* The Prophet, Peace be upon him, said: "There will certainly come a time for mankind when everyone will take riba and if he does not do so, its dust will reach him."
* The Prophet, Peace be upon him, cursed the receiver and the payer of interest, the one who records it and the two witnesses to the transaction and said: "They are all alike [in guilt]."
Having worked on getting a Sharia-compliant investment fund set up a few years back, what I recall is that interest ("riba") is specifically forbidden. However, there are structures that can provide the same cash flows as interest but aren't technically interest: example, instead of paying interest on a 30-year mortgage, you just buy the property from the lender in installments over 30 years, etc.
Unfortunately, some of these so called Shariah-compliant transactions are not really. There is heavy debate around them, and as they say, the devil is in the detail.
For instance, my biggest issue with the scheme you mentioned is that, why would a third party come and buy the property and resell it back to you if they did not have an incentive (i.e. they have a buyer already lined up)? And can the contract be conditional that you have to agree that they sell it to you after they buy it? How is the profit rate set? Etc.
There are other schemes which seem permissible (e.g. a group of people agree to buy a house, then they find a renter and split up the rent between them. This way, the risk is spread across everyone, not just the one who owes the loan. The renter can then decide to buy shares of the house along the way). Of course, there need to be scholars who review this since there are small things that can render the agreement non-Shariah compliant.
