Upside Down Mortgage

Predatory Lending Practices

Question: Subprime meltdown is vindication of islamic economics?

We know the financial meltdown was caused by predatory lending practices by rapacious financiers, that too to people with bad credit history, in an unregulated environment (called capitalism). Is this a vindication for the interest-free, market based financial system advocated by Islam, in place of the conventional interest-based, banking financial system?

Answer: No, the US model of capitalism is flawed, and the interconnectedness of the international banking system brought it undone. It would work if they used the same rules and regulations everywhere, instead of the "no-holds barred" economic version shoved down everyone's throats by Bush.

In fact I believe it was an act of Congress which mandated that the banks provide low doc loans, in an attempt to fix "housing affordability" for the poor.

In most other countries, they provide grants/assistance directly to the poor. US capitalists hate this because it smacks of socialism. Of course it isn't socialism, merely social responsibility. In the US, they'd rather have their poor living out in the snow.

Good Lending Practices versus Predatory Lending (Spanish)

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