In the best interest
This is from an article the Washington Post in which Dr Mahmoud is quoted
Rizwan Kadir liked working in finance, but when he read a verse in the Koran that said engaging in usury was the same as “waging war” against God and Islam’s prophet Muhammad, fear struck him.
“When you come across an aya [verse] like this, it makes you start wondering what you’re doing with your life,” said Kadir, an investment banker in Chicago.
He started reading about Islamic views on interest and talking to workers at Islamic banks that offered interest-free finance as a foundation of their business.
Kadir eventually concluded that the prohibition on interest didn’t jibe with Islamic logic and that the “interest-free” arrangements touted by Islamic banks were just usury under another name.
“What they’re doing is calling the same thing with a bunch of different names,” said Kadir, who has a mortgage and auto and student loans.
[...]There are about 270 Islamic banks with more than $265 billion in assets, according to sponsors of the International Islamic Finance Forum, a semiannual industry conference that meets in Switzerland this fall. Most of the banks are found in wealthy Muslim nations, such as Saudi Arabia, Bahrain, Dubai and Malaysia. In addition, many Western banks, such as industry giants Citibank and HSBC, have established Islamic finance departments.
But a growing chorus of critics say the idea that Islamic law forbids all forms of interest is incorrect. Moreover, they argue, some of the bankers, lawyers and clerics who draw up and bless “interest-free” transactions are profiting off the pious with arrangements that look a whole lot like usury.
Islamic scripture condemns riba, an Arabic word meaning excess, which is commonly interpreted as usury. Some Islamic law scholars assert that all interest is prohibited. Others say that only excessive interest is prohibited and that interest is an indispensable part of society that a logical God wouldn’t condemn.
“The notion that the spirit of the Koran is against modern forms of interest, like on a mortgage or a consumer loan, this to me makes no sense,” said Timur Kuran, chairman of Islamic studies at Duke University.
Throughout history, interest was common in the Islamic world in places such as the Ottoman Empire, Kuran said. Controversy over the practice emerged only during the 1940s, when Indian Muslims cited the need for an interest-free banking system as one reason they needed a homeland separate from Indian Hindus, Kuran said.
Does anyone have a reference for what he mentions above? I’d like to read some historical context.
The Islamic finance sector developed slowly before taking off in the past 20 years, with Islamic financial institutions offering a growing number of transaction models, such as profit sharing, that avoid interest.
[...]
Mahmoud Amin El-Gamal, chair of the Islamic economics department at Rice University, argues that such transactions amount to a bait and switch.
“The whole is, I want to lend but I don’t want to call interest ‘interest,’ ” said El-Gamal.
He says such transactions cost more than other financial arrangements and hurt Muslim consumers.
“They’re trapped because they’re told they’ll fry in hell if they go to regular banks,” he said.
El-Gamal said obedience to the form of the contract often supersedes the spirit of Islamic economic values, such as serving the poor.
Industry advocates counter that even if some financial transactions serve the same purpose as interest, that doesn’t mean they are forbidden by Islam.
“It’s possible, as it is in many ethical and legal systems, for two different actions to have the same outcome but, because of the way they’re done, for one to be wrong or illegal in that ethical or legal system, and for the other to be permissible or lawful,” said Taha Abdul-Basser, an Islamic law scholar with the Islamic Finance Project at Harvard Law School.
[...]Skeptics like Kadir, the investment banker in Chicago, remain unconvinced. “For me, Islamic finance is nothing more than affinity marketing — you market your services to someone who you have an affinity with,” he said.
Filed under: Changing World, Practical Solutions
Salaam’Alaikum
I converted to Islam when I was a teenager.
I remember being taught that all usury was harram and that it was a major sin. I remember being taught that I could not pursue higher education if I took out loans from the federal government or through a non-Islamic banking system. I come from a large family (8 of us) and didn’t have parents that could pay for my education in any capacity not even for books. Working a minimum wage job to pay for school and having no place to stay didn’t work out either. So being “young” and “stupid” ( inexperienced in life) I did not pursue my higher education for years becuase I could not afford to pay for my tuition, books, and transportation.
