Ed Hellewell, and I am a senior vice-
president and senior underwriting counsel for Stewart. I have
30 years experience in real estate and the title insurance
industry. My involvement in Indian country began in late 1994,
into early 1995 and continues today. I am pleased to appear
today on behalf of the American Land Title Association.
The American Land Title Association, founded in 1907, is a
national trade association representing more than 3000 title
insurance companies, title agents, independent abstracters,
title searchers, and attorneys.
With more than 8,000 offices throughout the United States,
ALTA members provide services including title searches,
examinations, and insurance protecting real property owners and
mortgage lenders against losses from defects in titles. ALTA
members employ well over 100,000 individuals and operate in
every county and parish in the country.
The core of the business of ALTA members is search and
examination of title to land and interests in land to determine
insurability and conditions of insurability in closing
transactions. It is that perspective as a small cog in a larger
Native American homeownership process that I hope to bring to
the table today.
The title insurance industry is currently helping to
provide housing opportunities for Native Americans. My company
several years ago with Fannie Mae developed modified American
Land Title Association policies that have specific application
to trust land as well as a separate model for allotment land
that we use today and have used as a template for all of the
Indian country transactions.
But like others here today, while appreciating the progress
made to date, we are hopeful that improvements can be made to
increase these opportunities.
Today, title insurance availability supports the option of
conventional mortgage for homesite purchases in purchases in
Indian country. For example, Fannie Mae's Native American
Conventional Loan Initiative requires a title insurance policy;
title insurance is required by some USDA rural development
guaranteed loans; and title insurance is required by HUD for
the Section 184 guaranteed loan program--encumbering assignment
interests.
In addition, ALTA member title and abstractor agents also
close loans, acting as escrow agents only for government
guaranteed loans. And 184 loans outside of Indian lands are
typically closed by ALTA members and title policies are
utilized in that situation.
But the common thread that runs through the process of both
Government guaranteed loans and conventional market loans, is
the requirement for title information about the land and the
interest in the land held by the borrower. That thread takes
interested parties, except in the case of assignment interests,
to the LTRO's and the production of title status reports.
Subsequent to the July 2005 hearing that included testimony
about the production of TSR's, we had an opportunity to discuss
and consult with representatives of HUD, USDA, and on one
occasion with BIA, possible solutions to these issues. As we
understand it, certified title status reports require a search
and examination of the records beginning with the establishment
of the specific Indian land or reservation and then brought
forward to the current date. Several certified TSR's might be
requested during a transaction process.
The problem is that each search goes clear back to the
beginning of the reservation. Therefore, a solution that was
suggested during those discussions was to use the standard
practice followed outside of Indian country, as well as by some
BIA LTRO's, and the Colville and I believe the Salish Kootenai.
And that practice is to down-date the title from the date of
the last certified TSR or the last TSR or title report in your
file. It simply makes sense.
Ultimately, the September 29, 2005, memorandum announced an
interim policy which adopted a form endorsement to the
certified TSR, and adopted that practice. As I understood the
interim policy, it was intended to reduce the workload and
backlog at the LTRO. It was thought that would result in
quicker production of title information needed by lenders,
Federal agencies, and title insurers. By reducing the time
required for title search and examination by BIA, the timely
production of title information would increase homeownership
opportunities and options, as well as increase the number of
tribe members who benefit. Obviously a desirable goal. However,
this interim policy and accompanying endorsement form did not
appear to have been implemented uniformly.
The recently revised draft form that has been developed by
HUD and BIA after additional discussion appears to improve the
form and the process and supports the intent of the original
September 29, 2005, memo. We were pleased to contribute to this
effort and anticipate assisting with the planned educational
efforts designed to increase understanding and aid in
implementation of the revised endorsement form and the interim
policy.
There are success stories in Indian country. Several of
them have been discussed today. One is the Colville Reservation
process. Another is the Salish Kootenai. Another is taking
place with the Saginaw Chippewa Tribe in Michigan. That tribe
built a title plant to serve the tribe's land title needs with
the ultimate goal of compacting with BIA for the LTRO title
functions. Hundreds of conventional loans have been made and
insured to date with conditional reliance upon that plant.
Another promising project was undertaken by the Winnebago
Tribe of Nebraska that resulted in financing for a planned
community subdivision utilizing a conventional loan, bonds, and
title insurance.
Steve earlier mentioned the initiative to support a tribal
land title and recordation study. I think the value of that
study will be to include funding and personnel issues that
would be needed to be committed for such a project, and we're
pleased to be a part of that study.
Another option that has also been discussed is the use of
land assignments. This involves a creation of a tribal office
to record land assignments and the issuance of title insurance.
Such a program utilizing procedures and processes similar to a
county recorder's office will be acceptable to most title
insurers and will accelerate the development of most
homeownership.
As another suggestion for improving the title information
process, Chester Carl mentioned this also, and it may require
passing Federal legislation, would be to allow private industry
title examiners to examine Indian titles as is done outside of
Indian country. A manpower savings would result to the BIA and
might expedite the production of title information and homesite
mortgages. Currently, as I understand it, as Federal documents
the Indian land title records are not available to the public,
as they are in the case of county or parish land records.
Another measure for improving the TSR process or
eliminating barriers is the proposed operating guidelines or
standards that BIA has indicated would be completed after the
proposed leasing regulations are finished. But, the key to
having standards and guidelines is for the actual
implementation and application of those principles.
Mr. Renzi. Close for me.
Mr. Hellewell. Okay. I would note that we have had some
excellent experiences with BIA. Most of them are capable,
competent, and courteous. Obviously, they don't have complete
control over their staffing and task assignments. But, lastly,
I would note that homeownership is a step, and that has been
noted as a step ultimately for the accumulation of wealth and
value. Recently we undertook to insure a development of a
shopping center in Tuba City, which I think is some indication
of such a step. It's a small start.
