Moshe Wilshinsky – Mortgages

Moshe Wilshinsky

Moshe Wilshinsky: Our Mortgage Expert. Their Mortage Expert. Israel’s Mortgage Expert

As part of our anniversary issue, we are interviewing one of our most experienced experts. Moshe Wilshinsky, our mortgage expert and a 29 year veteran in the mortgage industry, is the CEO of Moville Mortgage and Finance Ltd.

Moshe, what was the joke that summed up the mortgage industry in Israel?
The joke goes like this: If 150 years ago you would have told all the people dreaming of establishing a modern Jewish state in the Holy Land that they could have a country with tremendous achievements across the board, but the politics and the mortgage industry would be very difficult to understand, (nice way of saying meshugah) everyone would have jumped for it. I am just thankful that I am not in politics as well.

Moshe, seriously, what is your experience in the mortgage industry?
I started in the mortgage business in 1985 in California. For the first time in 1990, the Israeli banks started granting mortgages from their own funds. Someone from Misrad Hashikun asked me to get involved in order to help them with an initiative they were working on, and so I became involved in the mortgage market in Israel in 1992. I advised a number of people from four different government agencies with the intent of advancing the mortgage market in Israel through a secondary market. That’s how I became familiar with Israel’s mortgage process along with the senior bank managers, whom I eventually worked together with on consumer credit legislation. Today, at Moville Mortgage and Finance, we utilize that knowledge and experience to assist our clients through the entire mortgage process.

Besides the mortgage market, you have also been involved in the establishment of consumer credit reports in Israel. Can you tell us about that?
After getting involved with the government regarding secondary mortgage issues, I learned that there was no consumer credit reporting industry in Israel. I knew that this was essential for mortgage underwriting (i.e. making proper credit decisions) and other types of consumer credit. The then-current chief counsel of the Bank of Israel and I met at an Inter-American Development Bank conference in the early 90s. He was very gracious with his time, as I explained to him what I had in mind. Eli liked my idea and encouraged me with one warning: My idea would take a long time. A few years later, a Knesset committee was formed to discuss the consumer credit reporting law. I sat in on the committee meetings with other private industry executives over the course of seven years. During that time, I co-founded one of Israel’s first consumer credit reporting firms.

How is getting a mortgage in Israel different than getting one in the US or other Western countries?
There are too many differences to enumerate, most of them relating to the way loans are structured, what is available, and the interactions between the borrower and the bank. Just to give you an idea:
Disclosure: Since the 1970s, the US has expanded disclosure laws to make mortgage terminology more transparent and easier to understand for the consumer. Israel, though it has much more complex mortgage terminology, has far fewer mortgage disclosure laws.

Factors that Affect Lending Decisions: For example, bounced checks in the US are a non-issue, while here, a few bounced checks can negatively affect a client’s ability to get a mortgage. In addition, not all sources of income are equally recognized. The Loan to Value (LTV) or the ratio between the loan amount and value of the property are much more regulated in Israel.

But a major difference nowadays is that the Mortgage Banking Regulations are constantly changing. These changes have material effects on the types of mortgages available and who can qualify. Even veteran Israeli borrowers are often surprised when I tell them that they cannot expect to get a mortgage like the one they received a few years ago, or the way they got one [qualified for one] because it is no longer allowed by regulations (e.g. all adjustable loans for Israeli citizens). This is one of the reasons we feel consumers need to be educated about their options. We feel that an educated consumer is the best decision maker.

What are the main mistakes olim make in Israel when taking a mortgage?
I would have to say that the most common mistake is when an oleh makes assumptions about how much he or she can qualify for or the types of loans available to them. There are a lot more moving parts here and most do not understand the whole picture. Bad decisions can be made which can result in very costly mistakes due to simple misconceptions and failing to fully understand the ramifications of different lending options. This is another reason why at Moville Mortgage and Finance we like to educate our clients and empower them to make their own informed decisions.

What exactly is the role of a mortgage broker?
In America, a mortgage broker acts as an intermediary who literally brokers mortgage loans on behalf of individuals to the wholesale mortgage market and handles the entire process for the borrower instead of the bank. In Israel, the industry is not only in its infancy, but there is no infrastructure, regulations, or industry practice in place to replicate what is done in the US. More so, the term “Mortgage Broker” is used to mean many different things — advisor, filing service, etc. I have seen the market evolve over the past 20 years. Twenty years ago there were “machars.” Usually these were retired bank employees who took 2% of the mortgage for their services. Then, in the late 90s, a few companies evolved and began offering a service which was a step closer to what is being done today. When cheap money was introduced by the US FED in the early part of the last decade, it eventually affected the mortgage market here in Israel. By 2003, the Israeli mortgage banks started offering cheap money very liberally (by Israeli standards at least) and a wave of international and domestic buyers began buying apartments as speculative investments. That is when the current wave of mortgage brokers began. After the crash of 2008, international banking regulations were quickly rewritten (e.g. an international banking regulation know as Basel took  close to 18 years to update and create what became know as Basel II, whereas post-crash, Basel III happened in close to 18 months). This new regulation required the central banker of participating countries to implement regulations along certain guidelines. This has been one of the factors driving the Bank of Israel to implement the regulations that they have been implementing in recent years. Ironically, in a market like Israel where the process, products and rates can vary from bank to bank, the role of a mortgage broker with real experience from the US is needed even more.

Do local banks check the borrowers’ credit reports from their old country?
Yes. Very often a new oleh from the US, Canada and the UK, etc., will be requested to show his credit report and credit score from his country of origin. We can help borrowers obtain that report.

What questions should a person ask his potential mortgage broker before hiring him?
Like the rest of the world, the mortgage market in Israel has become and is becoming more conservative, both in the loans they give and in how they approve loans. That is the nature of the industry the world over; it follows economic cycles. You want to make sure that you have someone with experience who has been through a tight credit cycle before. You also want to make sure that they have the expertise to educate you in making informed decisions, and of course that they provide the highest level of customer service.

What’s the best advice you can give to people looking for a mortgage?
The only way you can make an informed decision is by knowing what your options are and the ramifications of those options. You should ask questions and ideally not assume anything. As in any other important transaction, you should hire a professional expert to take you through the process.

What does Moville Mortgage and Finance offer to its clients?
We offer unmatched experience. Many of our methodologies were developed based on knowledge from the decades of our involvement in consumer credit risk assessment, underwriting and risk based pricing in the US and Israeli markets. We strive to deliver all this to our clients with a passion for customer service. We believe that this is why (with help from Above) we have been able to get better terms even for our client borrowers with excellent financial statuses than their private bankers have offered them. We are also able to obtain loans for borrowers who, in the past, have had challenges qualifying for a mortgage because of their unique situations. Beyond the interest rate and other loan terms, we also do old fashioned “handholding.” We are there to educate, guide, facilitate and manage our clients through what can be a bewildering process.

Moshe, what’s the best way for our readers to contact you?
They should call our main line at 073-796-2226 and press our special 911 Bizness Magazine extension. If they have relatives overseas, they can give them our numbers. In the US: 201-377-3418; in the UK:” 208-596-4501. They can also e-mail us at questions@movillefinance.com and visit our website at www.movillefinance.com.

 

 

Articles By Moshe Wilshinsky – Mortgages

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