disciplined approach of marking every home we attempt to finance to the
market. If the investment does not make economic sense based on the actual
market-measured rental rate of a similar home in the same neighborhood,
then we do not proceed with the financing, as explained earlier. It is also
interesting to note that a United Guaranty insurance company representa-
tive came to visit us, asking how we at LARIBA could increase the size of
our portfolio that is insured with them, because our portfolio—based on
their analysis—is one of the best-performing portfolios among the top 64
U.S. companies and banks they underwrite for private mortgage insurance
(PMI, the insurance required by industry standards if the down payment of
the customer is less than 20 percent of the appraised value, as called for by
standards and underwriting requirements). In addition, Bank of Whittier,
which uses the LARIBA Shari’aa-based RF financing model, was rated a
five-star bank (the highest rating by Bauer Financial; http://www.Bauerfinancial.
com) because of its performance at a time when major banks were failing
due to the 2008 economic meltdown.
NOTES
- The Prophet pronounced in the Hadeeth: All deeds are dependent on the inten-
tions (Niyat) and each will realize his/her real intention. - A well-known rule in Shari’aa (mala yudraku Kulluhu la yutraku Julluhu,in
Arabic). - Yahia K. Abdul Rahman and Abdullah S. Tug, Towards a LARIBA (Islamic)
Mortgage Financing in the United States – Providing an Alternative to Tradi-
tional Mortgages, Paper presented at The Islamic Finance Program, Harvard
University School of Law, October 9 and 10, 1998; and Yahia Abdul Rahman,
Mike Abdelaaty, and Gary S. Findley, The Challenge of Offering a LARIBA
Financial Services Window in an American Bank, A Research paper presented
at the Harvard Islamic Banking Symposium, Harvard University, October 1,
1999. - Tarek Diwany,The Problem with Interest, Kreatoc Ltd., London 2003. This is
the most useful and educational book on the problem of charging interest and
paper (fiat) money. The book has published two editions and was translated
into Turkish, Bhasa Malaysian, and Arabic. Dewany is a thought-provoking re-
searcher and a prolific author who disagrees with the approach that uses form
over substance in Islamic banking. - Tarek Diwany’s Web site is http://www.Islamic-Finance.com.
- Ahmad Kamal Mydin Meera,The Islamic Gold Dinar, Pelanduk Publications,
Malaysia, 2002. - For example: Fatwa of Al Baraka, available at http://www.lariba.com/fatwas/index.
htm.
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