Wednesday, May 14, 2008
A More Humane Mortgage?
There are many things about Islamic law (Sharia) with which I disagree. In fact, I think much of it is archaic and downright unfair and abusive to females. Nevertheless, I came across something that slightly alters my opinion. There is a growing number of Islamic companies, in the U.S., making mortgage arrangements with Muslims that require no interest payments. I gasped when I first read that, but soon learned that it does work and makes a profit for the mortgagors. Sharia states that it is unlawful to profit by renting money -- charging interest -- as is taking advantage of someone's financial misfortunes. In simple terms, Islamic lenders buy a property then sell it at a higher price to a purchaser. The purchaser's payments never increase and the lenders make a reasonable profit. The lenders also say they are willing to work with their borrowers during financial crises. Considering the dire straights many lenders and home-buyers/sellers are experiencing, maybe this type of arrangement should be considered by all lenders. Can the American mindset, accustomed to big profits, accept taking a smaller piece of the pie to allow more to share in it? I'm not sure the culture of today's C.E.O.s and top management allows them to accept smaller shares of the profits. Has benevolence become passé or has prudence flown the coop?