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Daily Israel Report

Report: 42,000 Families Can't Make Their Mortgages

Some 42,000 Israeli families are unable to make their monthly mortgage payments, a report said.
By David Lev
First Publish: 5/16/2013, 3:17 PM

homes near Jerusalem
homes near Jerusalem
Flash 90

Some 42,000 Israeli families are unable to make their monthly mortgage payments, and are three or more months behind in their payments, a report Thursday said. The report, in Yediot Achronot, was based on data issued by the Bank of Israel.

Even more, the report said that some 11,000 of those families are considered as regularly behind in their payments, and are at least 18 months behind in their payments. Altogether, some 5% of all Israeli mortgage holders are unable to pay their mortgages on time, the report said.

At that level, Israelis' mortgage payment lateness ranks as the highest among all European economies. In Spain and Belgium, 4% of families are chronically late with their payments, while those numbers are a far smaller 1.7% in France, 0.9% in Britain, and 0.8% in the Netherlands.

Between 1,000 and 2,000 families are evicted from their homes each year for non-payment of mortgages. Banks cannot inform mortgage holders that they are in arrears until at least three, and in some case six, months of non-payment. The process to evict is a lengthy one, with at least three appeals built in.

According to banks, many of the apartments and homes that are subject to foreclosure are in undesirable or peripheral areas, and in many cases the cost of seizing the property could outweigh the payments the bank would have gotten. In most cases, a spokesperson for the banks said, banks prefer to negotiate a new deal with mortgage holders.