Published January 19, 2022 by Norman Shapiro

A client came to First Israel Mortgages with the following situation; they purchased a property for a large sum of money two years ago.

They were unable toPicture of a mortgage contract obtain a mortgage at the time of the purchase, but the seller was willing to extend a ten-year payment plan.

The terms of the plan included onerous interest rates and the buyer paying a rental fee until the balance was paid in full, but they went ahead with the purchase anyway, expecting that they would soon qualify for a mortgage, pay off the seller and enjoy the property without the burdensome payment terms.

While two years had passed, the banks were still not keen on extending a loan to the sellers. There were issues with the property and issues with the buyer’s credit.

First Israel takes on the project

Not disheartened by rejection, our team took on the project, left no stone unturned and was able to convince one of the banks that our client and the property should qualify for financing.


The approval for a 25-year mortgage with market interest rates was issued.

But that was just the beginning of the struggle!

The purchase agreement included clauses allowing the buyers to pay off any balance due at any time. However, the sellers were not excited about having the balance paid off early, which would leave them without the ‘sweetheart deal’ they had negotiated for themselves.

They fully expected that given the issues involved and the previous failed attempts by the buyers and other brokers to obtain a mortgage that they would reap the benefits of their deal for the full ten years.

So, the sellers did what they could to quash the buyer’s attempt to utilize a mortgage to pay off the debt.

It was starting to get nasty…

First, the sellers rejected requests for them to sign documents required for the mortgage. In addition, the sellers argued that the contract allowed them to enjoy the benefits of the deal for the full ten years even if the debt was paid off. It was starting to get nasty, and it seemed as though the mortgage funding would never happen.

In order to try to break the logjam, First Israel suggested to the buyer to engage an experienced real estate litigator to review the complex issues involved and give their legal opinion on how to proceed.

The buyer agreed and we referred a highly respected litigator, who reviewed the voluminous documents and correspondence and gave our client a clear way of moving forward, which would avoid the time, expense and uncertainty of litigation.

Our client was thrilled

The guidance from the litigator worked, the mortgage was funded and our client was thrilled.

Taking the path of least resistance could have led to many more years of costly battles, penalties and ultimately a client losing the property if they did not get the mortgage funding they needed.

Taking a holistic approach, understanding our client’s needs, assisting them above and beyond our normal realm of services and going the extra mile is sometimes the only way to beat the odds.

For more, see: First Israel’s mortgage services and the current interest rates in Israel.