Category Archives: Mortgage & Real Estate

Islamic banking: How do we make income on a no-interest loan?

What if we couldn’t assign seductiveness on a loan?

That’s a quandary confronting any financial establishment that wants to offer a flourishing Muslim population. The Quran and Shariah law have despotic manners opposite charging interest, though North Jersey FCU in Totowa, N.J., has found a approach to offer this group.

James Giffin, arch selling officer during a $230-million credit union, remarkable that New Jersey has a large Islamic population. According to a New Jersey Almanac, a Garden State has a second largest commission of Muslims in a race (after Michigan).

“In 2009, we were approached by a members of a internal mosque” — Islamic Center of Passaic County, Patterson, N.J. — “about how we competence offer this community,” Giffin said. “After assembly with a imam, we began a investigate — including articulate to banks in Europe that also offer this segment. We grown lending relations and investment relations with Sharia-compliant companies.”

Islamic Center of Passaic County, Patterson, N.J.

The Islamic Center of Passaic County, Patterson, N.J., approached North Jersey FCU to see if a credit kinship would be peaceful to offer Shariah-compliant loans to a righteous members.

North Jersey FCU launched a Islamic banking products in 2010 — creation it a initial credit kinship in a U.S. to do so.

“We have members of a Muslim village regulating a Islamic checking and Islamic assets products,” Giffin said.

But how does a credit kinship make income on these products? It is tricky.

“[For example,] we make fad fees for home loans,” Giffin said. “We partnered with a Sharia-compliant debt association that is means to make mortgages where we can’t. We could not make Shariah-compliant loans given of a sovereign law [in] a Truth in Lending Act that requires us to list a seductiveness rate on a disclosure.”

Indeed, it is really formidable for U.S.-based financial institutions to make loans that don’t divulge a underlying seductiveness rates. As such, charity Sharia-compliant financial products raises some singular problems.

Giffin explained that a Islamic loans charity here in a U.S. by European banks and unfamiliar companies offer are not “traditional loans,” though rather contain a “lease-to-own” program, hence, no interest.

“That’s given during a finish of a bound time duration a borrower buys a skill for a bound price,” he said. “We are not in a leasing business. For us to issue a possess loans we would have to buy a skill on seductiveness of a member afterwards franchise it to them for 20 years. The same beliefs work with automobile loans where we are leasing a automobile to a member with a $1 buy-out during a finish of a franchise period.”

Mosque in Clifton, NJ

This mosque in Clifton, N.J., serves a burgeoning Muslim race in a area.

Of North Jersey FCU’s approximately 27,000 members, about 1,500 are estimated to be Muslims — and not all are mindful of Sharia law, Giffin noted. “It is a righteous that [follow] a stricter rules,” he said.

In sequence to foster and publicize these Islamic banking products, North Jersey FCU has a mobile bend it takes to a internal mosque and park outward on Fridays so it will be manifest when Muslims came out from afternoon prayers. “We are means to open accounts on a spot,” Giffin said.

North Jersey FCU also skeleton to enhance a Islamic banking division, he added.

At slightest one other U.S. credit kinship offers Islamic-compliant loan products — a $770,000 Jafari No-Interest Credit Union of Houston, Texas, that was designed for Jafari village members opposite a United States. (Jafari is one a 5 schools of Islamic thought.)

Launched in Feb 2016, this credit kinship has about 210 members.

Jafari No-Interest CU explains on a website that it can work but charging seductiveness given a handling losses and net value (capital) are saved by member comment fees (which volume to $3 per month), as good as additional intentional fees paid by members, and donations.

Operating losses are kept during a smallest by regulating donated bureau space and proffer staff. Jafari No-Interest CU pronounced a annual losses sum about $36,000, essentially for IT systems ($15,000) and ACH ($7,000).

As of Sep 2017, Jafari No-Interest CU had $560,000 in deposits; and $167,000 in loans issued. A sum of $56,700 in seductiveness payments have been avoided on these products, it added.

However, some restrictions do apply: deposits and withdrawals are authorised usually by ACH; and Jafari No-Interest CU offers no ATM services, no debit/credit card, and no checking services.

Imran Dhanji, boss and CEO of a credit union, told Credit Union Journal by email that it now it usually offers “refinancing of automobile loans and tyro loans. Most of a loans are for tyro loans.”

Still, according to a website, Jafari No-Interest CU skeleton to eventually enhance a product portfolio to “include no-interest loans for tiny business and college tuition, tiny loans for village members in financial hardship to equivocate high seductiveness payday/title loans, and leasing for cars and equipment.”

A series of credit unions in other western countries also offer Sharia-compliant loans.

Assiniboine Credit Union Canada of Winnipeg, Manitoba, has been charity “Islamic” mortgages given 2010.

The credit kinship explained that this loan is formed on a common tenure judgment called “musharaka” and is accessible for a squeeze of an existent skill for use as a primary chateau within Manitoba. The borrower enters into a partnership agreement with Assiniboine called “The Declining Partnership Agreement.” Under this deal, a borrower agrees to make unchanging payments to boost his or her share of a skill and for a right to occupy a home.

“During this time, a family has disdainful rights to live in a home and in sell they determine to compensate [Assiniboine] a profit. At a finish of a agreement a Muslim family is a solitary owners of a home,” Assiniboine pronounced in a press release.

Craig Peel, clamp president, sales and use during Assiniboine Credit Union told Credit Union Journal a credit kinship has some approximately 40 Islamic mortgages to date. “We do not have any other Shariah-compliant products,” he added.

