A customer has filed a class action petition against
Tefahot Israel Mortgage Bank (TASE:
), claiming the bank erred in calculating mortgage payments on a loan taken in the 1980s.
The bank rebutted that its calculations were accurate and that the suit should not be recognized as a class action.
If the court finds for the plaintiff, the suit could come to some NIS 80 million. The individual claim is for NIS 1,944.
The plaintiff claims that the bank failed to fulfill directives published in 1985 by the Housing Ministry regarding reduction of mortgage payments in the first six months of the loan period. He claims that the bank deferred the privilege to the last two years of the loan term.
The directive, issued to all the mortgage banks, was designed to ease the burden of new home-owners, as their mortgages became bloated due to then prevailing high inflation rates. The underlying assumption was that inflation would ebb during the loan term.
The bank's lawyers note that the plaintiff first contacted the bank with his plaint in 1989, and has only now turned to the courts. The bank therefore claims that the statute of limitations therefore applies, in any case, though it insists that its calculations were accurate and that the suit is baseless.