Giving help to Riba-based mortgage transactions : facilitating closing attorney in the mortgage lending process

السؤال

Assalamu Alaykum Wa Rahmatullahi Wa Barakatuh, As a practicing real estate attorney, one major aspect of my practice is to close real estate transactions. A typical situation arises (whether it be commercial or residential) when a buyer and / or seller come to my office and request that I help them in "closing" the transaction. They may use my trust account for the deposit that they will be placing to show their good faith in buying the property from the Seller. After this is done, I order survey's to be performed, have inspections performed, and perform a review of the title on the property and issue a commitment which states that I insure that the title to the property is in fact in the name of the current owner and is in fact owned by the current owner without any other interests or claims against the title. On the day of closing I facilitate the real estate transaction between the buyer and seller and make sure documents are executed correctly and collect and distribute funds related to the closing. I also represent the title insurer's interests as I am technically the Title Insurer's "agent" in insuring the title to the property is good until the documents are recorded (Title insurance is a requirement in institutional lending, although it is not required for private lending), and also I represent the lender's interests and I am technically also the lenders "agent" since I have to follow their instructions in regards to what documents need to be signed and what to do with the money they deposit with me. Furthermore, I have to make sure that the buyer and the seller are informed and protected throughout the transaction. There are two issues that are of concern, one is that I witness or notarize most of the documents (including the promissory note and mortgage) and the other is that our trust account (which we cannot play around with) acts as the holding pot for deposits and we are to distribute the funds as instructed to the respective parties (this includes property taxes, insurance premiums, fees for inspection and survey and also at times the origination fees and interest on the first month of the loan for the lenders). I have closed for various organizations which are supposedly "Sharia-compliant" mortgage companies and engage in the same process described above, even as it comes down to collecting the first month of the loan's "profit" (as supposed to conventional "interest") at closing. Although I am convinced that the structure of these "Shari’ah compliant products based on Musharakah (co-ownership / partnership) or Ijaar (lease to purchase) are different than the structure for borrower-lender relationships, in the end many a times I have to convince my clients of the same, even though U.S. regulatory requirements may make them look the same. A prime example of this is that a document called the "truth in lending statement" has to be produced to homebuyers, since an APR (annual percentage rate) and a resulting interest rate must be disclosed to the buyer, even if it is ""profit"" instead of "interest." The bottom line is that I engage in the same process for both types of mortgages. Nevertheless, I am still concerned about witnessing and the fact that the money has to be received and distributed by me. Is my involvement as the facilitating closing attorney in the mortgage / lending process prohibited ? Can you provide any other insights or advise. Jazakum Allahu Khairan for your constant help

جواب الفتوى

أنقر هنالمشاهدة هذا المحتوى

تاريخ النشر

2006-07-31

التخصصات الرئيسية

العلوم الاقتصادية والمالية وإدارة الأعمال
الدراسات الإسلامية

عدد الصفحات

2

نوع البيانات

فتاوى

لغة النص

الإنجليزية

رقم السجل

BIM-788877

• APA
• MLA
• AMA