PASADENA, Calif. - On a sunny afternoon, Yahia Abdul-Rahman ignores the
broken air conditioner in his mortgage-finance company's cramped Southern
California office. Around him, three-dozen employees, some of them Muslim
women veiled in scarves, toil amid the rising heat and stacks of paper clutter.
Chief lending officer Syed Rehman, 64, his crumpled white shirt rolled up
to the elbows, is attempting to close a loan in Urdu, the language of his
native Pakistan. In English, he complains that his crowded corner, which he
shares with two assistants, is "boiling."
But the boss, Abdul-Rahman, 60, is as cool as his blue-green eyes. The CEO
and founder of American Finance House-Lariba already has succeeded in two
previous careers, as a chemical engineer and financial planner. Now, he is
creating his legacy in a third: Lariba is among a handful of lenders that
dominate this country's small but growing $600 million Muslim mortgage market.
Governed by the Islamic religion's sharia laws, which prohibit earning or
paying interest on borrowed money, the market is expected to double in the
next few years as American Muslims with conventional home loans look to
refinance with Islamic products.
Lariba's interest-free mortgages resemble lease-to-own contracts. Buyers
build equity while paying rent and principal. One difference: Lariba
homeowners immediately take title while the finance company retains a lien.
Its competitors offer variations.
"We are not run-of-the mill marketing people who find a niche and run with
it," says Abdul-Rahman, elegantly attired in a dark suit and sleek tie. "We
are humble servants of the community."
Under Islam's sharia law, which guides moral conduct, interest-bearing
income and debt are considered sinful. But financing may be arranged to
incorporate negotiated profit margins and fees rather than compounded interest