Eun Sung-soo, "Will Ensure No Difficulties in Final Payment Loans for Newly Regulated Areas"

Eun Sung-soo, Chairman of the Financial Services Commission (left), is answering reporters' questions at the Four Seasons Hotel in Jongno-gu, Seoul on the 7th. Photo by Kim Min-young

[Asia Economy Reporter Kim Min-young] Eun Sung-soo, Chairman of the Financial Services Commission, stated on the 7th that he will listen to the voices of those who are having difficulties with balance payment loans among people who received new apartment pre-sale contracts in areas newly regulated by the June 17 real estate measures.

After delivering the keynote speech at the 'Financial Company CEO Invitation Seminar' held at the Four Seasons Hotel in Jongno-gu, Seoul, Eun responded to reporters' questions regarding the supplementary review of real estate measures by Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, saying, "We are also paying close attention to concerns about existing loans becoming difficult due to the designation of adjusted target areas under the June 17 measures," and added, "The main focus will be on ensuring there are no inconveniences or grievances in such matters."

He also added, "Since the policy has changed, the complaints or inconveniences regarding the unexpected changes (in loan amounts) mean that the policy direction is to make things proceed as expected."

The loan-to-value ratio (LTV) for housing mortgage loans on houses priced below 900 million won is 70% in non-regulated areas, but it decreases to 50% in adjusted target areas and 40% in speculative overheating districts. Due to the sudden reduction in loan limits, homebuyers have protested, saying "our funding plans are being disrupted," mainly at bank branches and online.

Earlier, on the previous day, Deputy Prime Minister Hong appeared on a broadcast and said, "We will protect one-homeowners whose LTV has dropped due to inclusion in newly designated speculative overheating districts or adjusted target areas," and added, "We plan to additionally review supplementary measures on the premise that pre-contracted interim payment loans and balance payment loans are part of a continuous process."

On the same day, Son Byung-doo, Vice Chairman of the Financial Services Commission, also hinted at preparing supplementary measures such as balance payment loans by stating, "We are trying to resolve issues within the scope of principles that consistently apply transitional regulations, but if there are shortcomings, we are considering additional measures."