The Sages of Neharde’a said: With regard to its halakhic status, this joint venture is considered a half-loan and half-deposit, as the Sages formulated an enactment that would be satisfactory for the borrower, i.e., the manager, and equally satisfactory for the lender, i.e., the investor. Now that we have said that half of the capital is viewed as a loan, it would appear that the manager may use the money in any way he chooses: If he wants to drink alcohol with it, he may well do so, regardless of any objection on the part of the investor. Rava disagreed and said: It is for this reason that it is called a joint venture, as the investor can say to the manager: When I gave the money to you it was to use it for business and not to drink alcohol with it.
(א) באיזה אופן מותר להלות מעות בתנאי שיתעסק בו לריוח.
מלוה אדם לחבירו מנה על תנאי שיתעסק בו לריוח המלוה עד שיהא שני מנים ויהיה באחריות המלוה עד אותו זמן ולכשיהיו שני מנים יחזרו שני המנים למלוה ומשם ואילך יהיה כל הריוח ללוה ובלבד שיתן שכר עמלו עד שיהיו ב' מנים ואם התנה עמו מתחילה אפילו בכל שהוא שהתנה לתת לו בשכר עמלו סגי: הגה והוא הדין איפכא שמלוה לו תחילה לצורך הלוה ואחר כך יעסוק בו לצורך המלוה ונותן לו (בית יוסף):
(1) In what manner it is permissible to lend money on the condition that [the borrower] use it for profit.
A person may lend his fellow one maneh on the condition that [the borrower] use it for the profit of the lender until it becomes two manim. And the risk will be borne by the lender until that time, and when it is two manim, the two manim will revert to the lender, and from that point on all the profit belongs to the borrower, provided that [the lender] pay for [the borrower's] labor until it is two manim. And if he stipulated with him from the outset, even a nominal amount that [the lender] stipulated to give [the borrower] for his labor suffices.
Emendation: And the same rule applies to the opposite: that [the lender] lends him at first for the needs of the borrower, and afterwards [the borrower] uses it for the needs of the lender and gives it to him (Beit Yosef).
מלוה כו'. ...נ"ל דאינו מותר אלא בנותן לו בעיסקא אבל בהלואה אסור...ומה מהני שנותן לו שכר עמלו הא אפילו חצר דלא קיימא לאגרא וגברא דלא עביד למיגר אסור לדור בחצרו...כ"ש שמתנה עמו שיעסוק בפקדונו בשביל הלואתו אף שנותן לו שכר...:
It seems to me that it is only permitted if [the lender] gives it to [the borrower] as an iska, but, if as a loan, it is prohibited...And how does it help that [the lender] pays [the borrower] for his labor? Even in the case of a courtyard that is not being offered for rent, and a person who would not rent it, it is prohibited for [a lender] to dwell in [a borrower's] courtyard...All the more so when he stipulates with him that [the borrower] will use [the lender's] deposit for his loan, even if [the lender] gives [the borrower] payment...
1. The party of the second part hereby acknowledges receipt of the sum of__________________from party of the first part.
2. The party of the second part has accepted the sum of _______________representing 50% of the total sum received from the party of the first part to be held and invested together with all fruits thereof on behalf of the party of the first part.
3. The party of the second part shall invest this sum and all fruits thereof in a prudent and advantageous manner on behalf of the party of the first part in real estate, merchandise, commercial paper, stock, bonds, commodities or other lawful venture, provided that opportunity for lawful and prudent investment presents itself. Title to all objects of value acquired in this manner and of all fruits thereof shall be vested in the party of the first part.
4. The party of the second part has accepted the sum of ______________representing 50% of the total sum transferred to him as an interest-free loan. The party of the second part shall have the right to co-mingle his funds with those accepted on behalf of the party of the first part to the extent that the party of the second part and the party of the first part each shall have equal proprietary interest in any purchase or investment.
5. The party of the second part hereby obligates himself to utilize the funds transferred. Any purchase of a mercantile nature or investment made by the party of the second part, up to the limit of the sum transferred, shall be deemed to have been made with these funds.
6. The party of the second part shall receive from the party of the first part the sum of $1 per month until the termination of this agreement as compensation for his services as agent of the party of the first part.
7. All remaining profits shall be divided equally between the parties. All losses shall be borne equally by both parties.
8. The party of the second part shall be obligated to place any unexpended funds in a safe-deposit box in a chartered commercial bank and to maintain any merchandise, stock certificates or bonds acquired with these funds in his personal possession at all times. The party of the second part obligates himself to indemnify the party of the first part for any losses sustained as a result of failure meticulously to discharge this obligation. Fulfillment of this obligation is to be substantiated only on the basis of the testimony of two persons qualified to offer testimony. Such qualification is to be understood as meaning qualification in accordance with Jewish law as recorded in Shulḥan Arukh, Hoshen Mishpat.