I also recall many situations of African American brothers with wives and children on welfare working at Family Dollar or some other minimum wage job who eventually came to the conclusion that they needed a skill, trade, or degree in order to support their growing families of 4,5,6, children. Being sincere in their faith they would ask the sheik if they could borrow money in order to pursue a skill, or trade not even a degree program. The sheik would admonish them for even considering the option, berate them and point out their weakness in eman, and than tell them to be patient, save up their money from their minimum wage job in order to pay for college.
I personally witnessed this happen to a sisters’ husband I used to babysit for. He wanted to attend Lincoln technical school and get training in automotive technology. His dream was to open up his own shop. His wife was so happy, and her depression had started to go away as she spoke about not needing food stamps to buy processed foods, waiting ridiculous hours for a doctors appointment becuase she was on medicaid, and having to deal with visiting social workers regularly becuase they were receiving so many public services. She even spoke about going back to school herself when he finished.
Unfortunately, his group of Muslims really got to him, and his family ended up in a terrible downward spiral. The last time I spoke to his wife, he had gotten a co-wife who was a professional and was living with her in order to escape the poverty.
What I always found so bothersome was that many of the people slapping harram labels on loans for education purposes and housing purposes were living in half million dollar homes, driving luxury cars, and had college degrees themselves. They also had large families and I just can’t believe that even some one on a $150,000 income can finance the entire education of 5,6,7, children.
My experience with this issue was ten years ago. I decided that I do not need to give some sheik, imam, what ever, power over my life to that extent. Don’t ask, don’t tell, and they don’t know.
I also wanted to say that my husband and I are in the market for buying our first home. We researched the three Islamic home mortgage companies. Our research taught us that if you go through them you don’t own much of your home, can’t decorate ( paint, hang pictures, repairs) unless you have paid in so much money and own up to a certain percentage.
Also, the millions of fees they have may as well be usury.
We are just going to accept our promissary notes from Wachovia.
Salaam
Recent discussions on Islamic Banking that may be of value:
A largely negative assessment of Islamic Finance in the Middle East from the dashing young capitalists at Aqoul.
My mostly positive experience with Islamic Finance in Malaysia. The jist of my [unscholarly] support for Islamic Finance rests on the fact that The Quran does not prohibit interest, it prohibits a thing called riba, the meaning of which is something both wider and more complex.
Regardless of where you fall in your opinions on Islamic Finance itself, I think it’s a real shame for muslims in the West without Islamic options not to avail themselves of whatever finance is available. Surely abject poverty is more destructive to the soul than a possibly usurious loan. God knows best.
@ Umm Amina:
“Our research taught us that if you go through them you don’t own much of your home, can’t decorate ( paint, hang pictures, repairs) unless you have paid in so much money and own up to a certain percentage.”
I agree. I think GuidanceFinancial is one of the worst offenders. I knew a number of brothers who used to work there.
Standard GuidanceFinancial line: “No P.M.I.”
Yeah Right!
@ bingregory
Excellent articles in the links you posted
One of our main problems as Muslims these days seems to be form over substance
” Surely abject poverty is more destructive to the sole than a perilous usurious loan.”
- bingregory
I agree 100% and so does the Department of Social Services! : ) If you want to suffer by your self that’s fine, but when you have children, your obligation is to provide for their basic needs with out having to constantly rely on assistance for all of your needs for a long term period of time.
I also forgot to mention that the sheik would advise sister’s such as myself to get married if we couldn’t support ourselves and children.
Many did that too, and it backfired like a horrible nightmare.
abu ameerah:
What did you decide to go with brother?
“They’re trapped because they’re told they’ll fry in hell if they go to regular banks,” he said.
Excellent commentary.
People of faith (and good intentions) can potentially become ‘marks’ for some of the most devious con-games around. The trap has already been set - from the minbar, in the largely irrelevent books spewing religiosity over practicality, and in the culture of - as JT says above “form over substance”.
So people feel governed by an extreme and twisted version of the religion from being given opinions of men - then being told that ‘if you don’t submit to this - you’re not a believer’ or if you dispute this which is undisputible - you are a sinner and thus bound for hellfire.
