Open AccessResidential mortgage crisis - an Islamic finance perspective
Author(s) -
Mostafa Beheshti Seresht,
Hasna Haj Najafi
Publication year - 2014
Publication title -
risk governance and control: financial markets and institutions
Language(s) - English
Resource type - Journals
eISSN - 2077-4303
pISSN - 2077-429X
DOI - 10.22495/rgcv4i2c1art7
Subject(s) - financial crisis , interpretation (philosophy) , shared appreciation mortgage , collateralized mortgage obligation , business , perspective (graphical) , islamic finance , financial system , compliance (psychology) , secondary mortgage market , islam , accounting , finance , mortgage insurance , economics , geography , mathematics , archaeology , computer science , programming language , insurance policy , psychology , social psychology , geometry , macroeconomics , casualty insurance
In this paper, we try to analyze the US residential mortgage crisis in the light of the financial principles of Shari’ah. For this purpose, we will firstly present a summery of the US residential mortgage crisis. Then, in the second part of the paper, we will explore relevant financial principles of Shari’ah law. In this part, special attention is paid to analyze the residential mortgage crisis according to Shari’ah principles and Shia interpretation of Shari’ah through Civil Code of Iran. The main claim is that if mortgage transactions had been concluded in compliance with the principles of Shari’ah law, the whole chain of crisis would not have occurred.