Norwest mortgaging on trust land

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PIERRE, S.D. - Norwest Mortgage here closed almost 50 loans on Great Plains trust land in 1999 for a total of $3 million in home loans to American Indians, and hopes to do at least that much again in this year.

In fact, its Indian country originator, Juel Barnette, Sicangu Lakota, who hopes to double that target number and do 100 loans to Indians in his region, which includes the Dakotas, Nebraska, Wyoming and Montana.

Norwest recently closed its first mortgage on the Crow Creek Reservation, which means it has now financed homes on all nine of South Dakota's reservations.

Barnette said Norwest has closed 42 loans on South Dakota trust land, and had seven more in process.

In addition, the bank has made two loans on North Dakota trust land, one in Nebraska, and one in Montana. Norwest has also made a couple of loans to Indians living on fee simple land.

The company, a unit of California-based Wells Fargo Bank, started its trust land program in 1997 when Barnette was a personal banking officer at Norwest's office in Mission, on the Rosebud Reservation (the bank also has an office on the Lower Brule Reservation).Richard Gregor, a Norwest Mortgage representative, closed the firm's first home loans on trust land on the Rosebud, and Rob Skjonsberg is the consultant for the program.

Why did Norwest target Indians for home loans? "It's an untapped market," Barnette said. "There's a lot of business to be had."

Most of the units have been manufactured or modular housing, although one stick-built home was financed with a combined construction and permanent finance loan.

The average mortgage has been about $65,000-$70,000, with many Indians getting assistance from their tribes with down payment and closing costs. The majority of the mortgages have been done through the Department of Housing and Urban Development's section 184 program, which guarantees lender outlays.

Barnette reported that the Bureau of Indian Affairs Aberdeen office is expediting loan approvals for the program. Deals are getting done in 60 days if there is a preexisting structure, but can take as long as six months if new construction is necessary.

"The process isn't fun," Barnette said. "But the end result is always a happy one."

Challenges include credit problems, lease procedures through the tribe and BIA, and saving money for closing costs.

Norwest Mortgage has also closed loans on the Navajo Reservation in Arizona, and on the Coeur d'Alene Reservation in Idaho. In Idaho, they have been financing homes in the Osprey Spirit development near the tribal casino, while on the Navajo they have financed a few scattered site mortgages.

It is in the process of extending mortgages on the Pine Ridge Reservation on homes built after President Clinton's publicized visit to the reservation last summer.

Twenty homes have been built, and Barnette expected to close 17 mortgages in three locations, including one in Oglala, where many homes were damaged by tornados last summer. The other three units are awaiting qualified applicants.

The president's program has taken some heat recently for only building 20 units, when many more were promised.

Barnette feels he can make his ambitious goal of 100 loans, or about $6.5-$7 million in financing, because he is working with three tribal housing authorities on projects which will close 49 loans if they are successful.