So in comes the cunning and savvy marketeer who manipulates this intense (and misguided) faith. And people of faith are being forced to make a choice that they should never have been put in a position to make in the first place. This is why you have good Muslims who want to please Allah being forced in a position to:
1.) Pay twice as much for lower quality food (walaa’/baraa’
- But what choice do you have?? everything else is haram.
2.) Pay an ever increasing amount of money to slaughter animals (even though the animals aren’t getting any plumper)
3.) Ever increasing hajj package prices (even though the quality of service isn’t getting any better) gotta make hajj though!! - What’r you gonna do??
4.) Islamic finance: (sigh) so you pay up to 3 times more than you would a regular loan - own less house - all just to SAY it’s not riba - even though you’re getting screwed.
I think Tariq has said something like its using the piety (or the desire for piety) of the muslims against the muslims themselves. I think that’s about as low as one can go.
salaam,
I think one thing is often not mentioned that should be. We all no interest if forbidden and forbidden things can only be entered into based on a severe need. Owning a home in most categories cannot be considered a severe need. Usually in any area that you could afford to buy the house you could rent a comparable house in that area. So if a person feels the islamic finance is a sham that doesn’t warrant them to go to an all out and out haraam alternative.
Now for educational pursuits to qualify yourself to take care of yourself and family that at least can be justified as a real need. Because without a certain skill set and a increasing family size you can stand to not be able to provide the bear necessities of life.
and to the defense of the islamic finance options most things i’ve read, the endorsers admit they are not the ideal but it is the best they can at this point. there goal is to make it as much a trade transaction than a straight interest transaction. And yes it would look similar but the devil (or the benefit in this case) is in the details.
“…That is because they say: Trade is like usury, but Allah has permitted trade and forbidden usury.”
and yes the fees for some of the companies are ridiculous but not all. Devon Bank in Chicago in particular has a reasonable “halaal tax” that came up on a 150000 loan to an extra $50 a month in comparison to a conventional loan quote I received.
But there are others where you could be paying hundreds more a month.
anyway these are just my 2 cents.
What is the logic in paying rent on a home which you receive no tax benefit from, you can’t make changes too, or can be evicted at well by the landlord when you can OWN your own home, improve your credit dramatically, get a fat return at the end of the month and do what you what to do to your property? Why give that Tax return back to the landlord?
YOU NEED A HOME if you have a FAMILY
To be your own boss, have your own land and then responsibility and built ownership pride that many low income people will never learn until they get themselves a piece of the pie. You can’t even build up decent wealth without the sale of a home. GF and LaRiba is both suspect. When we went to them they said they don’t base the rate on your credit score but needed your credit score anyway. At the end of the day we would have paid 35-45k more for the house than with a conventional loan. No one has yet to explain why does “halal” come at a premium with continued sup par service?
Salaams Umm Amina,
Yeah, I got the get married advice as I struggled to put myself through school in undergrad after my divorce. In fact, this year I got the same advice as I asked community leaders for sponsorship or loans for my Arabic study abroad in order to finish my graduate studies. One brother told me to go to Egypt and marry an Egyptian over there. Great advice! Green card marriage, can we spell nightmare? Humph!
Asalaamu alaikum,
I purchased my home through the Murabaha program at HSBC last year, alhamdullilah. I was just going to get a conventional loan, and try to go through an agency such as NACA, but then Ramadhan started, and after reflecting on the verses of the Qur’an, especially baqarah, I couldn’t, I just couldn’t. I talked to my wife, and she felt the same way.
I found out earlier this year that they have discontinued the program.
I must admit that I do have a few credit cards that I am trying to pay off. I have one down. I used the excuse of necessity, in which case it would be halal, but of course that’s a slippery slope. Thing is, even though I obviously believe in the benenfits of home ownership, I can’t really justify going the conventional route. Owning a home is not a necessity. Even though it makes economical sense to me, there is opportunity costs to think about, and there are a lot of rich folks that rent rather than own. My old interest supervisor was this Jewish guy that had his name chiseled onto a few buildings downtown, but still rented, and tried to encourage me to do the same.
Education, I feel, is a different thing. A man must provide for his family. If he isn’t able to do it with the skills and education he has, then I would just make that choice.
As for paying a premium for halal, my soul is worth it. I’m not rich but no means, but my wife and I try to make it work.
