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The Financial Services Commission announced Wednesday it would provide an additional 2 trillion won ($1.78 billion) for issuances of mortgages for stable supply of the loans for the working class by the end of the year.
Conforming mortgages, or “Jeokgyeok Loans,” here issued by the state-run Korea Housing Finance Corporation (HF), have already surpassed the initial supply limit of 16 trillion won, the FSC confirmed.
The announcement came amid mounting public confusion after HF unilaterally announced stricter qualifications for the Bogeumjari Loan and temporary halts of the Jeokgyeok Loan at some banks.
Major commercial banks such as KEB Hana Bank, Shinhan Bank and KB Kookmin Bank have suspended selling the Jeokgyeok Loan to consumers, as the HF hasn’t allotted limits for new issuances in the fourth quarter.
“By the end of the year, the government will provide additional policy funds to supply the mortgages smoothly,” said Doh Kyu-sang, director general of the financial policy bureau at the FSC. “The additional funds will be around 2 trillion won.”
As for scaling back the Bogeumjari Loan, another mortgage program, the FSC official made a public apology that the regulator failed to seek public understanding before the HF announced it.
“It was not part of the government’s household debt management plans,” he said. “In order to reduce confusion, the FSC will make those who have signed housing contracts as of Oct. 18 with plans to get the Bogeumjri mortgage still be able to receive the loan even if demand exceeds the limit.”
The initial limit for Bogeumjari was 10 trillion won, but issuances climbed above 11 trillion won in September. FSC and HF raised the upper cap to 16 trillion won, but the new limit seems breakable soon again.
Despite the scale-back, FSC believes about 57 percent of borrowers eligible for the Bogeumjari under previous qualifications will still be eligible for the program, as they fall into the category of earning 60 million won or less a year and seeking a house priced 300 million won or less.
By Song Su-hyun (song@heralcorp.com)
Conforming mortgages, or “Jeokgyeok Loans,” here issued by the state-run Korea Housing Finance Corporation (HF), have already surpassed the initial supply limit of 16 trillion won, the FSC confirmed.
The announcement came amid mounting public confusion after HF unilaterally announced stricter qualifications for the Bogeumjari Loan and temporary halts of the Jeokgyeok Loan at some banks.
Major commercial banks such as KEB Hana Bank, Shinhan Bank and KB Kookmin Bank have suspended selling the Jeokgyeok Loan to consumers, as the HF hasn’t allotted limits for new issuances in the fourth quarter.
“By the end of the year, the government will provide additional policy funds to supply the mortgages smoothly,” said Doh Kyu-sang, director general of the financial policy bureau at the FSC. “The additional funds will be around 2 trillion won.”
As for scaling back the Bogeumjari Loan, another mortgage program, the FSC official made a public apology that the regulator failed to seek public understanding before the HF announced it.
“It was not part of the government’s household debt management plans,” he said. “In order to reduce confusion, the FSC will make those who have signed housing contracts as of Oct. 18 with plans to get the Bogeumjri mortgage still be able to receive the loan even if demand exceeds the limit.”
The initial limit for Bogeumjari was 10 trillion won, but issuances climbed above 11 trillion won in September. FSC and HF raised the upper cap to 16 trillion won, but the new limit seems breakable soon again.
Despite the scale-back, FSC believes about 57 percent of borrowers eligible for the Bogeumjari under previous qualifications will still be eligible for the program, as they fall into the category of earning 60 million won or less a year and seeking a house priced 300 million won or less.
By Song Su-hyun (song@heralcorp.com)
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Articles by Korea Herald
