This is really interesting to me since I'm a Realtor®
Here's how a Sharia-compliant sale might work between a bank and a Muslim homebuyer: The bank agrees to buy and hold clear title to the house, then enters into a contract to sell the house at an agreed-upon mark-up price that includes profit. The buyer agrees to pay the sale price in installments, or one lump sum. The markup rate is calculated to compete with prevailing interest rates, so the buyer's monthly payment is roughly equal to what a traditional lender might charge for a loan that combines principle and interest.While Seattle leaders want more lenders taking part in the Sharia program, there are some already offering such unconventional financing. Seattle-based Halal Inc. advertises on its website that "instead of starting with a flawed system and trying to 'make a fit,' we took the perfect system ordained by Allah and created a legal framework for it." Multiple calls to Halal Inc. by FoxNews.com for comment were not returned.
The sector has grown to more than $1.6 trillion in assets worldwide over the past three decades. Analysts see the potential for even greater growth as the Muslim population grows in the U.S. and Europe, attracting the attention of other financial heavyweights like HSBC and Goldman Sachs.
"Global Islamic financial assets have soared from less than $600 billion in 2007 to more than $1.3 trillion in 2012, an expansion rooted in the growing pool of financial assets in Muslim-majority countries driven by consumer demand for products that comply with religious codes," according to the 2014 report by the Council on Foreign Relations.
If the above is the "model", I'm thinking that the banks who make these loans will then become owners of a whole lot of real estate of all types throughout the country. There has been some law that precludes banks investing in certain things that might impugn their integrity as a bank.
Evidently, at least some of the "banks" who will make these loans are going to be foreign-based. So it would appear that such banks could be used for laundering funds for terrorist groups.
What about legal repercussions for the individuals who are in the process of buying these homes, but don't actually own them. If a judgment were rendered against you, and you were unable to pay, the plaintiff might be able to put a lien on your home. But what if you don't own a home? Same would be true for a lien for unpaid income taxes. Would this type of financing provide legal "shelters" for individuals that they would not otherwise have?
Suppose a Christian, Jew or atheist wants one of these financing arrangements? Will they be available without discrimination based on religion?
Do we have any bankers on the Forum?