In conclusion, the ALTA and its members are committed to
assist in removing barriers. We will continue to work with
interested Indian country parties and government agencies to
develop solutions and options. Thank you for this opportunity.
Mr. Renzi. Thank you so very much. I'm grateful.
[The prepared statement of Mr. Hellewell can be found on
page 137 of the appendix.]
Mr. Renzi. Marty, I look forward to hearing your testimony.
Thank you for coming all the way. I appreciate it.
STATEMENT OF MARTY SHURAVLOFF, CHAIRMAN, NATIONAL AMERICAN
INDIAN HOUSING COUNCIL
Mr. Shuravloff. Good afternoon, Chairman Ney, Congressman
Renzi, and distinguished members of the subcommittee. I want to
thank you for the opportunity to be here to discuss the
obstacles to homeownership and ways that we can work together
to eliminate them. My name is Marty Shuravloff, and I'm the
recently-elected chairman of the National American Indian
Housing Council, the oldest and largest Indian housing
organization in the Nation, representing the housing programs
of more than 460 tribes. I'm an enrolled member of the Leisnoi
Village in Alaska and serve as executive director of the Kodiak
Island Housing Authority.
I want to first thank you, Congressman Renzi, for the many
years of active support to the Native American people. The
NAIHC appreciates the subcommittee convening this hearing and
its focus on homeownership, which, of course, is a big priority
for us. A study conducted in 2000 by the First Nations
Development Institute estimated that there were 38,000
qualified potential homebuyers on the reservation. While the
study is now 6 years old, I am confident that the bulk of the
38,000 tribal members and the additional qualified potential
homebuyers since that estimate was made have not succeeded in
realizing the American Dream.
In 1993, Congress approved the Omnibus Budget
Reconciliation Act which included both an Indian wage and
health care credit and an accelerated depreciation provision
for property and physical infrastructure placed in service on
Indian lands. These twin tax provisions seek to raise
investment on Indian lands and encourage Federal taxpayers to
hire and retain Indian employees. The incentives expired on
December 31, 2005, and we hope Congress will reauthorize these.
One of the biggest obstacles to homeownership on Indian
lands is that tribal lands are held by the United States in
trust for the tribes, and are not available for use as
collateral or to securitize a home loan. Some tribes are
developing creative solutions to this problem such as the use
of leases with terms of 99 years or longer and use of
assignment law which authorizes tribes to assign the land to a
potential homebuyer.
Under this model, trust land is divided into parcels by the
tribe and assigned to tribal members, thus putting the tribe in
control of the land title process.
It is clear that the BIA cannot on a consistent basis, and
across the 13 BIA regions, provide the kind of timely and
effective responses to requests for TSR's that are vitally
important to home financing and, therefore, to Native
homeownership. This problem is structural and stymies the
delivery of mortgage loan products to Indian lands, preventing
homeownership from taking place where it is needed most.
I do not have to tell the subcommittee that this kind of
non-feasance by the BIA will not be tolerated by private
lenders who frankly, can and do walk away from lending
opportunities on Indian lands. In fact, we have just heard that
a major national lender and another bank serving tribes have
both discontinued their 184 lending programs.
NAIHC applauds the subcommittee for its multi-year focus on
the TSR problem. We are also heartened to know that Congressman
Renzi and others are developing proposals to remedy the TSR
problem.
If Congress were to authorize and encourage Indian tribes
to contract and manage the TSR function, I believe that many
tribes would take advantage of the opportunity.
Another option was put forth by one of the private banks
serving Indian communities. It suggested the BIA return to its
previous practice of offering informational TSR's which, while
not certified, would allow lenders to move ahead with
processing the mortgage without undue delay. This procedure has
been adopted and is now accepted for loans made under Section
184.
A major focus of NAIHC training and technical assistance is
in helping tribes promote homeownership among their members,
especially those living on reservations. The NAIHC's homebuyer
education program, called Pathways Home, trains hundreds of
tribal staff each year who, in turn, counsel tribal members on
the reservation on the homebuying process. Since 1998, the
NAIHC has also provided training to tribes on the home mortgage
process.
NAIHC has developed another new seminar in the homebuyer
arena to assist the tribal members for an individual
development accounts as one way to save their scarce dollars
for the down-payment on a home or closing cost. This October,
NAIHC will hold it's first full conference on IDA in Denver.
Also, since 1998, NAIHC has worked with private lending
institutions to break down structural barriers to homeownership
through our new mortgage partnership committee. The committee
is focused on anti-predatory lending, mortgage training and
overcoming barriers to lending on Native lands.
And, finally, next month NAIHC will launch an exciting new
initiative, a Web site designed for Native people seeking more
information and guidance on the homebuying and homeownership
process. I hope you will visit our Web site and give us
feedback.
I want to assure the subcommittee and you, Mr. Chairman and
Congressman Renzi, that NAIHC remains dedicated to making
homeownership the rule and not the exception in Native
communities and pledges our commitment to work with you to help
make that happen.
I thank you for the opportunity to be here today and would
be happy to answer any questions you may have.
[The prepared statement of Mr. Shuravloff can be found on
page 142 of the appendix.]
Mr. Renzi. Great. Thank you for that testimony, and thank
you so much for coming all the way from Alaska to be with us.
We appreciate your leadership.
Tim, we move to you. Thank you for coming from California,
and also for the work you guys have already done in my
district. I look forward to hearing from you.
