[Avodah] haaramah

[Zev Sero]

Richard Wolpoe wrote:
> Zev Sero wrote:

>> But it's not a profit-making venture, so from where is the
>> "investor" to be paid his capital and dividend?

> Real este is the largest industry in th US. I fail to see how it is NOT 
> a busineswith a profit. Simple homeowners invest in real-estate all the 
> tie, jsut as they do in their 401(k)'s etc.
> [...]
> So I fail to see how a mortgage or Home equity lone is NOT an investment 
> loan. It's like buying stock on margin. except the SEC requires 50% for 
> stocks and most mortgages only require 20% down which is much more 
> highly leveraged

It doesn't answer the question, because the investor's repayment and
dividend is supposed to come out of the profits the business produces.
A residential house doesn't produce any profits until it's sold (and
it may not do so then either).  Unless you decide that the house belongs
to the "iska", and the "borrower" is actually buying it from the "iska"
in instalments, and paying rent in the meantime.  That could work with
a house, and I suppose it might work with shares too, since I believe
there's a short-term rental market for shares, but then why make it an
"iska", why not just buy it in the "lender's" name, and do the
instalments and rent directly?

And what will you do with a car?  A private car is certainly not a
profit-making business!  And a chasunah doesn't even leave something
that can be sold!  The only way I can see an actual "heter iska" in the
original sense working is if we all agree to pretend there's a business
going on, and the one who claims the emperor is naked has an impossible
burden of proof, even though everyone knows he's right.  I'm pretty sure
that level of sham can't be sustained halachically.  Whereas the KSA's
scheme with the cheques doesn't depend on any business, and can be used
for any purpose.  Ditto for the SA Harav's scheme with the building,
except that you have to actually have a building (or buy one for this
purpose).


-- 
Zev Sero               Something has gone seriously awry with this Court's
zev at sero.name          interpretation of the Constitution.
                       	                          - Clarence Thomas