Archives for November, 2007

israeli mortgage

עלייה במכירות הדירות החדשות

Running out of new housing This article has a misleading headline. The bottom line is that there are fewer and fewer new homes. There are more and more people living in Israel, ברוך מקבץ הגלויות! There is a very simple mathematical formula to explain what is happening: More people + less housing = increased home prices. More on this next week. Interest is low, and prices are rising. It is time for prudent investors to consider second homes for investments in Israel....
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banks

Leumi’s turn to show huge profits

Globes wrote about Leumi’s profits today.The news keeps on getting better and better for the banks. The news also isn’t bad for consumers. Key quote from the article:Citi analysts note that the results were driven by stronger than expected net interest income and lower bad debt provisioning.This means that their profits came from genuine banking activities. Banks are supposed to make their profits from interest income. It’s their raison d’être. We should rejoice in profitable banks. Israel’s banks are solvent. This is the most important thing for the average guy. You can be confident that when you deposit money it will be there when you need it. When you take out a 20 year mortgage, you can be confident that your bank will be...
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banks

Good "no-call" by the officials

– ריבית בנק ישראל לחודש דצמבר 2007 Bank of Israel didn’t cave into the pressure. The dollar is too low, inflation is too high, and Bank of Israel made the tremendously difficult decision to do nothing. The banks have been very iffy for the past few weeks. This should reassure them and be good news for our clients. The base interest rate remains 4%. The prime rate remains 4.5%. These are good, affordable levels that are good for the economy, and allow businesses, consumers and even banks to prosper. Israeli Mortgage Advice Every case is different, and you should always consult your qualified Israeli Mortgage Expert....
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banks

Bank Fees

Globes – Bank Fees I was just writing about this very subject last week. Bank fees are a populist complaint that regulators take up because they don’t know how to deal with the real issues.Key quote from the article: “This figure amounts to 2% of the banks’ aggregate revenue and 6% of the banks’ aggregate revenue from the retail segment. “ So 94% of the banks’ revenues (from regular guys like you) are coming from real bank activities, i.e-loans. The botttom line remains the same. The banks are reporting record earnings, quarter after quarter. They warn about the sub-prime exposure, but that’s just a pose to manipulate stock prices. They complain about lost bank fees, but we know that only 6% of...
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banks

Record Earnings for Bank Hapoalim

בנק הפועלים מציג את הרווח השוטף הגבוה בתולדותיו: 826 Bank Hapoalim earned 840M NIS last quarter.Right now it looks like their worst case scenario for the sub-prime scare is aroune 120M. Take a look at my previous post about the manipulations that are happening with the The banks are earning more and more. Here’s another little tidbit: the banks have all of these outrageous fees to blindside the customer. They’re real money is coming from loans that are very profitable for them. For instance, they’ll write down on paper that the fee for whatever is 600 NIS, then only charge you 100 for it. You think like you have a great achievement, and in the meantime the bank is giving you a loan that...
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Bank of Israel to continue publishing representative rate

Bank of Israel to continue publishing representative rate This was actually unexpected. Apparently Israelis don’t trust the commercial banks to give a fair rate. Bank of Israel announced about 8 months that it wanted to stop publishing official exchange rates. They asked the public to comment. Overwhelmingly they requested that the bank continue to publish it. More than this says about the dollar, it testifies to the public’s view of the banks. In the article there is a little something about the bank expecting the dollar to be 4.35 NIS within a year. Interestingly, there is another article about how Igud doesn’t expect any changes.Maybe this is why we don’t trust the banks. The people who actually make monetary policy that are informing us...
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down-payment

How Much House Can I afford?

I’ve surprisingly gotten this question a lot lately. For some reason a lot of people seem to think that you can buy a house like the one in this picture for $50K down. You can’t in Israel If you search the internet for “how much house can I afford” you will get a list of calculators. Here is a great example of one. The problem with all of these is that they are irrelevant to Israelis; in most cases they don’t even give you a good estimate. There are many reasons for this: Israeli underwriting guidelines, Israeli mortgage programs, uncertainty in long-term payments. These calculators are meaningless in Israel. In Israel, it is nearly impossible to foreclose on a property. There are only a...
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