Religion Driven Financial Innovation

The CBC reported this last week: Manitoba Credit Union 1st to Offer Islamic Mortgages.  Here is Assiniboine Credit Union's announcement.

I didn't know until recently that Islam forbade the payment of interest.  Perhaps I have a reader who can point us in the right direction for more information on that.

I don't fully understand how this system isn't effectively paying interest, with it just hidden as a profit payment.  The credit union gets the money it loans to the home owner from a market that is based on interest rates, so the set profit payment would need to reimburse them sufficiently.  It sounds like a fixed interest rate mortgage.  The product seems to have the endorsement of Winnipeg's Imam, though, so it presumably meets the religious requirements. 

What happens if the home owner defaults?  Typically, the bank would seize the house, sell it, take the money that is still owed to them, and the rest goes to the home owner. Can the owner sell the house before the contract period has ended?  Can the owner make accelerated payments to end the contract early?  These are questions that are easily explained and calculated with a typical mortgage and its amortization table (with an interest rate).

I also think it is interesting that this happened in Canada before the United States.