STATEMENT OF TIMOTHY L. SIMONS, ASSISTANT VICE PRESIDENT,
FEDERAL HOME LOAN BANK OF SAN FRANCISCO
Mr. Simons. Thank you, Chairman Ney, and Congressman Renzi.
My name is Tim Simons, and I am an assistant vice president for
legislative and regulatory affairs of the Federal Home Loan
Bank of San Francisco. I am here today on behalf of the San
Francisco Bank to discuss the Bank's role in supporting housing
opportunities for Native Americans, especially through the
Bank's Affordable Support Housing Program.
The Board and management of the Bank strongly believe the
Affordable Housing Program is an important tool that, combined
with the expertise and resources of its member institutions,
provides expanded housing opportunities in a cost-efficient
manner.
Since the subcommittee's hearing in Tuba City 2 years ago,
progress has been made in providing more resources for decent,
safe, and affordable housing on Native American lands. It
should be noted that Federal involvement has been enhanced by
the passage of Congressman Renzi's bill, the Native American
Housing Enhancement Act of 2005.
This Act provides tribes with greater access to new funds
and more flexibility when developing housing improvement
projects. This and other public and private efforts needs to be
expanded in order to provide housing and vibrant communities
for Native Americans.
The Federal Home Loan Bank System plays a key role in
providing funds for housing finance. The U.S. Congress created
the cooperatively-owned Federal Home Loan Banks System in 1932,
providing liquidity for mortgages that might otherwise be
illiquid. We provide this in the form of advances. Advances are
needed because these loans generally do not meet underwriting
criteria of the secondary market.
As of the end of 2005, the Home Loan Bank System had over
$600 billion in advances. Of that, San Francisco Bank alone
represented over a quarter of the activity.
I spent some time talking about the advances because,
without that business, there would be no AHP. There would also
be no AHP if, in 1989, Congressman Frank and others did not
create this program.
The Affordable Housing Program, also known as AHP, is
funded by 10 percent of the net income of the banks. For the
San Francisco Bank, this income is disproportionate and comes
from advances. By working through its member banks, the
Affordable Housing Program provides debt financing for low-
income housing.
To date, the Federal Home Loan Bank System has awarded over
$2 billion dollars in AHP subsidies, helping to create more
than 430,000 housing units for low-income families. The AHP
program is the largest private source of grant funds for
affordable housing development in the country. In 2005 alone,
the San Francisco Bank awarded over $40 million in AHP funds in
two rounds of funding. In 2006, the San Francisco Bank awarded
over $23 million in its first round.
The recent winner on Native American lands are the Bee
Hoogan Shelter Foundation in Kaibeto. Washington Mutual and the
Bee Hoogan Foundation came together to build twenty three, four
and five-bedroom homes for very low and low-income families in
the Kaibeto Chapter of the Navajo Reservation. Currently there
is a waiting list of over 30 families for this project.
AHP funding of $280,000 will assist families in closing and
down-payment assistance. This project comes online in June of
2007. The Federal Home Loan Bank of San Francisco supports
services provided on Native American land such as the National
American Indian Housing Council. The bank has demonstrated
support by providing sponsorships and targeted training at the
Council's national conferences.
Funding on Native American lands, historically has not been
without difficulties. The San Francisco Bank has experienced
issues in the past with funding projects on Native American
lands, primarily because of the unique legal ownership status.
However, the bank's regulator, the Federal Housing Finance
Board, clarified that mechanisms other than a lien on property
could be used to secure the AHP repayment obligation. The San
Francisco Bank's ability to continue this innovative approach,
could be impeded by impending regulatory actions.
The proposal of increasing retained earnings could
discourage home loan bank membership and thereby reducing AHP
funding. Over 1000 letters were sent in against this proposed
regulation, including the chairman and ranking members of this
committee. The San Francisco Bank will continue to seek changes
to the proposal to safeguard the bank's core business and AHP
program.
We look forward to continuing participation in efforts to
address the issues of Native American housing. I appreciate the
opportunity to participate in this hearing on behalf of the San
Francisco Bank. Thank you.
[The prepared statement of Mr. Simons can be found on page
146 of the appendix.]
Mr. Renzi. Thank you, very much. I appreciate your
testimony and your insight. The good people of Kaibeto and the
other communities in Arizona also appreciate you guys really
getting out in front. You also get my respect.
We're going to open it up for questions to Chairman Ney.
Thank you, Mr. Chairman.
Chairman Ney. Thank you, Mr. Chairman. The first question I
have is for Mr. Barbier. You mentioned the same dilemma you
heard over and over. It takes 2 years to get a clearance of
title. Do you have any cases that go faster than that, or in
general is it 2 years? One year? What is the average.
Mr. Barbier. We received reports just last week that there
was one case that went through in 7 months from the time the
homebuyer--prospective homebuyer walked into the door and the
time they closed their loan. That was a record. That was
exceptional.
Chairman Ney. Seven months? So--now, some of the things we
heard today the BIA and others say, that, you know, it's the
gone quicker in some cases. The--one gentleman was still here.
They had--apparently they were doing their own work, but you're
saying for the people that you deal with, the individuals you
deal with, that 7 months is the quickest.
Mr. Barbier. That's the quickest we've seen on the Navajo
Nation.
Chairman Ney. The other question I had was, Mr. Hellewell,
you said that the common thread of the journey runs through the
process of the Government guaranteeing the loans, and the
requirement of the title information about the land and the
interest in the land held by the borrower. This is probably
kind of a dumb question, but something in that I've really
never inquired. But isn't it a case in history that we know who
owns this land and the case history is there. What makes it so
complicated that case history can't be provided? We know who
owns the land. Do you have any thoughts on that?
