State Comptroller Warns Mortgage Risk Is Rising Because Oversight Lagged Behind Market Changes
State Comptroller Matanyahu Englman warned in a new report that the risk level in Israel’s mortgage portfolio is steadily rising. He said the main drivers include a sharp increase in transactions made through developer financing offers, including the 20/80 model.
The report found that the Banking Supervision Department did not regularly review key lending limits, including the loan-to-value ratio, the repayment burden relative to income, the share of variable-rate borrowing, and the loan term. According to the comptroller, mortgages have become heavier and more dangerous for borrowers in recent years, while regulation and supervision have not kept pace with changes in the market.
Englman pointed to a broader set of failures and problems that are pushing risk higher. These include the growing volume of high-risk mortgages, the expansion of developer financing schemes, limited competition among banks, and the lack of regulation in the mortgage advisory sector.
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