Tuesday, May 13, 2008

Riba free

A Higher Law for Lending

Business is up at Islamic finance firms, which don't charge interest and weren't part of the mortgage debacle.

Posted by mken @ 08:55 PM (2870 views)
Please complete the required fields.



6 thoughts on “Riba free

  • Clear as mud. The finance company buys the house and sells it at a mark-up that’s based on interest rates – but it’s not counted as interest? And does the company raise its finance in an Islamic wholesale money market that charges no interest? And it sells the mortgage/debt to Freddie Mac, which pools and securitises them and sells them to investors, who expect a profit/interest.

    Reply
    Please complete the required fields.



  • Disingenuous article. Absolutely nothing to make these mortgages more feasible for the financing companies.

    Reply
    Please complete the required fields.



  • And guess what sort of activity the money is folded back into…
    Boom…

    Reply
    Please complete the required fields.



  • The loans are funded by Islamic investors who don’t want to receive interest. They get a share of the profits made by the financial institution – sort of like a with profits fund, or the equity tranche of a Collateralized Debt Obligation.

    These finance deals are, if anything, a higher risk to the financial institution than a traditional mortgage – that’s the whole point of Sharia finance. But then, they will normally be able to pass at least some of that on to the investors. They certainly won’t be lower risk. However the financial institution may be stricter about who they provide finance to, and may require the “tenant” to put down more of their own money than a mortgage lender would normally require.

    Reply
    Please complete the required fields.



  • The structure of these deals unfortunately still incorporate riba – they are not really adhering to the Quran or the Hadith of the Prophet (PBUH). They are no more than a sleight of hand – I feel sorry for Muslims who are deceived in this way but then they at least will forgiven for their naivete unlike the structurers of these deals.

    Reply
    Please complete the required fields.



  • No more nonsense about Jesus on here from the in-breds please..

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>