According to a survey conducted earlier this year, 55% of all Israelis have an extremely difficult time paying their mortgages.

The survey, conducted by the Brain Trust research institute on behalf of The Association for Community Development, found that most Israelis were three months behind in paying their mortgages, although some were due to changing banks and forgetting to transfer the monthly payment.

In general, Israeli banks are extremely hesitant to grant mortgages, usually rejecting anyone who cannot lay down 40 percent of the value of a home as well as those who lack jobs that allow them to cover the cost of a mortgage.  Those who are approved for a mortgage typically spend more than 30 percent of their monthly income on those payments alone.  According to the survey, the number of people who spend that amount is about 37 percent of the country’s population.

However, Yedid VP Ran Melamed said the numbers of those who cannot pay their mortgages has skyrocketed since the end of 2009 and has only continued over the last two years with about to go through foreclosure on their houses.  According to him, the trend is likely to continue so long as the cost of living continues to escalate.

The survey also included foreclosure numbers.  In 2009, some 1500 houses were foreclosed on.  However, the numbers for people evicted from their homes due to foreclosure was not mentioned.  The numbers are significantly lower than elsewhere in the world, especially the US.  The reason for this, according to the survey results and the Yedid group, is that Israelis pay their mortgages before any other bills, such as food, utilities and municipal taxes.

One reason why these numbers are so low is because of laws that require banks to pay evicted residents of a house about $5,000 over the course of 18 months.  For this reason, banks have an incentive to work with mortgage holders to pay down the bills rather than simply evict them.  In addition to this, since those who are foreclosing cannot pay the mortgage, the bank will not get the money from them in any event.