No place like home
Navajos ready to own their own real estate

Leann Eskeets looks back to close the door as she enters her parents house, where she still lives when not at other family residences or fiancé's home. Eskeets has faced many difficulties with gaining utility services to the home because it sits on tribal land, yet is 25 feet away from the Gallup city limits. [Photo by Daniel Zollinger/Independent]

Second in a two-part series

By Zsombor Peter
Staff writer

Another night arrives upon a home with is the expected future home of Leann Eskeets. Providing utility services to the home has been a battle of legalities, because it sits on tribal land, yet is 25 feet from the Gallup city limits. [Photo by Daniel Zollinger/Independent]

LeAnn Eskeets can still see the spot where her late daughter Brooke Spencer carved her name into the damp concrete foundation of their future home overlooking Indian Hills along Superman Canyon Road.

Crowded into her parents’ Churchrock house a few hundred yards up the road with her three children and three nephews since divorcing her husband in 2001, Eskeets and her family were eager to move in. To make the cozy but modest house work, some of the children shared rooms and slept on the living room couch. A folding bed stands next to the front door for the occasions her 83-year-old uncle stops by.

“It was fun,” she said. “It was hard, though. We, me and my kids, wanted our privacy.”

Contractors started building their new home in November 2003 and finished the job in nine months. But while securing a right of way permit from the U.S. Bureau of Indian Affairs to run electrical lines to the house, tragedy struck.

On June 7, 2006, Spencer died in a Phoenix hospital from stab wounds inflicted by an former boyfriend.

Though the Gallup High School student was already making plans to move away for college, she was intimately involved in the details of the family’s new home. She had helped pick out the curtains and carpet. They were all hoping to move in together before she left.

“The sad thing about (the delays) is my daughter,” Eskeets said. “She looked forward to it. She wanted a place to come home to.”

Eskeets finally got started on a mortgage application in December. Had she chosen to build on private land, Eskeets could have sealed the deal within weeks. But because she chose to build on tribal trust land, where the BIA holds permanent title, she and her children are still staring at their empty home from her parents’ house, waiting on the mortgage to come through.

“I just feel like my daughter got deprived of moving into a new home,” she said. “Now it will be a happy but sad occasion.”

Eskeets has kept Spencer’s room the way she left it.

“How am I going to take all her stuff, her books, her dolls, all her stuff and move it over there?” she wondered, searching the kitchen for a napkin to wipe her tears away.

Overwhelmed at first, she thought of giving up the new house. But for the rest of her children, she’s decided to keep it.

“I thought about my children, and I wanted them to have a nice home,” she said.

If it weren’t for the U.S. Department of Housing and Urban Development’s 184 program, which is securing her bank’s mortgage, or the Navajo Partnership for Housing, a federally funded group helping tribal members tap into the program, Eskeets might not have even had the opportunity. But as Eskeets painfully knows, buying a home still takes longer on tribal land than elsewhere.

Besides the individual emotional costs, some experts say it’s the main drag on whole reservations across the country, holding some of America’s poorest communities back from the economic opportunities just beyond their borders. Following in the footsteps of a handful of other tribes, the Navajo Nation is searching for solutions.

The trouble with trust
According to the U.S. Census Bureau, the poverty rate among Native Americans and Alaska Natives in 2005, at 25.4 percent, was nearly double the national average, more than double when comparing whole families. Home ownership among the same group, meanwhile, stood at 56 percent, more than 10 percent behind the country as a whole.

According to the work of renowned South American economist Hernando de Soto, the two figures are intimately entwined.

De Soto, founder of the Peruvian-based Institute for Liberty and Democracy, coined the phrase “dead capital” to describe the stagnant wealth trapped within the homes of the poor by the laws of their lands. Because of unfriendly regulations, he argues, they can’t gain ownership, or title, to their property, the main source of wealth for most of the industrialized world.

By owning their property, home owners can secure loans others can’t, loans they can use to climb out of poverty. But on America’s own Indian reservations, that’s easier said than done. Federal ownership of tribal trust land adds roadblocks to home ownership the rest of the country avoids.

The trouble with trust land is that the federal government makes the title search process move about as fast as molasses. And in the mortgage business, where speed rules, it’s enough to scare most lenders off.

Though lenders can’t secure loans on trust land with the usual title, thanks to the BIA’s iron grip, they can secure it with a land lease. But even that takes a title search, to make sure the lease is unencumbered and free for resale in case the borrower defaults. On private land, where the local county holds the necessary records, the search usually takes a matter of days, sometimes weeks. But on trust land, where the BIA holds the records in one of a few regional offices spread across the country, it usually takes months, occasionally years.

Lenders, whose agents earn a percentage of every loan they close, said Eric Schmieder of the New Mexico Tribal Home Ownership Coalition, naturally chose the path of least resistance.

“The more you close, the more you make, the happier everyone is,” he said.

Everyone, that is, but most tribes.