Across a Atlantic in Great Britain, London Community Credit Union, that is formed in a heavily Muslim East End of London, pronounced on a website that it is “currently questioning a awaiting of charity an Islamic form loan formed on Shariah law.”

Brian Branch, WCOCU

Brian Branch, a boss and CEO of WCOCU

In a summer of 2013, a World Council of Credit Unions published a request called “Islamic Finance Manual: Operating Policies and Procedures for Credit Unions,” as a beam to substantiating Shariah-compliant credit unions in a building world, starting in Afghanistan.

“We have worked with or are wakeful of Islamic banking-based, Shariah-compliant credit unions in Iran, Indonesia, Malaysia, Kenya, United Kingdom and Australia in further to Afghanistan and a U.S.,” Brian Branch, a boss and CEO of WCOCU, told Credit Union Journal. “In a general context we have found that Islamic banking beliefs are practical good to a mild structure of credit unions.”


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People on a move: Nov. 17



New American Funding has named Virginia Martinez as informal sales manager to cover a Southern California marketplace from a Central Coast to Coachella Valley.

She will manage a daily operations of a segment while concurrently operative to enhance a domain with a opening of new branches.

Martinez brings to a association some-more than 25 years of debt banking experience.



AmeriSave Mortgage Corp. pronounced that Robert J. Smith has supposed a company’s offer of a position of president, replacing Ed Abufaris who recently announced he was withdrawal a company.

Smith assimilated AmeriSave on Nov. 1 and will be allocated boss following receipt of required regulatory approvals.

Prior to fasten AmeriSave, he was a inhabitant operations executive for BNY Mellon’s debt organisation and before that, he was boss of Discover Home Loans.



Mortgage Network Inc. pronounced that Sean Doucette has assimilated association as a debt loan officer portion a executive Maine area.

Doucette brings some-more than 15 years of banking and debt knowledge to Mortgage Network.

Most recently, he served as loan begetter for Key Bank and before to that managed Northeast Bank for 10 years.



AmeriFirst Home Mortgage, a multiplication of AmeriFirst Financial Corp., has hired Patrick Mars as an area manager and loan officer in a Winter Park, Fla., branch.

Patrick Mars

Mars brings scarcely 20 years of knowledge to a role, including portion as sales manager during GMAC Mortgage from 1998 to 2008.

He will be charged with flourishing marketplace share via Central Florida while running clients via a debt process.



Pendo, a inhabitant estimation government company, pronounced that Paul Wholley has been hired as clamp boss of sales, obliged for heading a company’s inhabitant sales team.

Wholley joins Pendo after spending a final 5 years during First American Mortgage Solutions in a inhabitant and midmarket division.

In addition, Steve Rouse has assimilated Pendo’s sales group as informal comment executive for a Midwest.

He comes to Pendo with some-more than 25 years of debt attention knowledge after operative with companies such as Verus, First American Mortgage Solutions and Credit Suisse.

Are we a debt veteran who recently altered jobs? Let us know! Send your proclamation and print (if available) to Glenn McCullom during


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Long Island home prices arise as register dips

Long Island genuine estate prices climbed final month, as buyers got into behest wars over a shrinking supply of homes.

In Suffolk County, homes sole for a median cost of $360,000 in October, adult 6.2% from a year earlier, a Multiple Listing Service of Long Island pronounced in a news expelled Thursday.

Nassau County homes traded for a median cost of $500,000, adult 6.4% from a year earlier.

Throughout a Island, there were 11,395 homes listed for sale final month, down 12% from a year earlier. The series of sealed home sales increasing year-over-year by 5.7% in Suffolk and by 1.5% in Nassau.

“The buyers are profitable full cost and infrequently over full price,” pronounced Jerry O’Neill, owners of Coldwell Banker Harbor Light in Amity Harbor. “It’s a good time for sellers to come to market.”

Long Island home prices rise

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Home prices have posted year-over-year gains scarcely each month for a final dual years. However, it’s an open doubt either that trend will continue if sovereign lawmakers extent or discharge Long Islanders’ ability to concede state and internal taxes, internal genuine estate experts said.

Such deductions reduce a cost of homeownership. Without them, buyers would need to trim their budgets, they said.

House Republicans voted Thursday to pass their chronicle of a $1.5 trillion taxation overhaul. The magnitude would finish a deductibility of state and internal income taxes though concede deductions for skill taxes adult to $10,000. The Senate chronicle eliminates all state and internal taxation deductions.

The House chronicle also reduces taxation breaks for debt interest. The magnitude allows homeowners to concede seductiveness paid on mortgages adult to $500,000, half a stream limit. The Senate check creates no change to a debt seductiveness deduction.

If Long Islanders’ ability to concede state and internal taxes — and presumably debt seductiveness — on their sovereign earnings gets curtailed or eliminated, “it’s going to be a vital taxation boost on New Yorkers,” pronounced Stephen Breitstone, who heads a private resources and taxation organisation during a law organisation Meltzer, Lippe, Goldstein Breitstone in Mineola.

Such changes “could have broad, unconditional mercantile consequences for Long Island and beyond,” he said.

If those deductions are cut, home prices could turn off or even decline, as buyers emporium for lower-priced homes or confirm to lease or pierce to a lower-tax state such as Florida, pronounced Irwin Kellner, an economist formed in Port Washington.

But O’Neill, a attorney in Amity Harbor, pronounced other elements of a due overhaul, such as reduce taxation rates, could put some-more income in home buyers’ pockets.

Homeowners “are saying, ‘oh, this is going to harm if we can’t concede that anymore,'” he said. But, he said, “they might benefit on some of a other pieces of a reform.”


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