HOUSTON – Title insurance is an obscure but necessary part of the mortgage lending process, and the lack of it in Indian country has hampered efforts to develop a private lending industry on Native homelands.

But now, a nationwide title insurer is working with tribes to expedite the process, and at least one tribe has set up its own register of deeds office.

Stewart Title Guaranty Co. here has started programs with the Yerington Paiute tribe in Nevada and the Saginaw Chippewa tribe in Michigan, and hopes to be working with several others shortly.

The Michigan program in particular has taken off, with more than 100 mortgages done last year in partnership with Flagstar Bank, PMI Mortgage Insurance and mortgage agency Fannie Mae, according to Paul Alexander, the Stewart agent working with the tribe.

And Edward D. Hellewell, senior vice president at Stewart, said negotiations are underway with the Navajo Housing Authority and tribes in Alaska and Louisiana for similar programs, to be done in conjunction with Fannie Mae, PMI and First Mortgage of Oklahoma City.

Title insurance is a guarantee that there is no other lien on the property to be mortgaged, and is required by private lenders and mortgage agencies. Mortgage insurance buys a guarantee that the borrower will not default on the first 20 percent of a mortgage.

Title insurance usually involves research on titles filed with local county courthouses. In Indian country, it requires working with tribal agency offices and BIA’s title status reports (TSRs).

However, in the case of the Saginaw Chippewa program, the lender and title insurer relied on the tribe’s own register of deeds office for a time when there was a BIA computer shutdown, a significant acknowledgement of tribal sovereignty.

According to Native American Housing News, the Seminole Tribe of Florida has also set up a title office.

“The pieces all were there and they all fell together,” said Alexander, who owns Mt. Pleasant Abstract & Title, just a couple of miles from the Saginaw Chippewa reservation in Michigan.

He credited the tribal housing commission, headed by Ron Jackson, with bird-dogging any potential problems on loans to keep them going smoothly.

Loans were available both on and off reservation, and construction loans and refinancings have been included.

At a conservative $100,000 per loan, the 100 loans closed last year represent $10 million in mortgage finance.

Alexander expects the same volume, or more, in loans this year.

The BIA’s notoriously slow TSR process has been “a stumbling block,” he said, but the local Aberdeen office has expedited them, and the tribal register of deeds office has done a good job, to the point where the program relied on them instead of the BIA when the agency suffered a computer shutdown.

In Nevada, Stewart has worked with the Yerington Paiute through its Carson City office, headed by Brent Holderman.

According to the company it has worked with City Mortgage of Carson City on three loans last year, and expects to do the same this year. It also has done at least one loan with Cal Fed Lending, a unit of First Nationwide Mortgage Corp.

Loans are for $50,000, with the tribe providing a second mortgage of $35,000.

According to Stewart, the first loan took a whole year to close, but Holderman, Hellewell and Ralph Rogers, head of the Yerington Paiute’s housing authority, have worked to cut the processing time to four months.

As far as negotiations in progress go, First Mortgage of Oklahoma has been negotiating with the Navajo Housing Authority to do a mortgage program on tribal homelands, and if Stewart joins in it will become part of an effort that has closed more than 300 mortgages to Indian borrowers nationwide.

Their program uses Fannie Mae’s electronic mortgage tool, Desktop Originator, for a completely electronic processing of the loan, enabling it to close loans as far away as the Aleutian Islands of Alaska.