http://www.planetrealtor.com/florida...le=n4-01262006 U.S. Banks expand to serve Muslim community WASHINGTON -- Jan. 26, 2006 -- As the U.S. Muslim population grows -- some studies put it as high as 7 million -- the financial services industry is offering more mortgage and other financial instruments that accommodate Islamic law, which forbids Muslims from paying or earning interest. The largest mortgage company in the country to serve Muslims last year, Guidance Financial Group, based in Reston, Va., announced in mid-2005 that it had provided more than $500 million in home-financing contracts. The company operates in 17 states and Washington, D.C. The most common Islamic-compliant mortgage deal is called a murabaha transaction. The bank buys a property with its own funds, and then sells it to a customer under an installment-repayment plan. The buyer gets title to the property immediately after closing on the agreement. "It's roughly the equivalent of a 30-year mortgage, but you're not repaying us principal and interest," says David Loundy, corporate counsel for Chicago-based Devon Bank, which also serves the Muslim community. "You're simply paying us part of an installment sale." The IRS hasn’t resolved whether Muslim taxpayers can claim an interest deduction on their mortgages when they aren’t technically paying interest. Source: The Washington Verdana,Arial, Tom Ramstack (01/23/06) © Copyright 2006 INFORMATION, INC. Bethesda, MD (301) 215-4688 Sometimes information needs to get out there, for better or for worse. Here are my brief thoughts: 1. If word of this gets around one would expect a sudden increase in the number of Muslims in the US. Who wouldn't want to make extremely low payments on a $250,000 home? Assuming the banks charge a mere 10% for the entire loan, you would have payments equal or less than roughly $765 a month for 30 years. ($250,000 x 1.1 [simplely the original loan of $250,000 plus $25,000 interest for the bank has to make some money] = $275,000 / 30 = $9,166.67 a year / 12 = $763.89 a month) Pretty attractive, in my opinion. 2. How would the banks and IRS know the people were truly Muslim rather than faking it for the fantastic deal? Dishonesty would be very prevelant. 3. What are the unintended consequences of this action? In other words, isn't this discrimination against everyone who isn't a Muslim? After all, if you offer one group that deal then you better offer it to everyone else. Along those same lines, what about those Muslims who got loans in years past and had a high interest rate? Woudl they get reimbursed? These are only questions of which I do not have the answer to but, perhaps, someone else does.