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Heter iskah after closing before first payment

Question:

I just closed a mortgage on a house and still have not made my first payment. Now I found out that it is owned by someone jewish. My broker says he thinks they have a heter iskah and he will check into it. What should I do now??

Answer:

If they have a reliable heter iska, that is great. However if they don’t and you will make one now, you will have to make a kinyan on that heter iska, (pick up the pen of the representative of the mortgage company) because the loan already started, and a kinyan is needed to enable the transaction of the heter iska.

It is important for both sides to understand that the heter iska is changing the nature of the deal that is being done, from a loan to a business partnership, with was once called interest, is now actually profit from a business deal, and the mortgage company now has a limited partnership in the money that was lent to you and in all your other business dealings, with the $50 being their profit.

Another issue here is paying the ribbis for the days until the heter iska is made is problematic, because you may not pay it, and they may not accept it. What can be done for that is that you write a stipulation in the heter iska that the ribbis of the whole first month will be the “profit” of the first half month of the heter iska. Meaning, let’s say that the interest charges per month are $50, so you write that the profit realized by the mortgage company for their part of the business deal will be $50 for the part that is left of the first month, and from then on it is $50 per whole month.

One other point. The profit of the business deal has to be something that is a realistic amount of money to earn on an investment for this amount of money for this period, but if the profits are not a realistic amount to earn then it is obvious that it isn’t a business deal but a loan. Therefore if the profit of the first month which is now only a few days, will be $50, and it isn’t realistic to make that kind of money so quickly with a regular business investment, than this idea will not be valid.  If that is the case, you can request that the old oan be returned and a new loan be given starting from the heter iska date.

Best wishes

Sources:

Y:D 161, Igros Moshe Y:D 2-62, Bris Pinchos 20- 8,12,16,17.

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