All that being said, I did used to work for a financial institution consultant firm, and usury is not the same as interest. Usury is exhorbitant interest. These were people that have masters in finance that told me, so I really doubt that the everyday brother really understands that.
internship supervisor ^^^
yes you need a home if you have a family but you don’t “need” to own a home. renting is a perfectly viable solution. our deen does not REQUIRE us to own a home or have a good credit score. and if a haraam means is the only way to do that then we are commanded to avoid it. we’re not in a ends justify the means religion. because if that’s the case the muslim alcohol and pork sellers have an excuse. they’re just trying to get ahead.
that being said, of course these islamic finance solutions should not be taking advantage of the people because of their desire to do what’s right or at least what’s better. but those are 2 different issues. because one group is fleecing the other does not mean the other can then do the haraam with that as an excuse.
the premium stated, is higher risks involved, specialized market, etc. That’s why I think Devon bank had a better solution because they are not just an islamic institution. So they have a different pool of resources to pull from so their rate is more competitive. GF and LaRiba are pretty much catering only to muslims therefore their poll of resources and profit potential is smaller. Allahu Alim.
if geniune needs exist then usually what is restricted is loosened. but in a lot of cases its just a matter of discomfort. humans tend to not want to suffer.
we’re all covered with the dust of riba so I’m not presenting what i’m saying from some saintly stance but we just have speak the truth even if its against ourselves.
yeah, and now that I think about it, there are alternatives to increasing your skill set, especially in terms of going to trade school. You can always go to the public library to study. At one job I had, the programmers were reluctant to give me tips on how to program, so I just started studying a book that my sister gave me and studied on my own. It was a year or two before I got an opportunity to apply it to the job, but I did, and I got a promotion off of that.
BTW, my name is on my deed and I can make changes to my home.
Salaam ‘Alaikum
It is always amazing to me how many things we are discovering about Islam that we were doing totally wrong until today in the West. I wonder what is next? I am afraid I have already heard it — that Islam does not require us to pray 5 times a day. I have already heard Muslims saying this one, and I would not be surprised if it doesn’t pop up in some news story about those poooooor, ignorant, misguided Muslims who don’t automatically ascribe all sorts of negative intentions to the ‘ulema of this Ummah. If betting weren’t haram (but I’m sure some Muslim economist or ‘expert’ will come up with a “betting is halal” fatwa in a few years), I would bet that we’d see this article within the decade.
We should — regardless of our minhaj — be worrying about our “credit score” with Allah rather than Experian.
Brother Carlito & Brother Muhammad-nur
1) Don’t you want to leave your wife and children property if you should die or become disabled?
2) Do you believe that you must be poor in order to become closer to Allah?
3) Please define what you mean to be discomfort?
4) Please define what you mean to be ” basic needs”?
Historically speaking renting has been for people who are:
> bachelors
> immigrants
> poor or working class
people with 2 or more children have always been known to buy a home. I think we are forgetting that buying a home also includes the quality of public/private education your children receive, your quality of life, your health and safety, and a financial resource in the matter of death or emergency.
I believe Islam encourages us to live within our means not “below” or “above” our means.
I don’t understand how some one with children doesn’t believe owning a home is a basic need? I’m open to understanding where you are comming from??
Woe…
Wait a minute..
I think it’s very sanctimonious and arrogant to attack the character, faith, and practice of another Muslim becuase they made a choice to not subject themselves or their children to substandard living conditions.
I think it’s very self righteous, and hateful to attack the character of another Muslim who has chosen to advance economically, own their own home or just be financially responsible.
It’s one thing to be extravagant and exceed one’s financial limitations but it’s quite another to seek a good quality of life so that you aren’t subjected to the consequences of having a poor quality of life. It’s utter insanity to maintain a situation of hardship. It’s insanity to never strive for stability and security.
My personal experience in the Muslim community is that just like in the dunyah there a bunch of “haters”. They are unable or unwilling to have what some one else has so they just dump on them instead.
Just down right hatefulness cloaked in the guise of “Islam”
ain’t falling for it
Islam requires a person to pay their debts, Islam requires a person to be honest, to not steal, all of this is apart of financial responsibility.
I recall as a former Christaian two camps of Christians: those who believed suffering and poverty was the only way to G-d and those who didn’t believe that.
