web analytics
March 1, 2015 / 10 Adar , 5775
At a Glance
News & Views
Sponsored Post


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

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.

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.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

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

Comments are closed.

Current Top Story
Prime Minister Binyamin Netanyahu addresses Congress.
Netanyahu addresses the Joint Session of Congress
Latest News Stories
Herzog and Livni at a campaign stop in Tel Aviv.

Herzog, Livni and their media backers have thrown everything at Netanyahu. Voters are not impressed.

Prime Minister Netanyahu speaks to reporters with his wife at his side at Ben Gurion Airport Sunday morning.

He said his mission is “fateful, maybe even historic.”

Israel Air Force attack jet.

The report seems unbelievable, but the newspaper has an interesting track record.

Snow is uniting the American people, so to speak. An area in every one of the 50 states, including Hawaii, will see snow this week, according to the WeatherBell site. This week will be the first time since 2012 that even Florida will see snow. New York is expected to get another 3-4 inches today, […]

A link for the poll is provided below. Deadline is today.

On Thursday evening, students at the Orot Etzion Boys Elementary School in Efrat reenacted different Biblical scenes as part of an interactive live art/Torah exhibition for the month of Adar. Every floor, corner, class and even staircase of the school (think Jacob’s ladder) showed off exhibits and models the students put together by themselves. In […]

The Israeli decision came, according to al-Jarida, in response to U.S. and Iran secret talks—behind Israel’s back—over Iran’s nuclear program.

A proposed law would require the Senate to approve the deal. Obama threatens to veto it.

Free speech is cherished, but hate displays on Sacramento home quite disturbing.

Democrats did not sponsor but also did not try to block the resolution.

The Left-Right division remains almost the same, but a National Unity government is also feasible.

Kerry called Abbas about “financial viability” of the Palestinian Authority and efforts “to prevent a crisis.”

“I Respect the President Barak Obama.” That’s what he said. We don’t know what meant.

Three car accident near Beit Shemesh on Saturday evening. At least 10 injured.

On February 10, Nemtsov wrote in a news website, “I’m afraid Putin will kill me.”

More Articles from Jewish Press Staff
Golan Wine Medals

‘Double Gold’ awarded to 2012 Yarden Heights wine & 2011 Yarden Merlot Kela Single Vineyard.

It captures the love of the Jewish soul as only Shlomo Hamelech could portray it – and as only Rabbi Miller could explain it.

Forever After?
‘Obligated for Challahh and Not Terumah’
(Kesubos 25a)

LIVE – Wednesday, Feb 25, 2015 – Political candidates from the parties battle it out – in English – for your vote.

The evening begins with a dairy reception at 6:30 PM, and the conversations and debate begin at 7:30 PM.

Situated in the south of Jerusalem, the project benefits from one of the city’s most prestigious and desirable locales, nestled in a particularly attractive area between the Talpiot neighborhood and the green groves of Kibbutz Ramat Rachel.

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: