American Indian Tribe Becomes a Player in the No-Money Mortgage Business
Down payment assistance programs again draw federal government scrutiny.
Critics such as Delice Tom want more information about the company they own.
Photographer: Lindsay D’Addato for Bloomberg Businessweek
Richard Ferguson considers himself the friend of struggling homebuyers everywhere. The Utah mortgage man will make families’ down payments for them. That way they can qualify for loans backed by the Federal Housing Administration. And they are—in droves, borrowing as much as $100 million a month.
Ferguson runs the Chenoa Fund, which is owned by American Indians, Utah’s Cedar Band of Paiutes. “Chenoa” is thought to be a native American word for peace, but operations like Ferguson’s are raising concerns in the industry and in Washington. That’s because he’s running a company with a dual role, not only providing the down payments for borrowers across the country but also profiting from making the loans by charging above-market rates and fees. Some members of the tribe say they’ve seen little or no benefit from the business and question where the money is going.