I see the same exact attitude with Muslims but I honestly feel it’s even worse.
Just my opinion.
@ UmmAmina:
I chose not to go with GuidanceFinancial and ultimately had to stick with renting…
(sigh)
@ Umm Amina
I couldn’t agree more. I just wonder why people thinks that Islam calls us to live by a bartering economy. Self inflicted suffering is part of today’s understanding. Some even refuse to buy new clothes in the name of righteousness. Suffering is look unkempt, be uneducated and even superstitious. Why do we find that ignorance and superstition are more prevelent where there is a lot of poverty? The speakers tell us that is it because we are not all Islamic scholars that we are in our current condition, but that has NEVER been the case. Can we not see that we have illiteracy, superstition, abject poverty and other problems as well that need to solve as well, but have been made into righteousness.
In the Islam of my understanding there is nothing improving one’s status (educational or financial) and trying to avoid being impoverished and blaming others for one’s own failings.
Salaam
@ abu ameerah
Don’t quit yet brother. Hang in there, and ride out the waves of the economy over the next 12 to 24 months if you can. Use the time to re-build your credit to the best of your abilities. Record foreclosures, the Iraq war, the Presidential election, and the adjusting of interest rates is going to break the housing market to such an extent that it will remain a buyers market for a very long time. Allot of the foreclosures are due to people who 1) are hasteful and reckless by agreeing to ARMS, and buying homes they know they can’t afford 2) families who fell into the two income earner trap and 3) persons lacking financial literacy and wasting their funds. Remember you can always start small with a condo and townhouse and build your way up. You can also get into using real estate as a source of income too brother. If you did the latter you may be able to offset high interest rates of even interest entirely. I wish you and your family well.
@ JT
You know, in the beginning I didn’t understand where Brother Tariq N. was going with this website. I misunderstood his intentions, and thought he was trying to demoralize poor or uneducated Muslims, but after lurking for awhile, and reading articles like this, I finally get what he is trying to do. ( I will never change my mind about home schooling, I will fight about that until my children bury me in the earth). I didn’t see it before, but I see it now. I’m also crystal clear on many matters.
You know what brother? I think many of our fellow Muslims who harbor such beliefs are going to be left behind. In the U.S. it was easier to “move up” about a good 30 to 50 years ago than it is now. We are entering the digital age yet uneducated and even semi-skilled people are operating in the industrial age. Big problem. America has a caste system to. It’s not necessarily based on people who feel their worth or dignity is greater than some one who is less fortunate. It’s about people who understand that there are financial, legal, civil, medical/health, mental, and emotional consequences to occupying substandard living conditions.
I half to say that I agree with brother Tariq N. statements in some articles on this blog about encouraging a strong work ethic, educational and economic advancement, paternal establishment, and financial responsibility. It should be taught as being apart of Islam and or a “good” Muslim. I see a crisis here… becuase when I think about certain movements and they disastrous results the produced in the people..
Salaam
@ Maragari Aziza Hill
Sister, they deliberately mis-advised you becuase you are African American, and becuase they have decided they believe you aren’t worth it. I think it’s time to Get Real, real fast, about who we are really dealing with in our so called Muslim community.
I used to work for a Muslim owned company who had a contract with an Islamic Think Tank where I did Administrative support and editing specs. I can tell you straight up, that there are ” Light and bright so they are alright” Arab and Pakistani young women who are doing similar work as yourself and are adequately funded. The quality of their work is poor and they miss the mark every time becuase they have a serious deficit in their maturity quotient.
You will probably get more support of any kind dealing with the non-Muslim African American community than you would the Muslim community-even some of the African American Muslims. They key is knowing the right people, increase your social capital sister and expand your network. You can do it, you are an intelligent sister, you have talent.
On another note, I was having this conversation about the “get married” advise with another sister. Instead of just creating a “single parents” , “widows” or ” scholarship fund” women are required to use their Vagi#$! Why is that the only way of “helping” a Muslimah? For men who misuse and abuse polygamy this is always their justification.
The reason I find it so absurd is becuase studies show that in cases of men who have divorced and re-married supporting two households EQUALLY is nearly impossible.
Just my two cents.
