The overarching goal of the website is to improve your financial well-being. One of the biggest expenses for a family is housing, and I specialize in assisting with real estate decisions, such as mortgages.

However, sometimes there are other very important issues that I am happy to report on in order to bring about well-being.

This is the pension insurance agent reform. Dorit Salinger, the Capital Markets, Insurance and Savings Authority commissioner at the Ministry of Finance, has approved the pension insurance agent reform. Ms. Salinger is part of the "female power" that Yair Lapid appointed to head almost all of Israel's economic leadership. Unlike in the past when regulators grew within the Ministry of Finance and then looked for high-paying jobs in insurance companies, Ms. Salinger came to the Ministry of Finance after building her career in the business sector.

After years in which every employee could choose which insurance company and insurance product they wanted to save for retirement with, under the current reform, the employee will also be able to choose who their insurance agent will be.

Optin Architect

As strange as it may sound, until today, the employee was tied to the insurance agent determined by the employer. Let's assume there's a small employer with 50 employees (the exact same principle applies to an employer with 500 or 5,000 employees). The employer could transfer one sum per month to the insurance agent they worked with. The insurance agent provided the employer with a "free" service and split the payments to the various pension funds and manager insurance policies of the employees. The problem?

1. There are no free lunches in life. The employer did not spend money out of their own pocket, and the employees paid for the insurance agent's service through the management fees on their pensions, which were split between the insurance agent and the insurance company.
2. Free is no longer enough, so to entice employers to work with a particular agent, the agents could offer additional benefits, such as a discount on the company's car insurance or on the company's office building. You already know who paid for these benefits to the employer.
3. Not all insurance agents work with all insurance companies. Each insurance agent chooses companies with which they will work based on the commission they receive from them for new policyholders. When an insurance company chooses to charge low management fees for a particular product, you can be sure that these specific products will not be offered to clients by the employer's insurance agent.
4. The large insurance agencies that the brokers like are often fully or partially owned by one insurance company or another. The insurance agent is also the employee's advisor on insurance matters. As readers of this blog, you already know what advice from someone who earns more the more they sell is worth.
5. The obligation to pay a commission to the insurance agent has, as stated, caused management fees to be higher. As a self-employed individual, I owe nothing to anyone, and therefore insurance companies offered me exceptionally low management fees on condition that I transfer funds directly to them and not through an insurance agent. Until today, employees were bound, and from now on they will be able to act like me and set up monthly payments directly to the insurance company and thus save on brokerage fees.

Things aren't all roses yet.

The discussed reform affects the cost of living much more than a thousand Milky Cups. However, management fees are a type of hidden cost, and therefore there are no demonstrations or protests because of them. The change currently being discussed was supposed to take effect in 2013 and it did not happen because of the elections.

The reform has passed the Ministerial Committee for Legislation in preparation for the Arrangements Law, which is part of the budget discussions. The reform has not yet been approved by the Knesset, but already many powerful voices of insurance company CEOs are being heard, announcing that employees will be harmed by the move. I remember exactly the same voices from the CEOs of cellular companies who claimed a few years ago that customer service would be severely damaged if competition were introduced into the market dominated by the PCS companies (Orange, Pelephone, and Cellcom). Does anyone remember that we paid 300 shekels a month for a line plus a "free' device and in return for the right to service centers where at any time you could come and hear customers shouting that they were cheated and that the five-page bill was not what they were promised? Personally, I am happy that this "service" was hurt.

I hope the Knesset approves this important reform. I will follow.

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