Mr. Hellewell. I suppose it is a matter of practical
experience. Often title insurance claim reports are opened
because somebody will come forward and claim that they own the
subject land, or an interest in the land. The reason for the
title examination and the title searching is to confirm that
the parties claiming an interest do, in fact, have the interest
that they claim. Typically in Indian country, it's pretty clear
who the vested owners are because the process is so methodical.
But we've had cases where somebody applied for a mortgage and
said that they owned the land; this happened in South Dakota,
and the TSR came back and, in fact, it was not owned by the man
applying for the mortgage. It was owned by another member of
his family, but the applicant was claiming that he owned it;
there was a family dispute.
Chairman Ney. But that happens even on the outside. I'm
just saying within--a lot of the land is in trust where it's
documented that it is owned by the Indian Nation. A lot of that
is a known factor, isn't it, within the BIA?
Mr. Hellewell. I agree that it's known, but it is a matter
of getting the documentation into a forum where somebody on
behalf of the title insurer can see it and read it and know
that it exists. From the title insurer's perspective, before we
can issue a title insurance policy, we have to have something
that shows, in fact, who holds the interest. It's more
complicated if you're in an allotment situation and you have a
lot of fractionated interests. Title insurers want a clear
statement of ownership in every case. Probates also play a
role. If somebody who is in that chain of title dies, then the
interested parties have to probate that estate for anyone to
know who now has the decedent's interest. So it's not just
absolutely clear, and certainly like any other land interest,
their interests can change, whether it's a leasehold interest
or an allotment. So title insurers see changes, some unrecorded
and not disclosed, and have to anticipate those possible
changes and corrections in the ownership interest of every land
parcel at the time of a transaction.
So the title status report, whether or not it's certified,
uncertified, or how you obtain it, is still a critical part of
the process.
Chairman Ney. Thank you, and my other question is for Mr.
Shuravloff. Thank you for all your work you've done, Counsel.
I'm looking forward down the road to looking into some of the
ideas you might have for the insurance problem that you
mentioned.
I'm just curious. What do you think about the testimony
today about the issue we raised that, you know, last July 17th
we wanted this to progress, and BIA gave testimony to the U.S.
House that it would take 8 months longer. I mean, it's such an
important thing to have the ability of people not to wait 2
years or 2 months for this.
Do you have any thoughts about how that system is coming
along, as you might have heard today in testimony?
Mr. Shuravloff. Well, Mr. Chairman, of course, I wasn't
here last year and I don't have the experience of knowing what
was said back then, but what I'm understanding today, there are
areas in the country that the BIA does a fairly good job, and I
think as we probably heard today, that they're overworked and
understaffed in some areas, but the simple reality still is
we've got a lot of families out there who need to get into
housing and get into it as soon as possible.
I think that we've heard some testimony of some potential
ways to get that accomplished, and I'm hoping that we can move
forward in looking into some different directions on how to get
our Indian people into housing as quick as possible.
Chairman Ney. Good observation. Mr. Chairman, my last
question would be for Mr. Carl. This is something that is kind
of new, I think, from what I've heard. You saying that despite
the fact that NAHASDA claims to be--provide similar authority,
that given the tribe on Public Law 93-638, the Act is not
specific enough in what that authority should be, and,
therefore, leaving such interpretations up to the staff of the
Department of Housing and Urban Development. And then you said
they had to walk a thin line between the authority flexibility
and also dealing with the Inspector General.
Do you think there are some things internally then within
HUD that make it difficult to walk that thin line? And I'm just
curious how the Inspector General plays into that.
Mr. Carl. Mr. Chairman, let me illustrate by this example.
We're doing a community development project on the Navajo
Reservation, very similar to Chairman Fullmer. It includes an
economic development corridor, and we're looking at this
development as a sustainable community using tourism as a
destination point. So all the funds for this development could
come from tourism; resort center, golf course, and this type of
thing.
So when HUD came in and did a review, again this is an
example, on my travel records they found this project called
Chaca Trails, so they started asking questions, and I said,
``Well, this one has--you're planning a golf course,'' right,
and, ``You're planning a water plant here to support your
development,'' that becomes an ineligible activity because it's
not an affordable activity.
So now they're going back and looking at their
interpretation of what is in the statute and what we consider
to be a sustainable community so families can have jobs and
families can work somewhere and be able to make payments on the
house which is going to be developed over time.
But those type of interpretations basically put us at a
disadvantage, and what we see is that the HUD staff locally do
not interpret the regulations to have internal control over how
to interpret. Then the Inspectors General have to come down on
their case and to be the watchdog to basically tell them that
they're not doing their job correctly.
So that thin line that the HUD staff walks, makes our job
even more complicated because that turns to oversight, and that
was basically what I was trying to say. So there are provisions
of the statute which we feel support economic development very
clearly, and some of this is through the action of this
committee.
When it comes to implementation, that is redirected the
opposite way, and so in order to get past it, we need to get
specific authority. In fact, there was demonstration of
authority provided in the 2002 amendment which allowed the
community development as part of the activity of Public Law 638
as part of the activity, was never implemented. The study was
given back to the Congress, so we don't know what impact that
study would have been.
Mr. Renzi. Thank you very much. I want to--Marty, you
talked about the fact you said in your testimony the Section
184 lending, there was major lenders discontinuing that. Do you
see a trend that way.
Mr. Shuravloff. Yes, Congressman. With me I've got Gary
Gordon, Executive Director of NAIHC. Maybe I can let him speak
to that issue.
Mr. Gordon. We were just notified that--the bank is
Washington Mutual, and they sent us a letter out that--
actually, they're getting out of Government lending programs
altogether, which include both the FHA and the VA programs, as
well as the 184 program, and the smaller bank is American West
Bank out of the Washington--the State of Washington.
