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The step that will lead to a reduction in mortgages? | Israel today

2022-05-16T10:32:49.619Z

The Ministerial Committee approved MK Yaakov's proposal that the banks be responsible for transferring documents in the event of a mortgage recycling • According to data, only 5% of mortgages in Israel are currently transferred to another bank



Mortgage recycling is moving fast:

This morning (Sunday), the Ministerial Committee approved a preliminary reading of MK Yaakov Asher's (Degel HaTorah) bill, which aims to facilitate the transfer of mortgages between banks. In an internal procedure, when customers will no longer be required to run around the banks in unnecessary and cumbersome topology. 

The bill is also signed by MK Eitan Ginzburg (blue-white) and MK Ron Katz (Yesh Atid).

Its purpose, among other things, is to increase competition in the field of mortgage recycling, reduce costs and reduce fees.

The decision of the Ministerial Committee stipulates that the law will be promoted in advance, and according to the agreement, the Bank of Israel will be required to promote regulations in the spirit of the law within four months.    

On the way to lowering mortgages? 

According to the Association of Mortgage Advisers, barely 20% of mortgages in Israel are refinanced, with 15% of them within the bank and only 5% being transferred to another bank, despite the fact that a large majority of 70% of mortgages are economically viable to recycle.

In the process of mortgage recycling, as the market is run today, the customer is required to physically come to the bank several times, for the purpose of transferring liens, mortgage records, giving instructions on where to transfer the payment between the banks and more.

This is a very cumbersome topology that causes the procedure to become more expensive and to impose unnecessary costs on customers.

According to the bill, the entire process associated with disposing of the old loan on all paperwork and the procedure involved will be carried out in the internal systems between banks, with the accounting and dialogue between the banking systems being more efficient for both banks and customers, reducing bureaucracy and increasing competition.

The customer himself will come to a frontal meeting at the bank only for the repayment and signature status with the repayment of the old mortgage and the receipt of the new loan.

The initiator of the law, MK Asher: "Simplifying the procedure through digitization will allow customers to manage consumers wisely and make effective comparisons between several quotes.

"The bill will also allow the entry into the market of non-banking corporations that naturally suffer from an inferior position because they do not have a network of branches like the banks." 

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Source: israelhayom

All news articles on 2022-05-16

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