Sharia-compliant mortgage lender in receivership

The Toronto Star – October 18, 2011

UM Financial Inc., a Toronto-based firm that offered sharia-compliant mortgages to Muslims, has gone into receivership leaving more than 173 people fearful they may lose their homes. UM Financial was one of the first companies in Canada to offer so-called Islamic financing to Muslims who believe that sharia, or Islamic law, prohibitions against usury include interest on things such as mortgages. UM would buy a property then lease it to a client so they were paying rent instead of interest. Some homeowners complained that the firm would also charge extra fees. The company had $50 million in financial backing from Central 1 Credit Union of which almost $29 million is outstanding.