Q: Is it permissible to take a mortgage from a Jewish mortgage broker or a Jewish-owned mortgage company?
A: Although a Jew may not lend another Jew with interest, it is permissible for him to serve as a loan officer in a non-Jewish bank, since it is clear that the money is not his and he is serving only as agent. Similarly, it is permissible to take a mortgage through a Jewish mortgage broker, if the mortgage capital is provided by a non-Jewish bank (or a Jewish bank with a heter iska), and the broker is serving only as a mediator. This is permissible even if the broker takes a fee for his services. (Y.D. 163:23-24 and Shach 71)
Mortgage companies, on the other hand, often grant the loan from their own capital and afterwards sell the mortgage to a bank. In this case, it is not permissible to take a loan from a Jewish-owned mortgage company, unless they have a heter iska. This is because the loan is initially granted by the Jewish-owned company with a stipulation of interest, and also because they maintain the loan for a short time. A person considering taking a loan from a mortgage company should first verify its ownership. (The Laws of Rabbis, R. Reisman, 13:24-25)
Authored by Rabbi Meir Orlian
These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute (www.businesshalacha.com) and is under the auspices of Rav Chaim Kohn.
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People don’t realize how serious the need for a proper heter iska is, not just downloading a copy of the web and filling in the names. Its a document that needs to hold up in a bais din and if there is one mistake etc then it the whole loan will be disallowed,would you download a contract of the internet and use it without haveing an attorney review?