[Asia Economy Reporter Song Seung-seop] Online investment finance companies (On-tu companies) are subscribing to insurance related to mortgage loans. This is to provide a kind of safety net to investors who have subscribed amid growing market uncertainties.
According to the financial sector on the 22nd, PeopleFund recently subscribed to Samsung Fire & Marine Insurance's title insurance. The product with title insurance was first launched on the 13th. PeopleFund bears all insurance premiums and incidental costs.
Title insurance is a type of real estate rights insurance. It is an insurance product that certifies and guarantees ownership in the process of real estate transactions. If unexpected situations occur, such as undisclosed senior loans on apartment mortgage bonds or signs of suspected fraud, the insurance company compensates the investment principal.
The 'purchase commitment' condition will also be expanded to more apartment mortgage investment products. When purchase commitment is applied, even if the principal and interest repayment of apartment mortgage bonds is delayed, the investment principal and normal interest for up to three months are guaranteed. This is because an NPL (non-performing loan) company promises in advance to purchase problematic bonds.
To invest in products with title insurance and purchase commitment applied, you must check the application status on the apartment mortgage investment product page.
Loss Risk Reduced from Investment Stage through Insurance Subscription
Daily Funding has also completed a contract with the foreign major company First American Title Insurance Company (FATIC). Since the 6th, it has started launching mortgage loan products with this insurance applied. Daily Funding plans to expand insurance application to all mortgage loan products in the future.
Together Funding has also been offering mortgage loan products with Samsung Fire & Marine Insurance's title insurance applied since early this month.
On-tu companies say that as uncertainties in the real estate market increase, measures to safely protect investors have become necessary. Although subscribing to title insurance or increasing purchase commitments raises costs, it lowers loss risk once from the investment stage, making risk management easier.
Baek Geon-woo, Head of Consumer Finance, said, "(Insurance subscription) is a measure to enhance investment value and attractiveness amid uncertainties in the real estate market," adding, "It is a good opportunity for financial consumers who expect monthly income exceeding rent to experience investment."
Bae Ji-yong, Head of Retail Finance Team at Daily Funding, also explained, "Many On-tu companies are expanding purchase commitments for non-performing loans (NPL) along with subscribing to title insurance," adding, "By preparing safety measures to quickly recover investments in case of emergencies, they are working together to build trust in On-tu companies and expand the market."
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