9. In the event of financial loss, the burden of proof shall be upon the party of the second part to consist solely of the testimony of two qualified witnesses as stipulated in the previous paragraph.
10. The party of the second part anticipates realization of a net profit of at least [20%] per annum of the funds held in this manner after deduction of all expenses including compensation of the party of the second part for services as agent. However, the declaration of the party of the second part with regard to the extent of profit, or the absence thereof, shall be accepted only upon administration of a solemn oath before a rabbinic tribunal. Party of the first part hereby agrees to forgive any and all further claims against the party of the second part upon payment of a sum equal to [10%] per annum of the sum transferred in addition to return of the sum transferred.
11. The party of the second part agrees to return the funds accepted under this agreement in _______________ equal installments payable on the______________of each month of the civil calendar. An accounting and payment of any and all profits as provided in the previous paragraph shall be made at the same time.
12. In the event of failure to return any portion of the funds in accordance with the previous section by reason of loss or of non-realization and non-payment of the anticipated profit as stipulated in paragraph 10 the entire sum advanced under the terms of this agreement shall be due and collectible.
13. In the event of any controversy arising out of, or related to, this agreement the same shall be submitted to binding arbitration in accordance with Jewish law by a tripartite panel of qualified rabbis versed in such law. Each party shall be entitled to appoint one member of this panel; the two members appointed in this manner shall appoint the third member of the panel. The award by a majority of such panel shall be confirmed in any court of competent jurisdiction pursuant to the CPLR without any right of appeal therefrom. An action shall be brought before a civil court only in the event of failure of one of the parties to appear before a rabbinic tribunal and only upon leave from a rabbinic tribunal.
Star-K Sample Heter Iska
We, the undersigned have agreed that the monetary agreement between us is a business investment in accordance with the terms outlined by Rabbi Mendel, of blessed memory, as detailed in Nachalas Shivo Chapter Forty.
__________________ (the Investor) has invested the sum of $___________ with ____________________ (the Recipient) to be paid back, plus profit, as was mutually agreed upon by us.
We have agreed to a condition that if __________________ (the Recipient) will give ______ % of the money deposited in his charge per year to _________________ (the Investor), the Investor shall have no further claim to the rest of the profit. The Recipient has been given a wage for his labor.
We have further agreed to use the terms loan, bond, interest or mortgage on this investment in order to expedite the collection of the funds invested and of the profit due to the Investor, through the courts, should the Recipient prove delinquent in paying the same according to this agreement.
The Hetter Iska shall be binding, continuing in nature, and in force between the parties unless revoked in writing and mailed, Restricted Delivery Certified Mail, to all parties to this document.
Cross River Bank's Heter Iska Kelali
By resolution adopted by the management of Cross River Bank, currently located at 885 Teaneck Road, Teaneck, NJ, 07666, we the undersigned hereby obligate the Bank, including all branches and subsidiaries ("Bank"), regarding all Bank transactions (including but not limited to, transactions with individuals or companies that lend funds to the Bank or its agents, or individual or companies that borrow funds from the Bank or its agents, in all forms of credit or deposits, including any obligations, guarantees, mortgages, savings, issuance of shares, any types of stock transactions, any activity or fees arising from any brokerage or escrow transactions) that may in any way violate any law of Ribbis, those funds advanced shall be in the hands of the recipient or obligor ("Recipient") as an Iska as enacted by Chazal ("Iska"), subject to the conditions listed herein. This shall apply even if Bank documents refer to these transactions as loans or interest or compounded interest.
The Recipient shall manage the funds as a Pekadon Iska, regardless of any agreement referring to it as a loan or interest or compounded interest. The Recipient shall be liable for the theft or loss of said funds as a guardian. Ninety-Five percent of the profits shall belong to the Investor, and Five percent shall belong to the Recipient, in consideration for his efforts in managing this Iska.
The Recipient hereby transfers, with the most effective "Kinyan" done in the most effective manner, a share, equal in value to the funds received (to be determined by assessors chosen by the Bank), of his halachically permissible current assets and businesses, to the Investor. The Recipient shall manage said assets and businesses on behalf of the Investor in the manner most beneficial to the Investor. Even if the funds were advanced for a specific purpose, and regardless of the conditions stated in bank documents, the Recipient shall invest the funds received in all of his assets and investments in the manner most beneficial for this Iska. The assets mentioned in the Bank's records shall remain registered under the name of the Recipient, as per Bank regulations. If the Recipient deems it beneficial for the Investor, Recipient may transfer the investments to assets or businesses that the recipient may acquire at a future date.
The Recipient is obligated to prove, in the manner enacted by Maharam, that he managed and invested the Iska in a trustworthy and appropriate manner. The Recipient shall not be believed on any claim of a loss of principal unless verified by two valid and trustworthy witnesses acceptable by Orthodox Jewish Law. Similarly, the Recipient shall not be believed on any claim regarding profits or lack of profits, unless he makes a severe oath in accordance with Orthodox Jewish Law, or unless the claim is verified by two valid and trustworthy witnesses acceptable by Orthodox Jewish Law. It is agreed that the Recipient hereby waives his right to choose a Bais Din; rather the Bank shall have the exclusive right to choose the place and forum of adjudication, provided that it is an established Bais Din.