Washington Mutual has argued that the Government programs
represented a very small part of their overall business, and so
they were going to focus on their primary products. However, I
would suggest to the committee that those programs--those
Government programs were established for a very specific
purpose, to provide opportunities that would not otherwise
exist, and I think to lose those programs would be very
detrimental.
Mr. Renzi. Who do you leave it up to in the market to take
care of it? Are you going to say, ``Well, we're out,'' and
leave it to somebody else to do?
Mr. Shuravloff. Well, they suggested that they have other
types of products that would fill the need, but I questioned
whether that is true.
Mr. Renzi. On reservations? In Indian country, they have
other products.
Mr. Shuravloff. That's what their letter indicated, yes.
Mr. Renzi. Well, it's--you know, they'll move Congress to
make it mandatory in their portfolio, and I'm not a big
Government guy and hear me at my own words, but if everybody
gets out of the business, then the Government will force them
to be in the business, and I send that out to whoever is here
from Washington Mutual, and I appreciate that.
Let me ask--
Mr. Shuravloff. May I?
Mr. Renzi. Please go ahead.
Mr. Shuravloff. I just want to add one thing, because I
agree with you in terms of your comments. I think that program
is vitally important, particularly in Indian country. I heard
the questions this morning, too, in terms of the progress being
made on tribal lands. That program was established primarily
for people living on tribal lands because they didn't have the
opportunity to get funding because lenders simply would not go
in, and so their approval is absolutely necessary.
At the same time I do want to say that Washington Mutual,
even though I'm saying this today, has been a very good
supporter of Indian housing up to this point. They certainly
have contributed to the NAIHC programs. They participated in
that training. Bev Casper is one of the key people there, and
has been very, very supportive, and I think she probably
personally feels pretty badly about it.
Mr. Renzi. Well, I appreciate that. At the same time, this
can't be left up to other people in the marketplace.
Ed, let me ask you this. When you were teaching us a little
bit ago how you all--it's standard practice and procedure in
title search history, to go back to the last certified title,
and then move forward then to look for a cloud on the title. Is
that correct?
Mr. Hellewell. Correct.
Mr. Renzi. And, yet, BIA will go back to the beginning of
time and redo in many cases what has already been verified. Is
that accurate.
Mr. Hellewell. That was their previous practice. The 2005
endorsement was supposed to change that. The most recently
adopted endorsement that they worked out last week, is also
supposed to change that practice. Instead of a certified TSR,
they're going to come forward from the first certified TSR for
the transaction and utilize that same down-date practice as
utilized outside Indian country. Then they're going to issue an
endorsement to be signed by--in some cases I think a Realty
Officer in this most recent agreement so that they can produce
title information quicker. So BIA has adopted that practice.
That's a practice that exists outside of Indian country.
Your homes and my homes were all the subject of a title
exam which was saved by the examining company and added to its
database. That's how title companies develop a base file, and
the title companies come forward from that. Title insurers and
now BIA take the risk that there is something amiss with the
previous examinations, but it will help reduce the problems
with the time required to obtain title information.
The problem was that the 2005 memorandum is--at least it
was our understanding that it was not being implemented, and
some of the offices apparently didn't know about its
implementation.
Mr. Renzi. Hold on a second. Arch, have you moved forward
on that?
Mr. Wells. It's moving forward, and the 2005 and the one
that the gentleman spoke about just last week, those are being
incorporated into all LTRO's in the regions, and in fact I have
a meeting with them all on the 14th, 15th, and 16th to
reinforce that.
Mr. Hellewell. If that's done, I think that will--
Mr. Renzi. That eliminated the backlog. That will
accelerate it and eliminate the backlog.
Mr. Wells. That, and reducing the items that we actually do
TSR's on; family mortgages and land sales that involve more
than two people. Forget the rest of them.
Mr. Renzi. That, plus taking the 638's out, here you go. I
appreciate that. Thank you. I wanted to ask--Pattye, I was
told--first of all, I want to thank you for your work--
exceptional work, particularly the offer that you made in
helping to train--I think you said that your experiences with
Pequot Tribe, and the Pequots are willing to get on the road
and help in training, and Jamie is president of the inter-
tribal council of Arizona, which involves a majority of our
tribes, and if we can get that kind of training, is that
something we could export from the southeast.
Ms. Green. Now, on two different things. On the Pequot
Tribe is the assignment where we streamline the process to get
the loans done. That's the assignment where we don't have to do
the ground-lease mortgages.
Mr. Renzi. If Jamie and Kathy and Joe of the Navajo Nation,
if they go 638, they're going to essentially have to set up a
land title records office. Right? So we're not just talking
about a setting up an office that does the title searches.
They're going to do a lot of other things. Right.
Ms. Green. Right.
Mr. Renzi. Okay. Go ahead.
Ms. Green. We have other tribes. Saginaw Chippewa Tribe in
Michigan is a tribe that is more than willing. They talked
about wanting to work with other tribes and help them set up
their land and title recordation office, and we have tribes
more than willing to work with other tribes to set up their
offices.
Mr. Renzi. Have any of the tribes that have begun to set it
up, seen seed moneys that Steve was talking about? Are we
talking about private money coming in from the lending--from
outside the Federal Government to help with that, a public
private partnership? Are we coming up with seed money to start
it with.
Mr. Barbier. My first reference to seed money had to do
with the study, Congressman, and the study would consolidate--
we heard some great ideas on the table today, and the study
would consolidate those ideas to provide a range of options for
tribes to choose from, sort of a menu. Within each one of those
options, there are a number of considerations; planned
assignments, economic development trust.
The Salish and Colville both continue to rely on the TAAMS
database, so they have essentially taken over the TAAMS
database, and they're talking other options to that. A study
would look at trying to flush out all of those options.
