Support Plan for ‘House Poor’

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On May 24, support plan for ‘House Poor’ was launched by the financial meeting held by the FSC. FSC Chairman Shin Je-yoon and the chairmen of six major financial holdings discussed the support plan that will help out about 22-thousand households with the benefit of 2 trillion won by the end of the year. At the meeting, the Chairman Shin highly valued finance facilities’ voluntary plans for house poor and stressed their role in enhancing the Korean economy. Now let’s look over how and when House-Poor can benefit from the plans.

First, the workout program by commercial banks will be active from June 16. This workout program is designed for those who are able to repay, but concerned of overdue or under 90 days overdue. Commercial banks will support them to adjust their liabilities, for instance, by revising the terms of repayment and exempting overdue interest. The banks will also help people delay auctions up to six months during which they can sell the house on their own. In this case, if they can sell their house themselves and pay back the interest and the principal, they need not to pay the overdue interest.

Secondly, the sales program of mortgage loan bond will be launched from May 31, by the Korea Housing Finance Corporation. With the ask of revising liabilities, KHFC will buy the mortgage loan bond from banks. After the KHFC will revise the terms of repayment and apply a fixed rate of interest in the hope of relieving borrowers’ burden. This plan is for those whose mortgage is under two hundred million won, and the size of the plan will be within one trillion won in 2013.

Lastly, the Korea Asset Management Corporation will introduce plan to purchase bad debts from May 31. The KAMCO will buy the mortgage loan bond from banks that are overdue more than three months and revise the liabilities with debtors’ permission. The 100 billion won’s pilot project is for those whose annual income is under 60 million won including the spouse’s and housing price is under 600 million won.

As mentioned earlier, the three plans expect to support about 22-thousand households this year. We hope that this help can reach out to more households whose money is tied up in their house, and wish to see the bright outcome by the end of 2013.

Gueran Jeon (gueran.jeon@gmail.com)

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