Banks will not be able to evict mortgage-defaulters without having first made sure that the evictees have alternative housing. 
The Knesset Law Committee has approved for its final Knesset readings a proposed bill that will change the system by which banks grant mortgage loans. The bill states that banks may not evict mortgage-defaulters from the property without having first made sure that the evictees have alternative housing.
If the evictees cannot afford alternative housing, the banks will have to pay for it themselves for up to 18 months - or even more, in extreme cases.
The government's Execution Registrar will have the final say as to whether the evictee can or cannot afford his own alternative housing - and for how long.
Law Committe Chairman MK Menachem Ben-Sasson (Kadima) said, "We have taken a big and important step towards protecting debtors and making sure they are not thrown to the streets... A person's apartment is not only his domicile, but also his self-respect and his security. We must protect these values, and ensure that even financial bodies act in accordance with norms that respect a person's fundamental rights."
The Banks' Position
The Banking Association, which has been in contact with the Knesset Law Committee on this issue for months, summed up its objections to the bill with this statement: "The Knesset is choosing to actualize a worthy social goal by placing the onus on the banks, instead of on the government where it belongs. The result is that the banks will have to pay the housing costs... for people who did not pay their debts."
Committee Counsel Responds
The legal counsel for the Knesset Law Committee provided the other side of the coin, in a talk with IsraelNationalNews: "Our position is that the body that gives credit - loans, in this case - has responsibility to ensure how it gives this credit, to whom it gives, whether the borrower has the wherewithal to repay, how high the payments are, and the like. Banking is not just a regular business; the banks also have obligations towards the public, and must also give proper advice and the like. The recent crisis in the U.S. was caused by banks giving mortgages much too freely. Along with their profits, the banks must also internalize the risks."
The legal counsel added that the banks are not expected to lose in any event: "They will merely up the interest rates for the general public by another tenth or two of a percent. Interest rates always fluctuate and depend on various factors, so this will be just another one... This obligation to find alternative housing might prevent many evictions altogether, as the banks will have an incentive to formulate new terms for the loan."