Books - Blogs - Discussion
BOOKS
Ameen Housing Cooperative of CA, in three books by different authors:
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Pious property: Islamic mortgages in the United Sates By Bill Maurer Page 34
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Being and belonging: Muslims in the United States since 9/11 By Katherine Pratt Ewing –Page 215
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Strategic Planning and Implementation for Islamic Organizations By Rafik Issa Beekun –Page 51
BLOGS
http://www.voanews.com/
At a time when the American economy is buffeted by the aftershocks of a mortgage crisis involving loans at sub-prime rates to consumers with shaky credit, many Islamic investment funds are prospering. They avoid banks, mortgages, and interest-related transactions. And they are attracting non-Muslim investors. "There is no fixed interest rate; it does not matter if the house price goes down or up. At Ameen Housing it is shared by the homeowner and members of Ameen Housing."
http://www.opalesque.com/IslamicFinance_Briefing/?p=1212
Islamically-correct investors faring well during economic collapse
From Abc2news.com: As credit markets have imploded, triggering a global economic crisis, Islamically correct investors have seen a change of fortune: The conservative principles this small group of devout Muslims clung to during the economic heyday has insulated them from the worst of the past year's suffering.
Their renunciation of the interest-based economy kept them away from investments in financial services companies, whose stocks have collapsed, and out of traditional mortgages….. Full Article: Source
http://investhalal.blogspot.
Ameen Housing Co-op, WIEF, IIFF Europe, IFSB conference in Japan, Foreign currency sukuk in Malaysia
An article in today's SF Chronicle provides an in depth look at how co-operatives like the Ameen Housing Co-operative offer Muslim homebuyers Shari'ah-compliant financing. Ameen works using a system similar to ijara-wa-iqtina (lease ending with a sale) where the buyer puts a down payment on the house and then pays a market-based rent. The share of the rent corresponding to the down payment is used to purchase a share of Ameen's ownership of the house. The co-op has also seen conservative Christians (although most users of their product are Muslim) who strictly interpret the Bible's prohibition of usury.
http://www.huffingtonpost.com/
Islamic finance also prohibits selling assets you don't own, selling someone's debt and engaging in high-risk investments. Thus, there was no participation in practices that have been blamed for Wall Street's meltdown: complex derivatives trading, short-selling and the $30 trillion market in credit default swaps.
And I especially liked the news of home owners unaffected by the mortgage crisis, because of the "Islamic requirement that the lender and the borrower share the risks and rewards of a loan," The lender is expected to work every way they can to enable the borrower to get through hard times. The example is from the Ameen Housing Cooperative in San Jose , CA .
Good for them. So they earn less in good times, but are cushioned in bad times. What's finance about, anyway? Creating the community, leading the good life, caring about each other and the planet, that's what. We need more examples of people who make economic practices and profits subject to their values, and not the reverse. Old time religion had some good points after all. We can skip the indulgences, though.
http://thehollytree.blogspot.
Some Things American Investors Could Learn From Muslims
Islamic Principles Help Steer Muslim-American Investors Through Economic Shoals
Ajaz Khan, who heads the Ameen Housing Cooperative in California , explains it as a "partnership."
"There is no fixed interest rate; it does not matter if the house price goes down or up. At Ameen Housing it is shared by the homeowner and members of Ameen Housing."
A member buys shares in a cooperative that purchases many units of housing. Once the member has invested about one third of the cost of a particular house, the fund buys the house, and the member and member's family move in. They pay rent, part of which becomes a return on shareholders' investment, and part of which builds equity in the house until the loan is paid and the member gains full ownership.
Ajaz Khan says that although Islamic fund members make a larger down payment compared to most Americans, they usually own their homes within six years, rather than the 30 years of the most popular conventional mortgage.
Khan says the partnership would not extend sub-prime loans to risky prospects, and thus not face an implosion if loans were not repaid. Nevertheless, he says Muslim investors are plenty concerned about the subprime crisis. That's because worried consumers cut their consumption of gasoline and retail goods – two portfolios in which Muslim investors have lot of stock.
http://www.sfgate.com/cgi-bin/
Housing cooperatives
In San Jose , the Ameen Housing Cooperative has helped roughly 30 members buy homes without mortgages. Yet the recession has had "no impact whatsoever" on the co-op, according to board member Humayun Sohel. The reasons have much to do with an Islamic requirement that the lender and the borrower share the risks and rewards of a loan.
