Posted on 08/05/2005 11:39:24 AM PDT by Andy from Beaverton
McLean, VA - Freddie Mac announced today a new initiative designed to help Muslims living in Michigan become homeowners while observing traditional Islamic restrictions on paying interest on mortgages and other types of debt. Developed with Standard Federal Bank and Detroit-based United Mortgage of America, the new initiative enables prospective homeowners to enter into long-term lease-purchase arrangements that permit them to later sell the house and profit from any home price appreciation.
Freddie Mac has agreed to invest an estimated $10 million in the purchase of these new lease-purchase mortgages as part of its Summer of Homeownership campaign. Freddie Mac’s “Summer of Homeownership” is a concentrated effort to pioneer new products, initiatives, and technology that will help expand homeownership opportunities to an additional 250,000 to 400,000 prospective homeowners a year.
“Today’s announcement again demonstrates Freddie Mac’s commitment to help America’s newest communities realize the traditional benefits of the American dream of homeownership,” said Saber Salam, vice president of customer strategies and offerings at Freddie Mac. “By working together with United Mortgage and Standard Federal, Freddie Mac is realizing its promise to foster homeownership opportunities in new and exciting ways.”
Under the initiative, prospective homeowners will work with United Mortgage, which will create a limited liability company (LLC) to purchase homes on behalf of the family. The LLC will purchase the property through a conventional 30-year fixed rate mortgage from Standard Federal Bank. Freddie Mac has agreed to purchase the mortgage.
The prospective homeowner is required to put down 20 percent of the home purchase price and enter into a 10-year lease with an option to buy with the LLC. The prospective homeowner’s monthly rental payments will cover the LLC’s mortgage, tax and insurance payments on the property.
The homeowner may buy the home during the lease term. At the end of the 10-year lease term, the homeowner may extend the lease and purchase option for an additional seven years. The lease allows the prospective homeowner to benefit from price appreciation at any time by exercising the purchase option and then selling the property to a new homebuyer.
“Working with Freddie Mac will enable Standard Federal Bank to serve the growing demand for home financing among Michigan’s observant Muslims,” said Mary M. Fowlie, Group Senior Vice President, Standard Federal Bank. “Today’s announcement underscores our commitment to provide our customers with the opportunity to become homeowners.”
According to Scott Elia of United Mortgage, members of the Michigan Muslim community have been asking for the opportunity to finance homeownership while maintaining their religious convictions. “We have been carefully developing a residential lease and purchase option program and have consulted with the respected scholar, Dr. Muhammad Imran Usmani, our Shariah Advisor, as well as outside legal counsel to develop the model documents and specifications for this program, and to ensure that it satisfies both Islamic principals and secular laws,” added Elia.
Freddie Mac’s agreement to invest in the mortgages underscores its commitment to expand homeownership opportunities for all of America’s households, including the nation’s estimated 2.5 million Muslim households. In March 2001, Freddie Mac became the first major U.S. mortgage investor to back Islamic homeownership when it agreed to buy housing contracts from the Pasadena, Calif.-based American Finance House -- LARIBA. Freddie Mac is also working with other lenders to meet the need for Islamic home financing in America.
Persons interested in learning more about this program are invited to attend an informational meeting on Saturday, August 11, 2001, at the Novi Hilton Hotel between 11a.m. and 2 p.m. The Novi Hilton Hotel is located at 21111 Haggerty Road, Novi, Michigan, north of Eight Mile Road, and west of I-275.
Standard Federal Bank is headquartered in Troy, Michigan and operates 180 Banking Centers, 13 Home Lending Centers and 950 ATMs throughout Michigan, Indiana and Ohio. As of December 31, 2000, the Bank had assets of $20.5 billion and deposits of $12.3 billion. Standard Federal is a wholly owned subsidiary of ABN AMRO North America, Inc.
United Mortgage of America is an assumed name of E & S Financial Group, Inc., a licensed mortgage broker and lender owned by Edward and Scott Elia. United Mortgage is a HUD approved mortgagee located in Farmington Hills, Michigan, offering mortgage loans in Michigan since 1997.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass through securities and debt instruments in the capital markets. Over the years, Freddie Mac has opened doors for one in six homebuyers and more than two million renters in America.
Yes, it's available to anyone crazy enough to want to pay more for their home than they have to.
Exactly what I was thinking. Now where did I put that koran........
Isn't this financial profiling?
I can just see the foreclosure situation here.
A scene straight out of the Middle East.
"We are here at Abdulas home where the evil bank is serving foreclosure papers. The large crowd of hooded young men are chanting "Death to America".....
Lease with option to buy = screwing customer
Do you have a problem with that?
Yes. If you want a bad deal.
If people think these Mohammedans are getting interest free loans, and paying principal only, they're wrong.
The way these things work is that an intermediary keeps the title of the house, and charges the Mohammedan the principal and RENT over and above the principal.
So, instead of paying interest, they pay "rent."
They are not getting a better deal than anyone else. When it's all said and done, it's probably a worse deal, but technically they are not paying any interest.
Is this not totally illegal on so many different levels: Separation of church and state, discrimination, breaking the fair housing clause (by law we cannot discriminate based on blah blah blah religion, ethnicity, sexual preference blah blah blah)?
Freddie Mac’s agreement to invest in the mortgages underscores its commitment to expand homeownership opportunities for all of America’s households,
Gee, will they go out on such a limb for me? Not likely. Isn't that religious discrimination against non-Muslims? Who likes to pay interest?
I take it you didn't actually read the article, then.
The intermediary is not working for free - it's definitely a worse deal. Also they can't take the interest deduction, so it's most definitely a worse deal. But they remain "pure"...
None of the above.
This IMO is good.
The MORE money they pay for their house, less money they have to fund islamic "charities" AKA terrorist finance fronts.
You mean the feral government, doncha?
LOL...so lemmie see if I got this straight. Allah doesn't approve of paying interest, but if you cook the books, call it something else, then Allah is okay with it? Do they really think they are pulling one over on Allah?
Wrong. Institutional racism dominates most college campuses to an extent you can't appreciate from the outside. From job promotions, to appointments, to favored student groups, scholarships, educational programs, speakers, and centers, it is all about being a member of a favored race, gender, and sexual preference.
You take it wrong. And don't doubt that they'll find some way to favor the muzzies, whether they legally are able to or not. This IS a government bunch we're talking about here....you know, "equality for all, unless you're not a member of a protected class, then you can get stuffed."
you are also one of those who don't read the article, just let your assumptions fly, and jump up and down screaming type huh?
Would you rather pay interest, or rent?
Because, that's exactly what these Mohammedans are paying when they choose to not pay interest.
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