Posted by: Daryl & Wendy Ashby | December 5, 2010

Ethnic Mortgages

No kidding ! 

Have you ever heard of an ethnic mortgage ?  That is a mortgage that is geared directly to a particular nationality, belief, race or creed ?

Well here it is.

The Assiniboine Credit Union in Winnipeg has launched the first mortgage product in Canada targeting Muslims. (Hopefully, this time next year they will have come out with equal benefits for Buddhists, Christians, Jews and Heathens alike.)

The Credit Union’s presentation goes on to say; “While it may seem incongruous to bring religion into the home ownership equation, paying interest on money is unacceptable according to Islamic law and considered usury by the Qur’an.” (They forgot to take into consideration, that paying interest on borrowed money, at least by my standards, is equally unacceptable.)

“That means practising Muslims have been forced to rent their living accommodation and have missed out on years of double-digit real estate growth both in Manitoba and across the country.”

Priscilla Boucher, vice-president of corporate social responsibility at ACU, said the credit union decided to launch its Islamic mortgage product after seeing the results of a poll of local Muslims. All but four per cent of 500 respondents said it was important that financial products complied with the Islamic faith and two-thirds said a mortgage was a the top of their wish list.

“It was an issue of financial exclusion for the Muslim community,” she said, noting Winnipeg has 13,000 Muslim residents.

Rather than lend money to Muslim clients, ACU instead enters into a “declining partnership agreement” with them. (Sounds like your typical marriage today.) Under its terms the credit union will sell its share of the house to the client over an agreed upon period of time, such as 20 years. The family has exclusive rights to live in the house during the length of agreement and pays ACU a profit in exchange.

Upon completion of the contract, the Muslim clients will be the sole owners of the property.

(I’m confused because it still sounds like a mortgage but only with a different wrapper. Then again, this is Christmas and we all have to right to wrap things up to our own liking.)

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