web analytics
April 19, 2014 / 19 Nisan, 5774
At a Glance
News & Views
Sponsored Post
Spa 1.2 Combining Modern Living in Traditional Jerusalem

A unique and prestigious residential project in now being built in Mekor Haim Street in Jerusalem.



FEWER FREE LUNCHES

Bank of Israel Restricts Mortgages Severely, Looking to Avert Future Real Estate Crises

The new directive stops banks from giving mortgages with an LTV of more than 70%, with an exception for first-time buyers.
Supervisor of Banks David Zaken

Supervisor of Banks David Zaken
Photo Credit: Yossi Zamir/Flash 90

Share Button

The Bank of Israel’s Supervisor of Banks David Zaken on Monday published a draft directive limiting the loan-to-value (LTV) ratio in housing loans, as of November 1, Globes reported.

The new directive stops banks from giving mortgages with an LTV of more than 70%, with an exception for first-time buyers, who are allowed mortgages of up to 75% of the value of the apartment.

Mortgage customers who buy an apartment for investment will be limited to 50% LTV. The directive will go into effect after a discussion in the Advisory Committee on Banking Matters.

The Bank of Israel announced:

“In recent years, we have seen negative developments in the housing market and the housing credit market. The draft directive has been published against the background of the marked increase in recent years in the balance of housing credit and the increase in home prices in Israel. Recent trends in the housing market indicate an increased number of transactions, an increase in the monthly level of mortgages granted and an increase in investors’ volume of activity, among other things against the background of the low interest rate environment in mortgages.

“These developments impact on the risk level inherent in the banks’ credit portfolio – the accelerated increase in the housing credit portfolio on banks’ balance sheets is liable to include risks to the stability of the banking system, primarily in light of the correlation between the housing credit portfolio and the construction and real estate credit portfolio. These represent, as of June 30, 2012, about 40 percent of total balance sheet credit risk.”

According to the Bank of Israel, many of the recent financial crises in foreign countries began with granting housing credit at terms that did not reflect the risks developing in that market.

The new directive is intended, says the Bank of Israel, to reduce the effects of a crisis in the real estate market by reducing the risk inherent in taking out a housing loan with a high loan-to-value ratio.

Share Button

About the Author:


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

No Responses to “Bank of Israel Restricts Mortgages Severely, Looking to Avert Future Real Estate Crises”

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
FBI Wanted poster for Osama bin Laden
Pakistan Library Renamed to Honor bin Laden
Latest News Stories
FBI Wanted poster for Osama bin Laden

Many Pakistanis consider bin Laden a “hero of Islam.”

Two major obstacles have kept Israel from joining the program: Allegations by U.S. officials that Israel has discriminated against Arab- and Muslim-Americans seeking entry, and a proliferation of young Israelis traveling to the United States as tourists and then working illegally.

A Lebanese man who was arrested in Thailand on suspicion of belonging to Hezbollah admitted to targeting Israelis, Thai media reported.

On Friday afternoon, Syrian fighter jets hit opposition/rebel targets and villages on the Syrian side of the Ramat HaGolan (Golan Heights), in the Quneitra region. Large pillars of smoke are seen rising from struck areas. Quneitra is the site of an official crossing between Syria and Israel on the Golan. IAF jets were sent out […]

As Rabbi Stav said, “You’re free to think what you want. But do you want me to recognize Chelsea Clinton’s child as a Jew?”

Chimpanzees and Orangutans eat Matza, unleavened bread traditionally eaten during the Passover holiday, at the Ramat Gan Safari on Thursday, April 17, 2014. I hope they can digest it. On Passover no leavened bread (Chametz) is allowed in Jewish possession, and that includes food we feed our animals.

Following intelligence reports of further expected Arab rioting and violence on the Temple Mount today, the police have placed restrictions on Muslim entry to the Jewish holy site, according to a report on Arutz-7. Entry will be limited to Muslims over the age of 50, and women, also they must be Israeli citizens or residency […]

PA President Abbas’s refusal to publicly condemn the terror attack that killed Baruch Mizrachi is putting a damper on the parade.

The Shas political party, founded and run by the late Rav Ovadia Yosef, has a appointed a new spiritual leader, according to a Galei Tzahal report. The rabbi chosen to replace Harav Ovadia and be the new president of the party’s Council of Torah Sages is Rabbi Shalom Cohen. Aryeh Deri is the political leader […]

In 1941, the Jews of Kiev received a similar leaflet. When they showed up the next day, more than 34,000 were murdered.

Teen stabbed in South Florida high school.

The Kotel Plaza, the stairs, the Kotel entrance, the roads, everything was packed for Birkat Cohanim – the Priestly Blessing of the People – now imagine if this had been held on top of Har HaBayit, the Temple Mount!

Four Israeli citizens were hurt Thursday in a road terror attack near Tekoa in Gush Etzion.

Israel Police closed access to the Temple Mount to Jews and other non-Muslims on Thursday due to Arab violence.

Jews in Donetsk, Ukraine this week were ordered to “register” themselves and their assets.

U.S. Special Envoy to the Middle East Martin Indyk is on his way back to the region to revive talks between Israel and the Palestinian Authority.

More Articles from Jewish Press Staff

Chimpanzees and Orangutans eat Matza, unleavened bread traditionally eaten during the Passover holiday, at the Ramat Gan Safari on Thursday, April 17, 2014. I hope they can digest it. On Passover no leavened bread (Chametz) is allowed in Jewish possession, and that includes food we feed our animals.

The Kotel Plaza, the stairs, the Kotel entrance, the roads, everything was packed for Birkat Cohanim – the Priestly Blessing of the People – now imagine if this had been held on top of Har HaBayit, the Temple Mount!

Four Israeli citizens were hurt Thursday in a road terror attack near Tekoa in Gush Etzion.

Hebron is proving to be a popular family tourist site during the Passover Holiday.

    Latest Poll

    Now that Kerry's "Peace Talks" are apparently over, are you...?







    View Results

    Loading ... Loading ...

Printed from: http://www.jewishpress.com/news/breaking-news/bank-of-israel-restricts-mortgages-severely-looking-to-avert-future-real-estate-crises/2012/10/30/

Scan this QR code to visit this page online: