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Fannie Mae will use tribal courts

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RAPID CITY, S.D. ? The Fannie Mae Corporation made a welcome announcement during a summit meeting here that it would eliminate the requirement for a tribe to waive limited sovereign immunity to obtain housing loans.

Rebecca Culberson (Choctaw), Fannie Mae's Senior Vice President of Housing and Community Development, announced the new initiative during the Great Plains Native American Housing Summit. She said, "We agree to the jurisdiction of the tribal courts and you will never hear 'waiver of sovereign immunity' from us again. We are committed to make the process work on tribal trust land."

The audience, composed of more than 70 tribal housing authority representatives from 18 tribes, greeted the announcement with a resounding ovation.

Culberson also told the group that Fannie Mae has created a Native American Business Council within the organization. The counsel will deal with the problems of lending from a grass roots level and will bring ideas and complaints from Indian country to the organization's table.

Past loans from Fannie Mae and other lenders required the tribes to waive limited sovereign immunity so that legal issues could be handled within the state or federal courts as agreed to by both parties.

This change puts trust in the tribal courts to handle any legal problem associated with the loan.

"Fannie Mae is committed to increasing homeownership and affordable rental housing for Native Americans throughout the United States," Culberson said. "I am hopeful that it will help create more innovative partnerships that will address the critical housing issues that exist today on our reservations."

Fanny Mae has partnered with more than 100 tribes to provide homeownership loans for nearly 1,500 families and has a commitment to provide $350 million so that 4,600 American Indian families will find adequate housing over the next decade. The now official name derives from the acronym for the government-sponsored organization's former title Federal National Mortgage Association.

Bob Simpson of the Fannie Mae partnership office in South Dakota will head the Native American Business Council.

"The purpose of the council is to create more investments on trust lands and work with the communities more effectively," Simpson said. "We will enhance the outreach and work within the company to increase awareness and be more efficient. We are serious about investments in Indian country."

He added that a benefit would be to expand contracts to the tribes and build partnerships to provide home loans. The council will be effective in facing challenges and providing a more creative approach to the loan process.

"This move shifts the housing needs to the 51 partnership offices and brings the efforts closer to the ground. Every tribe is unique, all have different needs and we will work within the company to change what is needed.

"This acknowledgment doesn't happen in one night. We are in this for the long haul but we won't make promises we can't keep. We will develop relationships and partnerships. We will address some of the issues and identify solutions. As the company evolves the company grows and we can identify the tough housing challenges," Simpson said.

The change in the limited sovereign immunity waiver and the new business council comes from a long and successful partnership in Indian country and the result is a trust on the part of Fannie Mae.

"These are different investments, different goals and with some hard work help from technical assistance we will be there working with the tribes 50 years from now," Simpson said.

The council will work within the company to identify other sources of financing while working to invest in many housing projects in Indian country, he added.

A purpose of the summit organized by Fannie Mae was to listen to issues and problems tribal housing officials have in dealing with lenders and also to gain some insight into how the lending process can work for different tribes. It was a consultation meeting where the tribes were given input into the way Fannie Mae and other lenders work in Indian country. Tribal representatives said they hoped that other organizations and agencies of the federal government and private organizations would take Fannie Mae's lead and undergo a consultation meeting in the same manner.

Tex Hall, president of the National Congress of American Indians and chairman of the Three Affiliated Tribes, told the gathering that nothing was more important than housing. He also said that housing and land and trust issues would be the main topics at the next NCAI meeting, to be held in Bismarck, N.D.

"The development of home ownership is the cornerstone of economic development. Fannie Mae gives us hope that we can raise awareness so American Indian families have home ownership also," Hall said.

He alluded to the 2000 census, which showed that both North and South Dakota lost population, but that reservation populations increased. The out-migration came because there are few decently paying jobs, he said.

"Indian country has an in-migration, the tribes increased by 15 percent. The tribes will become 20 percent of the population in North Dakota in a few years and by 2050 what will it be?" he said.

The problems of housing and economic development are solvable within the communities and tribes.

"The experts are here in our states, the best talent is here. We need to empower that talent and that gets back to home ownership," Hall said. "Fannie Mae helps with tax credits and it works for rural America and Indian America. We are proud of our part of the country, yet we have problems we are addressing and thanks to Fannie Mae and the housing authorities we are making a difference. The new Native American Business Council will look at the problems. It will bring the tribal people to the table."

The Great Plains Native American Housing Summit dealt with financial literacy training and homeownership. Of all the solutions discussed, education topped the list. Education about financial planning on an individual and family basis is one of the keys to homeownership and a community's economic development will increase through that procedure, tribal officials said.

Education about financial security should start in the lower grades in school by helping the youth understand the meaning of saving and budgeting expenses so that as an adult there can be enough financial security to provide home ownership for families, the participants said.