So in terms of seed money, the way Mr. Carl referred to the
possibility of recognition of the start-up costs that would be
required for a tribe moving to 638, some of that will come
through the Bureau and some of it will need to--some of it will
need to come from other places.
Mr. Renzi. Let me ask Arch. Do you need us--if we're going
to provide start-up money for the tribes, do you need us to do
it as specific--let me ask my staff. Is it as a specific line
item we put in the budget for, or how would you prefer to see
it?
Mr. Wells. That's an emphatic yes. If you don't do that, it
won't ever get there.
Mr. Renzi. It will just go in the general pot, so within
your budget, we have to come up with a specific line item,
funding of 638 programs for--
Mr. Wells. For realty specific efforts. Realty LRTO's and
title--
Mr. Renzi. And then once you see that line in our budget,
Mr. Chairman, then the private industry will help match a
little bit--or, not match--or also put some seed money in, too.
Mr. Barbier. NeighborWorks America is putting up seed money
to help launch this study, and we look to other private
partners.
Mr. Renzi. Why are you studying this?
Mr. Barbier. Well, I appreciate your call to action. I'm
right there with you, but the--in our analysis of this, there
are many considerations, and we've only had three or four
tribes so far move forward with this out of 562.
They're very interested in what are the risks, what are the
economic opportunities, how much is go it going to cost us?
Mr. Renzi. The study would be individualized, so if Jamie
wanted a study to find out what his vulnerabilities might be,
or would this be a national study?
Mr. Barbier. The study is a national study. You take all
these options that we talked about today, and put them in a
menu for tribes to choose from.
Mr. Renzi. When are you doing the study.
Mr. Barbier. Today.
Mr. Renzi. Starting after this?
Mr. Barbier. Starting after this.
Mr. Renzi. When will the study be completed?
Mr. Barbier. We're projecting we'll have some results in
the next 6 to 12 months, and we would like to work with the
legislative process to be feeding into as appropriate, some of
your call to action.
Mr. Renzi. That's good. I want to drill in a little bit on
the discussion. One of the things the team has been teaching me
and the chairman talking to me in the beginning has said, is
when we're dealing in Indian Country, in order to be able to
build a house, you all know we have to extend the electricity,
we have to extend the power, the gas.
Kathy Kitcheyan spoke about the fact that she's got
millions of acres, and just a small area of it can be
developed. I want to ask Chester, if you don't mind, what can
the Federal Government do? Where is the impediment that is
holding up the first part of expanding homeownership on Indian
country, which is the infrastructure expansion? What do we need
to do to unlock that?
Mr. Carl. Let me push a plug for Arizona Finance Authority
and the Fair Housing Commission and the Department of Indian
Housing. In order to consolidate a lot of these, not only
technical assistance, but having the ability to go after grants
similar to Chairman Fullmer, we have developed a Arizona tribal
CFI, and as part of that process--Chairman Fullmer is part of
that board. As part of that process, it is a real critical
element to providing infrastructure financing, is to make an
application so simple.
Mr. Renzi. Where did you get the money from, Chester?
Mr. Carl. It comes from--there was a partial investment
from the Arizona Finance Authority, the State of Arizona, and
basically other investors as we moved forward.
Mr. Renzi. How big is the pot of money?
Mr. Carl. We're currently right around $5 million.
Mr. Renzi. So you have $5 million in State investment
funds, and you have some money out here in--
Mr. Carl. Right, and so then we have somewhere around 37
tribes in the State of Arizona, and they have the opportunity
to start their infrastructure development, even before--
Mr. Renzi. We're looking at Section VI money. How effective
is it in helping to expand infrastructure?
Mr. Carl. Are you talking about Title VI money? The problem
we run into with Title VI money is that it is still so tied
into the affordable activities requirement, the environmental
requirements that it imposes on you, sometimes it's not worth
the effort.
You spend more time trying to weed through that
bureaucratic process, administrative time, consultant time. By
the time you're done, you spend a lot of time and effort trying
to get through that application process, and the tribal CFI is
totally opposite.
Mr. Renzi. Pattye, what are your thoughts on Section VI
money.
Ms. Green. The CFI--I agree with Chester. The Title VI
money, it's a good project that is out there. When I was at the
tribe, the environmental issues that we had to go through to
get the Title VI through, was very cumbersome, and the time--
like Chester said, by the time you got through it, it wasn't
worth it, and a lot of tribes are still very, very afraid of
the debt. They're very afraid that it is going to tie up their
NAHASDA dollars, and there are still education issues out there
that tribes need to be educated on the Title VI issues, and
it's guaranteed by HUD, but it is--it is hard for them to
understand and--
Mr. Renzi. How do they pay it back?
Ms. Green. Well, they--
Mr. Renzi. The construction dollars that they borrow.
Ms. Green. The tribe has to pay it back.
Mr. Renzi. Through general revenue.
Ms. Green. General revenues. They have to--
Mr. Renzi. Does it get built into the mortgage at all?
Ms. Green. Yeah, it's built into the mortgage, and they pay
back--the thing is if it goes into default, then it starts
coming out of their yearly NAHASDA dollars, and that's what
scares them. If something happens and they can't pay it back,
they lose some of their NAHASDA dollars, and that's what
frightens them. They're so afraid--they have to have the
NAHASDA dollars to do any affordable housing project.
Mr. Carl. The application is very, very cumbersome.
Ms. Green. Very, very cumbersome.
Mr. Renzi. Should we streamline Title VI? Is that the
answer.
