2008 Fannie Mae/Freddie Mac Bailout…….WHY?
While the news tonight seems to be awash with word about the federal government’s big plans to bail out the Freddie Mac and Fannie Mae financial institutions, we should never let this go…items in bold by me to reflect importance:
A handful of U.S. lenders are working to reconcile the American Dream with the Islamic prohibition against paying interest. According to Islamic law, it’s forbidden to pay and receive riba, or interest. In the past, devout Muslims who wanted to buy a home had to choose between violating a tenet of their religion or permanently remaining a tenant. Now, through programs backed by the Federal Home Mortgage Corp., known as Freddie Mac, and the Federal National Mortgage Association, known as Fannie Mae, several companies have designed special “Shariah compliant” financing options to allow devout homebuyers to have the best of both worlds. Freddie Mac and Fannie Mae, the federally chartered, shareholder- owned companies that buy bundled mortgages on the secondary market, purchased more than $110 million in “halal,” which means “permitted” in Arabic, mortgages. “We got involved a few years ago with American Finance House Lariba in Pasadena Calif.,” said Brad German, spokesman for McLean, Va.-based Freddie Mac. “They developed a financing contract to help observant Muslims who can’t pay interest to finance a home.”