Jun 29, 2016

Proposed Law: clerks involved in foreclosure cannot buy foreclosed property

It is surprising to me to discover that until now it has perfectly fine and legal for clerks appointed to dealing with foreclosures of properties to purchase those properties for themselves. it seems like a classic conflict of interest. They crack down on a property owner who is in arrears, and instead of being motivated to help get them through it and find solutions, they see a nice piece of property that they can buy for cheap so they crack down hard and foreclose on the property instead of helping the owner to find a way to make payments. I would bet that most clerks probably deal fairly in such situations, but the law allowing clerks to buy the property they are dealing with leaves a big opening for poor decision making.

Members of the Finance Committee of the Knesset is proposing a law that would make it illegal for clerks dealing in foreclosure to buy properties they deal with. They call the discovery of such behavior "the lowest moral behavior that our society has arrived at - if there are no morals, we'll have a law instead".
source: NRG

Even with a law, it will probably be easy to get around. Clerks will tell relatives about such properties, or clerks will share information of foreclosed properties with other clerks - i.e. clerk a will tell clerk b about a property he or she dealt with, and clerk b will tell clerk a about a property in return. Meaning, people will always find ways to get around the law, but such a law will at least solve most of the problem.


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