Asalaamu alaikum Sister Umm Amina,
1. Yes, I do want to leave my wife and children property when I die and if I become disabled.
2. I don’t think that you have to be poor in order to become closer to Allah (SWT).
3. lack of comfort (?)
4. basic needs - food, clothing, shelter.
Historically speaking, home ownership really didn’t take off until the 60’s with the Nixon administration. I’ll have to dig up my old college notes if you want me to go further into that. However, my family have always been home-owners.
As I stated above, I do understand and appreciate the benefits of home ownership. I own my own home. I just don’t think that you should go through haram means to obtain it. I started to go that route, but then Allah (SWT) showed me something different. It also is not the only way to wealth. A mortgage payment is generally going to be higher than renting from a comparable home. How many take that difference and put the money towards saving?
If home ownership is what you truly desire, there are halal ways to get there, some of which are:
1. having someone hold the mortgage. This way, you may be able to negotiate terms that are more beneficial to you. Harder to come by, but better for you.
2. Rent to own. Although I would avoid these because they are targeted towards the lower class.
3. saving money and purchasing a house in a less than ideal neighborhood. This is sort of the route I took, although I could have afforded better. At first, there was no way I was going to do this. I didn’t like the neighborhood, and although I didn’t want to be a suburbanite, I definitely was thinking about purchasing in the prime location in the city I was in. But then I saw the heart of the community that I’m in now. The neighborhood is not as good as where I was renting, but the houses are cheaper, and I am surrounded by Muslims with good character. Muslims are steady buying up the neighborhood, and getting really good deals in the process. It’s becoming harder and harder to rent to a good Muslim because everyone is buying homes.
I know we live in the states, but there’s no way that anyone can tell me that purchasing a home using riba is the only viable option. I didn’t do that, and I have a host of friends that didn’t either.
If schools are you concern and neighborhood are a concern, I live close to one of the safest neighborhoods in the united states. Excellent schools, and there are apartments there.
I still can’t get around why the “Islamic Banks” still charge you 30-40% more over time in “rental fees/ aka interest” and require extra high closing cost fees? If it’s REALLY halal it seems to me that the rates would be more reasonable and in some cases CHEAPER. Their “rental rates and fees” shouldn’t be marked up so high and they certainly shouldn’t give “scholars” a premium for Fatwa’s in support of each company. No one else thinks this is a conflict of interest?
I always that paying the LEAST possible AMOUNT of any RIBA or FEE is the goal. No matter what we say you can’t deny that these fees have to be calculated by the APR rates reported everyday. There is no other way around it.
I meant to say i was always taught to try to pay the LEAST possible amount
@ UmmAmina:
Mashallah, you’ve got a good handle on the economy! JazakallahKhair for the advice.
Salaam alaikum Umm Amina,
Thanks for the advice. Yeah, I can imagine for the elitist Muslims that my social capital will increase once I attain a Ph.D. from a prestigious university and if I land a well paying job at a prestigious university. But help when you’re down and out? That’s only given by people who believe in you. I had a very informative conversation about possible reasons why useful information was withheld from me. It’s all political. But when 1 door closes, Allah opens up others. He is the best of Planners.
I’m just preoccupied by the idea of alternative education financing. I’m so far from ever owning property. The prospect looks pretty grim, especially with the mortgage prices in my area. I just hope that when Muslims in the West begin building finance institutions, they don’t promote unfair lending practices that disciminate against certain groups of people.
Riba and fees are two different things. With my mortgage at HSBC, I think that may have charged an extra couple grand for the loan. I charged it to the game. I’m going to pay off my house way before my term is up (Insha’Allah), so I am not sweating it.
That being said, I think that charging 30%-40% extra is un-Islamic.
I am interested in buying a home with my husband within the next 1-2 years. We are attending a home buyer’s institute this summer through a local non-profit development corporation. Like Carlito, we are looking to buy in a neighborhood that is not the best but that offers us a house that we can pay off. Insha’allah we will purchase a market-value home from this non-profit.
From my own research, I am not that comfortable with Guidance. I see a lot of halal/haram thrown around with little clear discussion of what you save or lose.
