Last week, the Supervisor of Banks published a summary of complaints against banks in 2013. The supervisor's summary reveals much about the areas where banks erred in their dealings with customers. In this article, I will review the mistakes and misrepresentations by banks concerning mortgages. It is important for every customer to be aware of these issues to stand firm against bank officials (mortgage salespeople) who, often out of interest or ignorance, make mistakes and mislead.

It is important for every citizen to know that they have a legal recourse that can compel banks to correct and compensate them in case of error in their conduct.

Examples of justified complaints against banks regarding mortgages

Pre-approval for a mortgage

The client received preliminary mortgage approval from a certain bank. Subsequently, the client approached additional banks to get competitive offers. With these offers, they returned to the first bank. At this stage, the mortgage officer from the first bank did not provide the client with a properly corrected and printed offer, but only verbally and via a screenshot of his computer.

Negotiating with all banks is one of the most important principles for obtaining an optimal loan. How to conduct effective negotiations on this matter has been written extensively on this website and in my book. According to the Bank of Israel directive number 451, the bank Must Provide the customer with a properly printed interim approval on an official document with All  A change in terms, and he is not allowed to suffice with an oral announcement or an improvised document such as a screenshot.

The customer's complaint was found to be justified.

 Bank Refusal of Mortgage After Preliminary Approval

As noted above, a pre-approval constitutes a commitment by the bank (for at least 12 days) to provide a mortgage under the terms specified in the pre-approval.

A bank's client received preliminary approval for a mortgage from the bank. Later, the bank delayed the actual mortgage issuance, claiming the client had a debt being handled by the enforcement and collection office.

Insurance Supervision's response: Before granting the preliminary approval, the customer provided the bank with all the required documents and confirmations, based on which the bank granted the preliminary approval. The customer's debt to the bank is not related to this transaction, and the bank was aware of it prior to granting the preliminary approval. Therefore, even if the preliminary approval was mistakenly granted, Mandatory for the bank To honor him And he is forbidden to delay the granting of the loan.

Conditions for a Letter of Intent

A letter of intent from a bank is a notification stating the bank's willingness to cancel mortgage and all liens on a specific apartment once certain conditions are met. The letter of intent includes, among other things, the client's exact debt amount. Upon providing this sum to the bank, the mortgage is effectively canceled. When selling a mortgaged apartment, a letter of intent is of great importance. A letter of intent is also required when transferring a mortgage from one bank to another. In such a case, the bank has no interest in facilitating the process, of course.

The client complained that the bank requires her to provide a title deed or real estate rights certificate as a condition for receiving a letter of intent.

The Supervisor of Banks' response: A bank may not condition the issuance of a letter of intent on further approvals..

The full document from the Bank of Israel Supervision of Banks

Filing a complaint with the Bank of Israel Supervisor of Banks regarding banks or credit card companies can be done by contacting