Ms. Green. We're looking at options, and we haven't come up
with the answer, yet, at Fannie Mae, but we're looking at other
options of doing construction financing and--
Mr. Renzi. We want to work with you on that. That's the
baseline and the foundation. How we would get to the next step
of housing, is making sure we expand--we're putting $3 million
a year into electrical renovation for expansion on Navajo and
it's a drop in the bucket. It's not enough. We're not getting
enough families at the end of the line each year.
Tim, you guys over at San Francisco did a great job on a
project called Apache Dawn, in the Whiteriver. It was stalled.
I think they were a half million dollars behind on the
infrastructure. You all came in and you took a risk, and that
infrastructure got completed we have 300 families now who have
been over there for a couple of years now, and the statistics
that I quoted in my opening remarks about family and mass
boards going up and better relations within the community, a
lot of it has to do with your involvement, and I appreciate
that.
You talked about the affordable housing programs up in
Kaibeto and Page where you've been working on the Navajo. Can
you drill in on that up there, some of the successes up there
in Kaibeto?
Mr. Simons. Sure. What they're doing up there is building
some rather large family houses. I think it's 1100 or 1500
square feet, and there is actually a great backlog going on,
but the goal is to make sure that lower income families are
actually put into these houses.
Mr. Renzi. Yes. Larry, can you tell the audience about that
project on Apache Dawn. I just want you all to hear quickly
about a bank that took a risk and we have 300 families now in
Whiteriver, and I want to hear this story real quick because
it's a good way to finish up. Larry Parks from San Francisco
Bank.
Mr. Parks. I'm Larry Parks from San Francisco Bank. On the
Apache Dawn situation, we had a couple of things going. One was
in the alternative, we had people who had no title to the
property, and we would take a lien and support that lien, and
it was a cumbersome process and Congressman Renzi was very
helpful in making that happen.
The second thing we were able to do is the Ace program and
our Ace program allows a member to work with a non-profit
group, but it was really about infrastructure growth and it
basically got--they came and borrowed from us at cost, so it
was using basically our letter of credit to allow members to
borrow from us at cost to begin improvement in the area.
Mr. Renzi. How do the tribes step up? What did the tribe
have to do to make the--
Mr. Parks. First of all, they work with the member bank.
Mr. Renzi. They work with the member bank.
Mr. Parks. That's the first thing. The member bank comes to
us and basically uses its authority to come to us for a letter
of credit, but the tribes do more than anything else is we were
able to work through the lienhold situation so the regulators
would come through and see we were engaging in activity that is
permissible. So that was the process where we worked through
your office to make sure that actually happened.
Mr. Renzi. What did the tribe do to--what did they put up
from a collateral standpoint to get your member?
Mr. Parks. That's a good question. I think--well, once we
got the lienhold situation straight with the land, they were
actually able to use the land as part of the collateral, so it
was a comfort level, the ability to build would result in
active development of the land and, therefore, we create enough
density to improve.
Mr. Renzi. In the land itself, the sovereign land.
Mr. Parks. The sovereign land.
Mr. Renzi. Wow. You take sovereign land for a--
Mr. Parks. Well, that's what our regulators said we're not
going to do, but--
Mr. Renzi. So the tribe steps up and they put up their own
credibility and their own sources of general revenues, and
anything else, also, for the project itself.
Mr. Parks. Right.
Mr. Renzi. Anyway, yeah. Chester, go ahead.
Mr. Carl. Congressman Renzi, the project over in Kaibeto,
the San Francisco Home Bank involvement and also the Department
of Housing for Arizona, we were able to build 11 additional
homes out there. The project was funded by NAHASDA. Their
involvement enabled us to build 11 additional homes.
Mr. Renzi. Because of the financing guarantee? I got you.
Great stories. Thank you very much. Mr. Chairman, anything
else?
Chairman Ney. Mr. Chairman, before you close, I wanted to--
I know you have some staff here that you want to recognize. I
want to thank our staff. Sitting in order, they were Cindy
Chetti; Clinton Jones; Jeff Riley; and Tallman Johnson. They're
from Washington, D.C., and once we finish up, they will go back
and work on these issues. They have a lot of passion and a lot
of years of experience, and they should wear t-shirts that say,
``We're from the Government, and we're here to help.'' Well,
we're from the Congress. This is bipartisan, both Democrat and
Republican, and this issue of helping everybody in Indian
country.
I just wanted to again re-stress Chairman Mike Oxley and
Ranking Member Barney Frank, our Ranking Member of the
Subcommittee, Maxine Waters, who are so passionate and caring
and concerned for all these issues, and it is your impression
if you see it in Washington--if you watch C-Span you don't
think any of us talk to each other. We do, at least in the
housing subcommittee, and last but not least, Congressman
Renzi, whom I've learned a lot from, he's a pit bull on the
issues, and many other issues, and he does it with passion and
sincerity. It has been a real pleasure.
I ran a freshman orientation when he came to Washington,
and I see Members come and go, and when I ran a freshman
orientation, I looked at him and I knew that day that he wasn't
someone who needed 5 years on-the-job training.
Mr. Renzi. Mr. Chairman, thank you very much for bringing
this subcommittee out here, for your support, and for the
kindness that you've shown all people of this world who are
reaching out trying to have a home of their own. I know where
you come from. You've felt and you've seen it. The chairman
flew all the way out here in the middle of his own election to
be with us, and it's not easy to get people to come out in
August when we're on recess, so it says a lot about Bob Ney.
Gold is man's commodity, and time is God's commodity, and
for a man to give the minutes of a life that he's given for us,
says a lot about this guy, and I'm grateful. I really am. Thank
you.
With that, the Chair notes that some members may have
additional questions for this panel which they may wish to
submit in writing. Without objection, the hearing will remain
open for 30 days for members to submit written questions to the
witnesses and to place their responses in the record.
