Good news for young couples: Will competition in the mortgage market expand?/ShutterStock
The Accountant General of the Ministry of Finance and the Capital Markets Authority published today (Sunday) a procedure according to which non-bank credit providers will also be entitled to an exemption from the restrictive conditions applicable within the "discount apartment" programs, an exemption that until now only mortgage banks were entitled to receive.
This is an important step aimed at removing barriers to the entry of additional players into the housing credit market.
As part of the terms of the "discounted apartment" programs - price for the tenant, reduced price and target price, it is prohibited to sell the property during the period from the date of purchase until seven years from the date of winning the lottery or five years from the date of receipt of Form 4. To date, mortgage banks have been granted an exemption from this restrictive condition in cases where They request to realize the property in the event of a failure to repay the credit, even if the event of failure occurs during the period when the sales ban is still in effect.
In order to facilitate the activity of the non-bank credit providers in the housing loan market, the Accountant General together with the Capital Market Authority of the Treasury launched a joint pilot which will examine the possibility of granting such an exemption to non-bank credit entities as well.
A young couple gets a mortgage/ShutterStock
As part of the pilot, holders of a license to provide extended credit or holders of a license to operate a system for intermediation in extended credit will be given the option by the Capital Market Authority to receive an exemption from the restrictive condition for a year, and this after they prove compliance with cumulative conditions such as: a sufficiently large and extensive backlog of credit, specialization in individual consumer credit, documents and procedures Proper work, and other conditions established by the authority in the procedure.
The exemption will be granted after an individual approval process.
The move is expected to make it easier for non-banking credit institutions that wish to enter the real estate mortgage loan market or expand their activities in this area, thereby increasing competition and providing cheaper financing offers to young borrowers.
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"Additional relief for the winners of discounted apartment programs"
Accountant General, Yahli Rotenberg: "The concessions we announced together with the Capital Market Authority will facilitate the entry of non-bank credit providers into the housing loan market and increase competition in this market. This competition is expected to lead to a decrease in interest rates in the mortgage market and relief for first-time home buyers. I am happy and congratulate The cooperation between the Accountant General's Department and the Capital Market Authority".
Capital Market Commissioner Amit Gal: "Comparing the conditions within the "discount apartment" programs to non-bank entities within the framework of the concessions we published together with the accountant general, constitutes another and important step for the improvement of the financial market, which will allow the entry of non-bank credit providers into the field of loans to program winners "A discounted apartment" will thus help increase competition in the housing credit market for the benefit of the general public. The Capital Market Authority, which is responsible for the supervision of non-bank credit providers, will work to monitor and ensure that the loans are given to customers in a transparent and fair manner."
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