I am in complete agreement with hijabisoverrated,ummaminah and carlito: homeownership is important and it is a step that I want to make wisely. My parents own two homes. At various times, my siblings and I have been able to use one of my parents home for ourselves and our families. I want to be able to extend this same type of aid to my future children-insha’Allah. I am no longer happy with making my landlords comfortable!
FYI - Black Enterprise is doing it again…
2007 Black Enterprise Own Your First Home Contest” (Contest) Official Entry Forms may be obtained by e-mailing HOME@BLACKENTERPRISE.COM, sending mail to ATTN: Own Your First Home Contest, Black Enterprise, 130 Fifth Avenue, 10th Floor, New York, NY 10011 (”Sponsor’s Address”), calling 1-877-WEALTHY, or by visiting the Black Enterprise Website at http://www.blackenterprise.com (the “Website”). Official Entry Forms and required attachments (”Attachments”
may be submitted during the period of Friday, July 13, 2007, 9:00 a.m. New York time through Friday, Sept. 14, 2007, 5:00 p.m. New York time (”Contest Entry Period” 
via fax to 212-886-9604, mail to ATTN: Own Your First Home Contest, Black Enterprise, 130 Fifth Avenue, 10th Floor, New York, NY 10011, or the Internet through http://www.blackenterprise.com.
Any other attempt at entry is void.
Glad I’m not the only one who sees right through so called Islamic Financing
Does anyone have any figures associated with Guidance? WS, I understood you to mean that Guidance will charge you an additional 30-40% more on top of what a conventional bank will charge, but that sounds unbelievable.
I guess it doesn’t matter, I always do my own research anyway.
I’m still not convinced that Riba is a neccessity. That’s my take on it. Ultimately everyone is responsible for their own actions, everyone will be held accountable on the Day of Judgement.
Samira,
That’s an excellent idea, attending that workshop. I did something similar with NACA. Ultimately, I chose not to go with them, for reasons stated previously, but I definitely benefited by learning about the home buying process.
2 years ago when i was still living in DC I went to LaRiba and Guidance and at the end of the day Guidance was charging me exsactly 48,000 more for the entire mortgage than a brokerage firm (non bank) which usually will charge you more than any credit union or big bank. Just to give you an idea of how off they were and this is when APR was much cheap then it is today, they wanted us to pay 1700.00 for a 200,000 mortgage and they wanted us to come to the closing table with 23,871. I got a FHA for 4.7% from the brokerage firm and they wanted 6,700.00 in closing cost and the monthy bill would have been 1,281.00 a month. They claimed they don’t base there rates on interest rates set by the market. So why such a high rental “fee”?
Oh, and when you’re renting an apt aren’t you paying interest for someone else? You know that you are so theirs no avoiding it. SO now you pay someone elses interest, fix someone elses credit and give somone else a nice tax return.
Hijabisoverrated
RE: “there’s no avoiding it…” You hit the nail on the head! Given most of us have at least one bank account, a credit card, and those of us who have attended college… STUDENT LOANS… really who’s fooling who?
WS
Exactly, but that’s not to say lets party down hard in the capitalistic system (which is the best functioning system of our times BTW) but lets not say we’re not participating in something when we know we are. The second you get a check you’re in trouble. You can open an account which allows you at best, a free checking option but its not free people. They use your money to invest on behalf of the bank in all sorts of stuff and they don’t ask you permission. Let’s assume great deals of these things aren’t halal. Ok, so you take your check to the liquor store? You’re stuck no matter what and all you can hope for is a ROTH or IRA like AZZAD funds or some other Islamic index to invest your money with some hope of feeling good about yourself. However, you can never cash your check with them or withdraw money at will, so for everyday life its a mute intention.
After trading foreign currencies for 3 years and seeing every Muslim currency on the world stage available for trading I’ve come to my own personal comfort zone after reading a few scholars and books on the figh of finance. My personal view is to get back as MUCH of MY MONEY AS I CAN so that I DETERMINE how I want to spend it and not how others would like to spend my money with me seeing little to no return on their investments.
I think a passive approach to banking and investment hurts us in the long run because we continue to let them shape the rules of the game. It’s hard to input options if you come to the table with nothing. Therefore, I aim to get all my money back from banks and; then I in return take the money and invest in worthwhile assets for my family. When you float around they barely know your name, but when they see you compounding money, they fear losing your business and you get all sorts of calls to ensure your happiness.
