In May 2009, a comprehensive reform in the Execution Law, which governs relations between banks and mortgage debtors, came into effect, providing far greater protection for those who are unable to meet mortgage payments. The law had for years allowed the banks to evict mortgage debtors from their homes easily and without many restrictions. The reform of several important elements of mortgage contracts, which was approved in the Knesset in November 2008, was a result of concerted efforts by ACRI and partner organizations to ensure adherence to the right to housing and adequate shelter, as well as the right to live in dignity.
One of the key policy changes of the reform aims at providing evicted mortgage debtors with alternative housing. ACRI stressed in its interventions that some 1,500 families are evicted by the banks from their homes each year. The freedom the banks were given to coerce borrowers into waiving the right to alternative housing in mortgage contracts was rescinded in the reform and thus the provision became mandatory – preventing hundreds of families from being left homeless.
Alternative housing will be provided from now on for a period of up to 18 months in the area where the family originally lived, enabling easier access to places of employment, schools, etc. In exceptional cases, it will be possible to extend the period. As for existing contracts, the amendment will be enforced if it is found that the debtor’s right to alternative housing and the significance of the waiver were not made clear to them.
In addition, the reform states that an eviction order will not be granted except after a hearing in the presence of both parties. The option of using imprisonment as a tool for collecting debts was greatly curtailed by the reform. Imprisonment is now the last resort, and two years from now, the imprisonment of debtors will be cancelled completely for a trial period of two years. Money owed to a debtor from the Housing Ministry as a housing grant toward rent may not be confiscated. All these provide greater protection for debtors and their families, providing them with a safety net when they most need it.
While the reform is a huge step forward, it is not flawless. Some of the tools it provides constitute a violation of the right to privacy; for example, the Execution Office registrars now possess access to data banks to collect information on debtors’ financial means. ACRI continues to closely monitor the implementation of this amendment.
