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Fatwa CenterRiba is the reason for every calamity
Question
Asalaamu'Alaykum,
I have read your Fatwa no. 85223. Can you please clarify further:
I bought a house through mortgage and as you know, the house does not belong to me until the mortgage has been paid in full. In fact the house legally belongs to bank because it can be repossessed by the Bank if anyone defaults on mortgage although it may be in my name.
I with the permission of the bank sold the house while mortgage was still outstanding though I have paid only a small part of it through a repayment mortgage scheme. In the end, I got more money than what I have paid as mortgage - this was due to the higher final sale price of the house as compared to the initial buying price.
I was compensated for the amount of mortgage I paid and felt that the system was fair to me and did not exploit my need which was being done in olden time s when individual lent money to individual and government regulated institutions were not present.
Riba is forbidden for reasons as mentioned in your fatwa which I quote "The reason behind forbidding it is clear. It is consuming the belongings of people without legal right. It also gives the rich people monopoly of all the money and does not help the poor. Also, giving loans with interests results in hatred and enmity between people and it causes severing of relations between them. Islam calls for unity while Riba causes disunity in the single Muslim Ummah. Islam also urges rich people to be compassionate towards poor ones while Riba results in the opposite." In this transaction, I did not experience any of the above mentioned harmful aspects. In the present day of complex economic transactions in which the owner of the house is not established till the mortgage is settled which I have mentioned as above and bad effects are minimised by providing reasonable legal protection to the buyer and terms and conditions are clearly defined before signing the contract then can such transaction still be called Riba?
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
There is no doubt that the transaction which you did is a transaction that involved Riba (interest and or usury). The fact that you were so lucky that you were not affected by the monetary crisis and you sold the house with a higher price than you purchased it, and you were able to pay the debt, then all this does not mean that the bank did not exploit your need. Rather, it exploited your need for the house as it lent you money and took an interest in return for the loan; this is exploitation and not a kind act.
Indeed, we find it very strange of you to try to demonstrate that mortgage is just while the reason for the world monetary crisis and ordeal started with the mortgage. Therefore, the reality proves that those forbidden transactions which involved Riba are harmful.
Indeed, if the same thing that happened to those who were not able to pay the debt happened to you as well, you would have confessed that the bank exploited your need and caused harm to you. Therefore, we advise you to evaluate the reasons which led to the current crisis and you will know then how serious Riba is, and that Riba is the reason for every calamity.
Allaah Knows best.
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