Ameen members pool their money to give out loans. Borrowers put at least 30 percent down, and monthly payments are based on local rental values. Monthly payments pay down debt and pay dividends to Ameen members. In its 13-year history, Sohel said, Ameen has given a quarterly dividend of at least 3.8 percent and as much as 7.8 percent to co-op members.
When the deed of transfer is finally given to the borrower, Ameen members get a slice of the home's increased value - or take a loss if the price has gone down. With the median home price dropping as much as 40 percent in Santa Clara County and many worrying about their jobs, Ameen remains confident.
http://www.guardian.co.uk/
Islamic finance could aid development
Combining social principles with the power to provide financial assistance, Islamic microfinance has huge, untapped potential
A Bank Islam employee holds up what became the first Islamic platinum credit card in South-east Asia at its launch in 2006. Photograph: Tengku Bahar/AFP/Getty Images
Islamic finance is becoming one of the most rapidly growing segments of the global finance industry. There is growing interest from financial institutions in designing Islamic or "sharia-compliant" products and services to attract Muslim investors.
http://qalam.ca/2009/02/09/
Bay Area residents who bought homes through an Islamically compliant lender in San Jose , the Ameen Housing Cooperative, don't have to worry whether their lender will work with them if they lose their jobs. Islamic lenders are required to work in good faith with distressed borrowers to figure out ways to make payments manageable – and co-op leaders say they will. »»» San Francisco Chronicle ( U.S. )
Asalaam Alaikum!
I just came across this article today from a CAIR email I received. Good article:
http://www.whyislam.org/forum/
Here's my favorite part of the article:
Bay Area residents who bought homes through an Islamically compliant lender in San Jose , the Ameen Housing Cooperative, don't have to worry whether their lender will work with them if they lose their jobs. Islamic lenders are required to work in good faith with distressed borrowers to figure out ways to make payments manageable - and co-op leaders say they will.
I just wish there were more Islamic lenders and banks. Until there are, I guess I'm stuck with the same old corrupt system that got us into this mess to begin with.
Peace
The Prophet Muhammad (peace be upon him) said: "The strong person is not the one who knocks others down, but the one who controls himself when angry."
DISCUSSION
n San Jose , the Ameen Housing Cooperative has helped roughly 30 members buy homes without mortgages. Yet the recession has had "no impact whatsoever" on the co-op, according to board member Humayun Sohel. The reasons have much to do with an Islamic requirement that the lender and the borrower share the risks and rewards of a loan.
Ameen members pool their money to give out loans. Borrowers put at least 30 percent down, and monthly payments are based on local rental values. Monthly payments pay down debt and pay dividends to Ameen members. In its 13-year history, Sohel said, Ameen has given a quarterly dividend of at least 3.8 percent and as much as 7.8 percent to co-op members.
When the deed of transfer is finally given to the borrower, Ameen members get a slice of the home's increased value - or take a loss if the price has gone down. With the median home price dropping as much as 40 percent in Santa Clara County and many worrying about their jobs, Ameen remains confident.
- Borrower loses equity
http://www.paklinks.com/gs/
Try Ameen Housing
They are based in the Bay Area. No first hand experience, though. Although, I have heard that they are pretty selective (limited cash), and have high d/p requirements (20%).
A friend of mine financed through Bank of Kuwait (since then the bank moved out of US into UK ). According to him, he had a horrible experience. The house was in the name of the bank, and the person pays rent+principle. The bank had no clue on required insurances and other matters and the person had to educate them every step of the way, and still they were in default most of the time. The 'loan' was much expensive compared to normal mortgages. Fortunately for him, he was able to sell his vested options (he worked for Cisco) and pay off the house as soon as possible.
- Br. Fawzy Ismail in Berkeley Law on 5th July 2010
http://www.law.berkeley.edu/
http://www.law.berkeley.edu/
