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Lower Brule and Wells Fargo add housing

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LOWER BRULE, S.D. - Two tribes have signed agreements with banks to increase mortgage opportunities for their members.

The Lower Brule Sioux Tribe here has made a deal with the giant Wells Fargo Home Mortgage, the nation's biggest mortgage bank for access to its full line of "conventional" (non-governmental) mortgages, while the Choctaw Nation of Oklahoma is teaming up with BancFirst, Oklahoma's largest state-chartered bank, to offer government mortgages.

Lower Brule is the first to sign a general "tribal agreement" with Des Moines-based WFHM, a unit of Wells Fargo Bank of San Francisco. The mortgage bank also has somewhat different "counseling services agreements" with about 10 other tribes and is working with an additional 10 to 12 nations.

Rob Skjonsberg, emerging markets consultant, said regional American Indian mortgage specialist Juel Burnette, Sicangu Lakota, is working with potential borrowers on the 240,000-acre reservation about 50 miles south of Pierre.

The agreement with the tribal council acknowledges jurisdiction of the tribal courts, although it requires a limited waiver of sovereign immunity. If a tribal member defaults on the loan, the tribe will be able to assume the obligation or arrange a new borrower rather than let the land be lost through foreclosure.

Cy Maus, the tribe's infrastructure manager, said the tribe is pleased with the agreement which will be a "significant beginning" to ending the housing crisis on the reservation.

Skjonsberg said Wells will offer Lower Brule borrowers affordability options, such as a $1,000 interest rate buydown or a $750 gift certificate to Home Depot. It has closed several mortgages on Lower Brule through the federal Housing and Urban Development section 184 loan. Skjonsberg said Burnette last year closed 40 HUD 184 loans in the Great Plains area, for a volume of $3.3 million, and that overall, Wells has closed 175 HUD 184s, mostly on tribal trust land, for a volume of $15 million.

Wells is trying to adapt the "Indian mortgage specialist" concept in several areas besides the Great Plains, the consultant said. It has several in place, including Christy Tinney in New Mexico and Valerie Harjo in Oregon, and wants to add specialists in Washington, Arizona and Michigan. Gloria Palacios assists Tinney in New Mexico, while Mary Norlander assists Burnette in the Great Plains area.

In Oklahoma, the $2.6 billion-asset BancFirst is sponsoring Choctaw Hope Development Corp. to be a direct originator of Federal Housing Administration loans. The community bank and the tribe agreed to a partnership last year.

FHA, a unit of HUD, is a major incubator of first-time homebuyers across the nation. Its 248 program directly targets Indian borrowers but has been little used, in favor of the HUD 184 mortgage.

The Choctaw Nation offers several housing programs to its members - the Mutual Help program, the Choctaw Homebuyers Advantage Program and the Housing Improvement Program (for rehabs), plus rental assistance programs.

Choctaw Chief Greg Pyle said the tribe is excited to offer the new program and urged members in need of housing to contact the Choctaw Housing Authority in Hugo, Okla.

BancFirst previously sponsored five local Community Action Agencies to originate FHA mortgages, president Doug Wilken said.