As the Iron Sword War enters its second week, many citizens are beginning to feel financial difficulties due to the fact that their businesses are deserted.
Revenue has halted and payments, including mortgages, continue to decline as usual. Despite this, it seems that the banks are still not doing enough for their customers, especially after a year of record profits alongside a difficult year for mortgage borrowers in Israel.
Last week, the banks published a list of benefits and reliefs for their customers, which mainly include options to freeze mortgages (paying interest) and loans (again with interest) and refinancing the mortgage.
While most of the public is preoccupied with the news of the fighting and the alarms, and less concerned with mortgage refinancing issues, the Mortgage Advisers Association has read the fine print and criticized some of what banks call "benefits to the public" through "loan relief," saying that these are mainly intended to maximize profits for banks at the expense of the public's distress. Association Vice Chairman Oren Shalev told us, "In the past, the banks knew how to absorb the interest rate increase, even though the move meant less profits for them. Even today, during this difficult time, we expect real assistance."
It should only be noted that most banks contribute to the residents of the south in other ways through various welcome initiatives.
A particularly poignant post
"Let's clarify something for a moment: What the banks make more money from is not a relief, it's not a benefit, and it's not even a match," Shalev writes on Facebook, detailing: "Freezing a mortgage is not a benefit. It costs borrowers more money. Needless to say, offering recycling is not a relief. What the banks need to do during such a period is a real freeze – that is, those who can't – will not pay this month, the balance of the period will remain the same and the balance of the debt will remain the same, and will not bear excess interest to what it would normally bear. Or in other words - freeze the current mortgage situation and continue from exactly the same point in three months. Isn't that what you thought it was, when they called it a freeze?" he wonders.
Shalev adds in a post that has received hundreds of shares and comments: "This should be given to all residents of the south and reservists, and it should be automatic. No need to ask! Anyone who has a kidnapped person in the family, is not available to call to ask for a freeze. Anyone who is in reserve duty is not necessarily available to call to ask for a freeze, to wait on the line until someone answers..."
Shalev goes on to explain: "A loan at interest is not an ease, it costs the borrower more money! What the bank needs to do is allow people to increase the credit facility without additional interest cost, so that if there is a deviation from the credit facility during this period, the borrower will not pay excess interest on it, and standing orders will not be returned to him or harm his rating and financial ability in the future. And banks should also give interest-free loans to businesses that are currently inactive because of the situation."
In a letter sent this week by the Association to the Banking Supervision Department at the Bank of Israel, the Association demands that pressure be exerted on the banks to provide real assistance to the citizens of the country who have been harmed by the situation, including residents of the south, reservists, and families of fallen, prisoners, and missing persons.
In the letter, the Association notes that "the situation forced on the State of Israel has immediate implications for mortgage borrowers, many of whom, in light of the ongoing economic crisis, are close to the limit of their ability to repay anyway."
Require immediate assistance
In their letter, senior Association officials demand immediate assistance from the Banking Supervision Department on the following issues: not to include the days of fighting within the 24-day period set for a mortgage with the banks, to ease the mortgage freeze, and to provide additional temporary credit of 30 days to enable them to settle payments and absorb the upcoming monthly payment of the mortgage.
Tanks, Iron Swords War, Photo: AP
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