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All the banks have agreed to a six-month hiatus on collecting mortgage payments from "victims" of the Heftsiba construction company's collapse, at the urging of parliamentarians.

Yesterday the Knesset Finance Committee convened to discuss the painful issue of mortgages that homebuyers continue to pay, although Heftsiba's collapse six months ago left them bereft of any savings and new homes as well.

Finance Committee Chairman Stas Misezhnikov demanded that the banks suspend collection of mortgage payments for six months, both principal and interest. He also demanded that the banks extend the loan terms for a period of time.

"Suspending mortgages by six months is wonderful news for homebuyers," Misezhnikov said. "I have no doubt that the six months will give them breathing space. I hope bank representatives will come to our next meeting bearing good news on other issues too."

The Finance Committee will today be holding another session over the status of Heftsiba's clients.

During yesterday's meeting, a representative of the Bank of Jerusalem claimed it had offered its clients a deal it believed to be superior to suspending mortgage payments. After the meeting ended, however, the bank said it would also agree to suspend client payments by six months.

In addition, the Finance Committee made the unusual demand that the banks themselves pay 30% of the bill for completing construction on Heftsiba projects, for which the homebuyers had paid Heftsiba - but the company neglected to deposit the money it received in designated accounts for the specific projects. The Housing Ministry is also allocating money to complete unfinished Heftsiba projects.

The law states that when a contractor receives money from a buyer for a specific project, the contractor has to deposit that money in a designated account to finance that project, and is prohibited from using the money to fund other works and debts, etc.

However, several banks, including Mercantile Discount, Mizrahi-Tefahot and Jerusalem, opposed the committee's demand. Bank Hapoalim and the First International Bank agreed; Leumi Mortgage bank said it would agree on proviso that other banks also participate in the funding.

Discount Mortgage Bank announced it had offered Heftsiba clients even better terms and rental assistance as part of a deal struck with the special court-appointed manager, Yitzhak Molcho. The Bank of Jerusalem said it offered a separate deal to clients while Adanim Bank also said it reached an agreement with its clients.

At the end of the session, the committee pressed the banks to reach an agreement with Molcho. Also, it urged the Housing Ministry to allocate NIS 25 million, but ministry director-general Haim Fialkoff said the ministry didn't have the money.

The committee also told the banks to give more relief to homebuyers who gave unsecured money to Heftsiba. At present they have to pay 30% of their outstanding debt on the apartments: The committee thinks 10% is enough.

Molcho warned that the committee's demands will ruin the deals he struck with six banks.

A Jerusalem District Court yesterday approved a deal reached by Molcho and Discount Mortgage Bank that would see to the completion of all the building projects that Discount is financing, with bank supervision. Accordingly, a building project in Jerusalem's Har Homa neighborhood and two other projects that include 200 apartments in nearby Maale Adumim will be completed. On Saturday, Mizrahi-Tefahot Bank announced a deal that would allow the completion of four projects comprising over 620 housing-units. Last week, a court okayed the Bank of Jerusalem's agreement over the construction of 428 housing-units in Modiin Illit. Earlier, Adanim Bank reached deals regarding housing projects in the city of Beitar, and Har Homa.