Good afternoon! This is Sujin again. I am coming back with a good news that you will like. Shall we begin now?
As you know, it is too hard to buy your own house these days. Housing price is getting higher and higher every day. Some of my friends have already opened up their accounts for housing application deposit since their early twenties. However, this is not the case for everyone. Unfortunately, many people have not yet prepared that much for their housing. Also, even the housing application deposit is not a completely safe option, as it can never provide 100% guarantee. So, as you’ve heard from the news, lots of people are having trouble with purchasing their own houses. Those people find it hard to pay back their mortgage loans, and become so-called ‘house poor’.
Responding to this depressing social phenomenon, Woori Financial Group introduced ‘trust-and-lease-back’ program. Can you guess what it is? It originates from the previous program ‘sale and lease back.’ The diagram below will help you understand this concept which seems a little complicated.
I will do my best to make this diagram understandable! When payment for mortgage loan is overdue, a trust company is entitled to manage and dispose the house. The trust company gives a beneficiary certificate to the homeowner which is then handed over to a bank. Once the bank is given the beneficiary certificate, there is no more homeowner’s liability owed to the bank. Where about is the previous homeowner going to live in now? The trust company rents the house to the previous homeowner, charging only five percent of the interest payment for rental fee. By doing so, the previous homeowner can still live in the house, without facing any other difficulties of looking for a new house.
I think this system is designed in a way which can really help house poor people. For this system, Woori Financial has already injected KRW 100 billion! We are to see how this system works. I expect many house poor people find this system work for them and housing problem gets eased in the next few years.