|Title||Islamic Mortgages: A Comparative Study to Improve the Legal and Financial System of Mortgages in the Royal Kingdom of Saudi Arabia with a Regulatory Analysis of the US and UK, and Case Analyses of the UK, Sharjah, Dubai and Saudi Arabia|
This research is the first comprehensive critical evaluation of the ways in which Islamic mortgages can be developed and executed in a Sharia compliant manner in order to boost the development of housing markets primarily in Saudi Arabia, with regulatory analyses of securitisation in the US and EU, and case analyses of the UK, Sharjah, and Dubai. The regulatory analyses of securitization show how the excesses of modern financial legal techniques to greatly expand opportunistic developments of mortgagebacked markets led to market failures, and that such market failure could be avoided by the use of Islamic finance principles. These case analyses have been selected to provide a spectrum of different socio-economic contexts in which to compare the Saudi Arabian system. The study also engages in the examination of the Western and Islamic legal systems and their impact on mortgaging and securitisation theory and practice.
Securitisation, namely the activity involving the packaging, dividing and selling of mortgages in the primary market has in recent years become a well-established business process (with banking, financing and legal implications and aspects) for enhancing home financing and home ownership in the USA, the UK and Western Europe, all of which are subject to common law contractual processes. However, it would be natural to suppose that further development of the Saudi Arabian and other Islamic legal systems would include securitisation techniques in the near future. Indeed, certain Islamic finance structures lend themselves to securitisation processes which are investigated in depth in this work.
Banking and financial activities in the Islamic countries are however governed by a mix of conventional practice, common law and Islamic law, with variations occurring in the same between different jurisdictions. This study aims to engage in a detailed comparison of the conventional (Western) banking system and the banking procedures and processes followed in Islamic jurisdictions in order to develop and recommend a
The Western banking system is based upon intermediation between entities that have money and ones that need to use it, the charging of interest and a rational decisionmaking