With that, Chairman Fullmer, thank you for your
hospitality, and the hearing is closed.
[Whereupon, the hearing was adjourned.]
A P P E N D I X
July 31, 2006
[GRAPHIC] [TIFF OMITTED] 31543.001
[GRAPHIC] [TIFF OMITTED] 31543.002
[GRAPHIC] [TIFF OMITTED] 31543.003
[GRAPHIC] [TIFF OMITTED] 31543.004
[GRAPHIC] [TIFF OMITTED] 31543.005
[GRAPHIC] [TIFF OMITTED] 31543.006
[GRAPHIC] [TIFF OMITTED] 31543.007
[GRAPHIC] [TIFF OMITTED] 31543.008
[GRAPHIC] [TIFF OMITTED] 31543.009
[GRAPHIC] [TIFF OMITTED] 31543.010
[GRAPHIC] [TIFF OMITTED] 31543.011
[GRAPHIC] [TIFF OMITTED] 31543.012
[GRAPHIC] [TIFF OMITTED] 31543.013
[GRAPHIC] [TIFF OMITTED] 31543.014
[GRAPHIC] [TIFF OMITTED] 31543.015
[GRAPHIC] [TIFF OMITTED] 31543.016
[GRAPHIC] [TIFF OMITTED] 31543.017
[GRAPHIC] [TIFF OMITTED] 31543.018
[GRAPHIC] [TIFF OMITTED] 31543.019
[GRAPHIC] [TIFF OMITTED] 31543.020
[GRAPHIC] [TIFF OMITTED] 31543.021
[GRAPHIC] [TIFF OMITTED] 31543.022
[GRAPHIC] [TIFF OMITTED] 31543.023
[GRAPHIC] [TIFF OMITTED] 31543.024
[GRAPHIC] [TIFF OMITTED] 31543.025
[GRAPHIC] [TIFF OMITTED] 31543.026
[GRAPHIC] [TIFF OMITTED] 31543.027
[GRAPHIC] [TIFF OMITTED] 31543.028
[GRAPHIC] [TIFF OMITTED] 31543.029
[GRAPHIC] [TIFF OMITTED] 31543.030
[GRAPHIC] [TIFF OMITTED] 31543.031
[GRAPHIC] [TIFF OMITTED] 31543.032
[GRAPHIC] [TIFF OMITTED] 31543.033
[GRAPHIC] [TIFF OMITTED] 31543.034
[GRAPHIC] [TIFF OMITTED] 31543.035
[GRAPHIC] [TIFF OMITTED] 31543.036
[GRAPHIC] [TIFF OMITTED] 31543.037
[GRAPHIC] [TIFF OMITTED] 31543.038
[GRAPHIC] [TIFF OMITTED] 31543.039
[GRAPHIC] [TIFF OMITTED] 31543.040
[GRAPHIC] [TIFF OMITTED] 31543.041
[GRAPHIC] [TIFF OMITTED] 31543.042
[GRAPHIC] [TIFF OMITTED] 31543.043
[GRAPHIC] [TIFF OMITTED] 31543.044
[GRAPHIC] [TIFF OMITTED] 31543.045
[GRAPHIC] [TIFF OMITTED] 31543.046
[GRAPHIC] [TIFF OMITTED] 31543.047
[GRAPHIC] [TIFF OMITTED] 31543.048
[GRAPHIC] [TIFF OMITTED] 31543.049
[GRAPHIC] [TIFF OMITTED] 31543.050
[GRAPHIC] [TIFF OMITTED] 31543.051
[GRAPHIC] [TIFF OMITTED] 31543.052
[GRAPHIC] [TIFF OMITTED] 31543.053
[GRAPHIC] [TIFF OMITTED] 31543.054
[GRAPHIC] [TIFF OMITTED] 31543.055
[GRAPHIC] [TIFF OMITTED] 31543.056
[GRAPHIC] [TIFF OMITTED] 31543.057
[GRAPHIC] [TIFF OMITTED] 31543.058
[GRAPHIC] [TIFF OMITTED] 31543.059
[GRAPHIC] [TIFF OMITTED] 31543.060
[GRAPHIC] [TIFF OMITTED] 31543.061
[GRAPHIC] [TIFF OMITTED] 31543.062
[GRAPHIC] [TIFF OMITTED] 31543.063
[GRAPHIC] [TIFF OMITTED] 31543.064
[GRAPHIC] [TIFF OMITTED] 31543.065
[GRAPHIC] [TIFF OMITTED] 31543.066
[GRAPHIC] [TIFF OMITTED] 31543.067
[GRAPHIC] [TIFF OMITTED] 31543.068
[GRAPHIC] [TIFF OMITTED] 31543.069
[GRAPHIC] [TIFF OMITTED] 31543.070
[GRAPHIC] [TIFF OMITTED] 31543.071
[GRAPHIC] [TIFF OMITTED] 31543.072
[GRAPHIC] [TIFF OMITTED] 31543.073
[GRAPHIC] [TIFF OMITTED] 31543.074
[GRAPHIC] [TIFF OMITTED] 31543.075
[GRAPHIC] [TIFF OMITTED] 31543.076
[GRAPHIC] [TIFF OMITTED] 31543.077
[GRAPHIC] [TIFF OMITTED] 31543.078
[GRAPHIC] [TIFF OMITTED] 31543.079
[GRAPHIC] [TIFF OMITTED] 31543.080
[GRAPHIC] [TIFF OMITTED] 31543.081
[GRAPHIC] [TIFF OMITTED] 31543.082
[GRAPHIC] [TIFF OMITTED] 31543.083
[GRAPHIC] [TIFF OMITTED] 31543.084