Even if you sit 1 dollar in your account and do nothing with it, you’re STILL helping them (they us you dollar in their quarterly gross statements which investors use to decide if they want to buy more bank stock or not which helps THEM not YOU). Therefore, why not get that money back and invest it in something halal or slide it over to a sharia compliant fund? Why just let them take your money?
Hijabisoverrated-
You are so right–when you rent you are paying interest for someone else. Not to mention the fact that most landlords inflate the value of the property that they are renting. You are locked into a situation where it is very difficult to save. My husband and I live in a pretty nice size apartment now. It has ONE bedroom upstairs with the living room, dining room, kitchen and bathroom downstairs. We pay for the heat, the electric, the gas AND the oil heat plus the upkeep of the grounds.
Today we were looking at a house with 3 bedrooms, basement, living room and dining room that is much larger than our current place with many upgrades. We would pay almost the same thing as our current apartment if not a little more and it would be an INVESTMENT for our future and our families.
My housing counselor advocates moving in with family and friends to save money. We have also thought about working with my brother-in-law and sister in law to build a house together in the past. My goal, insha’Allah, is to have a suite for my parents in my home when they need more aid as they get older.
*sorry to back track, but i did wanto addrss a few things*
Wow,
It truly amazes me when I see Muslims trying so hard to imitate others or to find a “loop hole” in Allah’s(swt) words…
1) Education has been funded PLENTY of times by means OTHER than loans.. umm scholarships, grants and cold hard cash(work and save then go to school. If its worth it to you then you’ll find a way).. there is plenty of money going unclaimed all because people are too lazy to exhaust all other possible means before taking on that which is hated by Allah(swt).. I will say that maybe they were aware of other alternatives.
There is a difference in somebody trying to live in this dunya according to the word of Allah(swt) and somebody flat out KNOWING that they are about to take on riba, I thought as Muslims were are supposed to live in this dunya like a traveler??? What happened to that?
Muslims willing to taking on these mortgages for 20 30 years.. who says you’re even guaranteed to live that long? AND the majority (if not all in the beginning of the loan) of your payment are interest.
When the owner of said mortgage dies who is going be held responsible for that payment? Usually the non working wife. Don’t forget that the upkeep of a home doesn’t stop with the mortgage payment.. There are the property taxes, insurance, water and sewage and all the other bills that come with it. What would be easier for the widowed sister to pay a mortgage or rent?
Muslims need to check the nafs and realize that one doesn’t NEED a house because they have children one usually WANTS a house because they have children. There is a difference.
“I think it’s very sanctimonious and arrogant to attack the character, faith, and practice of another Muslim becuase they made a choice to not subject themselves or their children to substandard living conditions.”
When does renting equate to substandard living conditions??
“I believe Islam encourages us to live within our means not “below” or “above” our means.”
Exactly.. and if you have to take out loans then you’re living above your means. If you don’t have the cash then don’t buy it. Simple..
“I think it’s very self righteous, and hateful to attack the character of another Muslim who has chosen to advance economically, own their own home or just be financially responsible.”
I do agree, no need to attack. .but to advise is our duty as Muslims, especially if ones seems to be doing the electric slide into shaky/haraam grounds. But once you understand what you’re getting yourself into and decide to move ahead, then by all means.
And when does taking loans equate to advancing? Loans equal debt.. Now if you talking liquid funds then that’s something different.. but loans.. not an advance by any means. Being financially responsible is not spending more than you bring in. getting and staying debt free, not plunging further into debt. But maybe that’s just me.
“My personal experience in the Muslim community is that just like in the dunyah there a bunch of “haters”. They are unable or unwilling to have what someone else has so they just dump on them instead.”
True and it seems that you too are perpetuating the same ‘hater’ behaviors. I think the last sentence proves this point. You seem to soo busy looking at and coveting what others have (no matter the means in which they got it) that you are willing to put your soul in harms way. For what really? That house and car can’t come with you and can’t help you in the afterlife?
Bottom line it seems is really look for alternate means when it comes to your finances. Its a slippery slope so inshaAllah be careful