“Real estate is what drives the economy,” said Mike Halona, Land Department head for the Navajo Nation, where 40 percent of the reservation’s 200,000 people live in poverty and nearly half lack jobs. “If I have equity in the home, I can use it for education, I can invest it.”

“The single most important source of funds for new businesses in the United States,” de Soto writes, “is a mortgage on the entrepreneur’s house.”

But for trust land residents who need a mortgage to buy a home but can’t find a lender to borrow from, Halona said, “that economic ladder is not there.”

Halona and others are trying to build that ladder by taking the title search process out of the BIA’s hands.

Bye-bye BIA
The stacks of paper leave little room to spare on the wide wooden desk inside Halona’s Window Rock office . With rapid-fire delivery, he speaks of integrating “layers” of information while shuffling through the piles for examples of the forms and applications the tribe has been working since 2005 to file in a new “title processing plant,” from site leases to utility records to environmental reports. Until now, they’ve all been spread between the Navajo Nation’s many departments and divisions.

“So that’s what we’re doing, collecting all the information we have on land,” he said. “We’re laying the foundation.”

According to Halona, much of the work has involved turning paper records, prone to getting lost from point A to B, into electronic form.

In tribal and federal offices alike, said Evert Oldham, a title examiner for San Juan County Abstract & Title Company in Farmington, “we’re finding records in people’s cabinets and desk drawers that were never filed with the BIA.”

Halona said the tribe already has all the records the BIA uses for its own title searches. In some cases, added Elizabeth Haley, a private consultant helping the Navajo Nation build its plant, the tribe’s records are actually more complete.

Halona hopes to have the plant up and running by next summer. At that point, he said, the Navajo Nation should be able to generate title search reports of trust land on its own, and in a matter of days instead of months or years.
That’s not to say there are not mortgages being made on Navajo Nation trust land today.

HUD’s 184 program eases the worries lenders have of doing business on land they can’t own by insuring with the loans with federal dollars. But word of the program, around since 1992, has spread slowly, and many lenders, who must qualify to participate, don’t bother. Even those that do seem to mostly ignore trust land, focusing rather on fee-simple land, which functions more or less like private land. Of the nearly $639 million HUD has secured through its 184 program, only $27.1 million has been on trust land.

That’s bad news for the Navajo Nation, where the BIA holds the vast majority of the sprawling 25,000-square-mile reservation, about the size of West Virginia, in trust. Though fee-simple land accounts for less than 6 percent, it’s home to more than three quarters of the loans HUD has secured on Navajo land.

“Some (lenders) will come in, dip their toe in the water, say this is not for me, and then they move on,” said Vickie Hammon, a loan manager for NPH.

By speeding up the title search process, the Navajo Nation hopes that will change. If it succeeds, it won’t be alone.

‘The poor are not the problem’
Most of America’s 562 federally recognized tribes still rely on the BIA for title reports. The National Congress of American Indians is studying the few dozen that don’t.

“We’ve seen some tribes who’ve taken it over turn over a title in 24 hours, so it’s very comparable,” said Peter Morris of the group’s Policy Research Center, to turnover rates on private land.

Among them are the Confederated Tribes of the Colville Reservation, a group of 12 tribes on a 1.4-million-acre reservation in north central Washington state. Sharon Red Thunder, who helped the confederation set up its title plant in the late 1990s, said taking the job over from the BIA has shaved months off the process. She’s heard of one search before the plant was running that took a year-and-a-half.

“Now we can get it done in two days,” she said.

For all the plant’s speed, though, it’s produced mixed results.

According to 2006 Census Bureau figures, 12.5 percent of the reservation’s 7,600 residents were unemployed. More than 23 percent were living in poverty. Virgil Marshand, the confederation’s acting director of planning, says those numbers haven’t moved much over the past decade.

On the other hand, Sharon Homdahl, general manager of Colville Tribal Credit, the confederation’s own loan provider, says home mortgages are on the rise. She’s seen the total value of mortgages issued annually more than triple in recent years, though she’s not sure how much of that has to do with the title plant.

Red Thunder said more members are taking out second mortgages.

LeAnn Eskeets is thinking of doing the same thing. Though she’s still waiting to move into her new home, the full-time accountant has already started dusting off old thoughts of getting into the franchise business. The house on Superman Canyon Road could prove the leverage she needs.

But for Eskeets, owning a home means security more than anything else.

“I just wanted a nice place to live,” she said, “a place me and my children can call home, a place where nobody can tell me to move out.”

Eskeets would like to see more homes like her own built across the reservation. Halona believes there’s plenty of demand. Once the tribe’s title plant is ready, he said, “I think you’ll see a real estate boom the rest of the country saw 25 years ago.”

If de Soto is right, home ownership could go far in turning the Third World’s troubles around. For Haley, the Peruvian economist’s diagnosis for the underprivileged strikes closer to home.

“The Navajo Nation needs a title plant for the same reasons,” she said, “so that Navajo families build capital in homes and business and later, if they want to, they can use that capital investment to improve their lives.”

“The poor are not the problem we think they are,” de Soto writes, “but the solution to their own plight.”