Regardless of the above agreements regarding the allocation of profits and losses, it is agreed that if the Recipient returns the entire principal of this Iska to the Investor, and, in addition, pays to the Investor the amounts called for by all contracts, notes, and agreements between the Investor and the Recipient, including but not limited to, interest, one time charges or bonuses, points, penalties, benefits, and index charges, as per the schedule of said agreements, and retains the Investor for any services as agreed to between the parties, and in addition, allows the Investor to terminate the Iska by ‘selling’ the note to a party not subject to the Laws of Ribbis, and taking the proceeds in satisfaction of their share of the Iska and their efforts in procuring said ‘purchaser’, then the Recipient shall be relieved of his obligation to provide any verification concerning this Iska, and any additional profits shall belong solely to the Recipient.
It is also agreed, that any payment or benefit that shall be given before the Iska begins shall only be considered a payment 'on account', and if it is established, according to the terms above, that the Investor is not entitled to such payment, it shall be subtracted from the principal. It is also agreed that the Recipient must notify the Investor in writing of any loss or lack of profits by the last business day of the quarter. It is also agreed, that the Recipient is obligated to pay immediately, upon serving notice of losses or lack of profits, the balance remaining, according to the Recipient's claim, of the Iska. If the Recipient fails to comply with this, the Bais Din may rule according to their discretion. Failure to provide said notice shall be an admission that the Iska generated profits, and the Recipient shall not be able to claim a loss or lack of profits for said time period. All this is as enacted by Chachmas Adam.
In the event any Iska is sold/assigned to a party not subject to the Laws of Ribbis, the remainingbalance of the Iska shall be due immediately. However, Recipient may retain the funds provided he obligates himself to the assignee pursuant to all of the terms specified in the loan agreements executed between the Recipient and Investor. All this was decided by the management of the bank with an absolute decision which is binding as per the powers and authority of the management on behalf of the shareholders. This resolution and obligation is binding like any other bylaw of the Bank. No manager or teller, present or future, shall be authorized to lend or borrow, to obligate (the Bank), or to accept an obligation, in a manner that violates or may violate Ribbis or Avak Ribbis. The management of the Bank hereby affirms that this document is legally binding. The management of the Bank hereby authorizes anyone executing documents on behalf of the Bank to execute and incorporate a specific Iska based on this contract, upon the request of a client.
It is specifically agreed that even if, for any reason, the Recipient or Investor is unaware of this Heter Iska, or is ignorant of the entire concept of a Heter Iska, the transaction shall be an Iska as defined by this contract. This is because in accordance with the above resolution, the Bank will not engage in any monetary transactions that are not consistent with Torah and the Rabbinic enactments, and anyone dealing with the Bank does business according to its rules, which requires transactions to be in accordance with this Heter Iska.
From the day this document is executed by the Bank, all transactions shall be exclusively according to the terms of this Iska Contract.
This was all done with a true admission and with a Kinyan Suddar before a Bais Din Chashuv, in a manner that is not an Asmachta, and not in the manner of Tofsay Shtara. This was all done with the most effective Kinyan in the manner that is most effective. It is agreed that any doubt that may arise regarding the interpretation of this document shall be construed in a manner that will uphold this document, and not in a manner that would invalidate it. It is agreed to accept the opinions of any Halachic decisor that upholds this document. In order to give enforceability and strength to all that is stated above, we are recording this agreement, and publicizing before the entire community our enactment and this resolution. The following signature, as authorized by the management of the Bank, is to confirm and to effect a Kinyan on this agreement, here in Teaneck, NJ on the day of August 20, 2015.
Rocket Mortgage's Heter Iska Kelali
I am Jewish and wish to obtain a mortgage with Rocket Mortgage. Does Rocket Mortgage have a Heter Iska that complies with the laws of Ribbis?
Yes, Rocket Mortgage has a Heter Iska that is approved by prominent leading Halachic authorities.
How Does It Work?
For any mortgage loan made to you by Rocket Mortgage as detailed on the note and all other mortgage loan documents that may violate the Laws of Ribbis, the mortgage loan will instead be structured as an investment.
In exchange for the mortgage funds, you will manage your real estate and other Halachically permissible investments in the way most advantageous to Rocket Mortgage, and Rocket Mortgage will share any profits and losses from the investment. Under no circumstances will Rocket Mortgage have any liability above the actual funds advanced. If you make all your payments as provided in the Note, then the Iska terminates and all profits and losses may be retained by you. The Iska will also terminate when Rocket Mortgage sells the mortgage loan to a party not subject to the Laws of Ribbis.
If you have any further questions you may reach us at (800) 863-4332.
