Leumi Shies Away From Foreclosures After Dankner Outcry

YERUSHALAYIM -

The public outrage that forced Bank Leumi to rethink its 150 million shekel debt write-off for tycoon Nochi Dankner is having positive ramifications for smaller debtors too. 

Bank Leumi has temporarily halted home foreclosures, Haaretz reported on Tuesday.

Critics of the bank noted an eggregious double standard: Almost unbounded generosity for the very rich carrying massive debt, versus a prosecutorial attitude toward the average person who finds himself behind in mortgage payments.

Observing that the angry reaction to the Dankner case had yet to subside, on Monday the bank instructed its lawyers to suspend foreclosure proceedings against defaulting homeowners.

But, the bank warned, the season of forgiveness may not last long.

“At this time, we are behaving with a great deal of caution and sensitivity, and we have instructed our representatives to do the same. It should be emphasized that this does not contradict the fact that we act and will continue to act according to our policy in these matters,” a spokesman for Bank Leumi said.

“Every year, the banks issue between 7,000 and 8,000 eviction orders. In practice the number of evicted borrowers is roughly about 1,000 families,” Ran Melamed, deputy director at the Yedid Association for Community Empowerment, told Haaretz. Yedid offers legal services to borrowers in trouble. Generally, he explained, the banks use eviction orders to pressure the borrowers to refinance their debt.

Also, since the law was changed in 2010, evictions have become rarer. Under the amended law from 2010, banks have to provide alternative housing to evictees for 18 months. They see it as in their interest to revise the payment schedule rather than to bear the expenses of legal action.

Bank Leumi has not become more forgiving, Melamed says. “The bank is doing that for the sake of its image. I wouldn’t advise anybody to wait with their mortgage payment, thinking that the bank will write off the debt.”