Assalamu alaykum,

I approached an Islamic financial institution to purchase a home. They follow an Ijara model and state that their contracts are Sharia-compliant. I proceeded based on their statement and having also asked some people. However, the process for the purchase raised some concerns in my heart. Please review the steps listed below and let me know if this transaction is acceptable.

The following are the steps that took place:

1) The Islamic institution collected all my financial information and ran a credit check. Shortly after that, I received a letter from a mortgage company stating a loan amount and rate. When I inquired with the Islamic institution, I was told that this mortgage company represents them in my state as they do not have branches in all states.

2) The Islamic institution sent me some paperwork to establish a trust, which includes me, my wife and the Islamic institute. This is the trust that will own the property. We completed the paperwork and the trust was established.

3) As we were about to conclude the deal, I received a call from an agency stating that they were going to send a representative to my home so that we can sign all the closing papers. Again, I was told that this is due to the fact that the Islamic institution does not have a representative in my state.

4) They brought me the papers for closing and there were two batches, one which appeared to be a standard mortgage contract between a mortgage company and the trust that was established in step (2) and the other contract was an Ijara contract between me and the Islamic institution.

5) I was asked to sign ALL papers (both contracts: the standard mortgage and the Ijara contract), since I represent the trust and there is no representative of the Islamic institution in my state.

6) One month after the deal was closed, I received a letter from the mortgage company stating that the loan was sold to another finance company, namely Chase.

7) I own a Chase credit card which I manage online. Shortly after I received the letter in step (6), I noticed that when I login to manage my credit card on the Chase website, I now also see a mortgage loan under my name.

Please advise if this method is acceptable in Sharia (assuming the Ijara loan contract is compliant). If not, what would you advise me to do? Should I seek to refinance with another institution? Do they all deal the same way?

Badr