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Ribbit: Matters of Interest

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PURCHASING A HOME UNDER SOMEONE ELSE’S NAME Sometimes, when a person cannot obtain a mortgage using his own name, he may ask a relative to obtain the mortgage for him. We will refer to the person trying to purchase the home as the buyer, and the one obtaining the mortgage as the relative. The relative would then legally buy the house and take out a mortgage under his own … [Read more...]

Ribbit: Matters of Interest

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Cosigning and Similar Concepts It is definitely permitted for a Jew to co-sign as a standard Arev (guarantor) on a loan initiated by a public company. Being that the terms are that the lender will turn to the borrower for payment first, he is considered the borrower and the cosigner is merely guaranteeing the loan in the event of default. On the other hand, an Arev of the … [Read more...]

Ribbis: Matters of Interest

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AREV: GUARANTEEING A LOAN (COSIGNERS) In certain instances, where a home buyer does not meet underwriting criteria, the bank may require a cosigner to guarantee the loan. The current practice of banks is to stipulate that they can collect from either the borrower or guarantor at their own discretion. Such a guarantor is referred to in Halacha as an “Arev Kablan” (equally … [Read more...]

Matters of Interest

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JEWISH MORTGAGE COMPANIES When a person obtains a mortgage from a Jewish lender, a Heter Iska is necessary. However, many Jewish mortgage companies are merely brokers for non-Jewish banks and not the actual lenders. One may obtain a loan through the services of a brokerage company without an Iska agreement, provided that the bank that is providing the funds for the loan is … [Read more...]

Matters of Interest: Ribbit and Heter Iska

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HETER ISKA II There are two basic types of Heter Iska that are written today; one is a “Hatzi Milveh Hatzi Pikadon” (half loan/half investment) and the other is a “Kulo Pikadon” )all investment). As a rule, money for which the recipient takes responsibility, is considered a loan, while money he is not responsible for is viewed as an investment. In a half loan/half … [Read more...]