Overview Of Mortgages

With the approval of the Secretary of Interior, or his/her authorized representative, a Native landowner can apply to mortgage his/her land.  Mortgaging is a process where a landowner uses his/her restricted land as collateral to obtain a loan from a lending institution.

The Bureau’s responsibility for approval of mortgages or deeds of trust affecting restricted land stems from the United States Government’s duty as trustee for the restricted land and is parallel to the responsibility for sale and disposal of such land.  If the mortgage is approved, it has the potential to transfer title, which may result from a foreclosure, at which time the lender shall be regarded as vested with the unrestricted fee simple title to the land.  The transaction must be clearly justified and in the long-range best interest of the landowner(s).  All documents must recite the statutory authority under which the transaction is made.

For the purposes of these guidelines, mortgaging includes refinancing.   The instrument of mortgage would be a Deed of Trust, or other mortgage instrument, as appropriate.

If the landowner desires to mortgage his/her restricted property, he/she must submit the request in writing to the Realty Service Provider.   An Application for Mortgage of Restricted Native Land will be sent to the landowner for completion and returned to the Realty Service Provider.   At this time, the landowner will be provided with a sample of the lender’s requirements along with the information required by the Realty Service Provider.   The Realty Service Provider can now proceed with the standard mortgage transaction procedures.    In addition, the Bureau of Indian Affairs, Branch of Credit & Finance will review this package.  The final process is the Commitment to Approve Mortgage prepared by the Alaska Regional Office and will be forwarded to the lender with instructions to include the required form of approval in the Deed of Trust.   The Deed of Trust will be returned for approval prior to recording in the Alaska Probate and Title Services Center and the State of Alaska Recording District.

Since an appraisal, Archeological Inventory, NEPA Compliance and a Title Status Report are required, immediate requests must be submitted to OST Appraisals and BIA Archeology so they can be scheduled during their field season that is the summer months. In addition, to fulfill NEPA compliance, your NEPA document must be submitted immediately to the BIA Environmental Scientist; and an immediate request for a Title Status Report must be submitted to the Alaska Probate and Title Services Center.