Bank collapse could affect Islamic mortgage customers

Fri, 28 Oct 2011
The collapse of a bank in Toronto could have a significant impact on the lender's Islamic mortgage customers.

UM Financial partnered with an Ontario credit union to provide Islamic mortgages and other products to customers viewing this approach as an ideal way to make moves in the housing market.

However, the institute's apparent downfall is causing problems for numerous Muslim homeowners who are uncertain with regard to who is in control of their properties .

Omar Kalair, founder and chief executive officer of UM Financial, wrote a letter to clients stating: "We have terminated our investment in your home for the first mortgage."

The industry figure went on to note: "We thank you for your business over the years."

According to the lender, its parent company the UM Group will continue to operate as usual, offering real estate investment, credit card and other financial products compliant with Islamic law.

The news comes after recent suggestions that the popularity of Islamic mortgages could be on the increase.

R Lakshmanan, chief executive officer of Sakana Holistic Housing Solutions in Bahrain, told Arab News that the market is being primarily driven by Gulf Cooperation Council countries.
Salaam-u-Allaikum
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