"Parties to a Heter Iska typically execute two sets of documents. A Heter Iska is executed to make the transaction permissible from a halachic viewpoint, while traditional promissory note and mortgage are executed to allow the lender to protect his rights in the event that the borrower defaults, and is unable to meet the burden of proof required under the Iska."
"An Iska also contains a nominal ‘management fee’ paid by the Investor to the Recipient for managing the Iska investment. It is typically a one dollar payment, or in the alternative, an extra share of the profits that the Recipient receives for his services. In the typical case that the Recipient does not actually prove the level of profits or losses but rather pays the agreed upon ‘buyout’ fee, the management fee is built in to the settlement amount."
Sounds like lots of loopholes exist in the 'rules'.
Yep, its all optics to fool their God, while still charging being able to charge interest to other Jews.
So interest becomes investment. Investment comes with risks. So additional documents to get rid of the investment. Ultimately its exactly the same as interest payment, but without having to call it an interest.
Yes, but...
"Parties to a Heter Iska typically execute two sets of documents. A Heter Iska is executed to make the transaction permissible from a halachic viewpoint, while traditional promissory note and mortgage are executed to allow the lender to protect his rights in the event that the borrower defaults, and is unable to meet the burden of proof required under the Iska."
"An Iska also contains a nominal ‘management fee’ paid by the Investor to the Recipient for managing the Iska investment. It is typically a one dollar payment, or in the alternative, an extra share of the profits that the Recipient receives for his services. In the typical case that the Recipient does not actually prove the level of profits or losses but rather pays the agreed upon ‘buyout’ fee, the management fee is built in to the settlement amount."
Sounds like lots of loopholes exist in the 'rules'.
Yep, its all optics to fool their God, while still charging being able to charge interest to other Jews.
So interest becomes investment. Investment comes with risks. So additional documents to get rid of the investment. Ultimately its exactly the same as interest payment, but without having to call it an interest.