From the 30th, Confirmed Date Inquiry for Mortgage Loan Review at Woori Bank

'Follow-up Measures for Preventing Jeonse Fraud'

[Asia Economy Reporter Kim Min-young] Starting from the 30th, Woori Bank will be able to verify whether a lease contract (confirmed date) exists during the mortgage loan screening process. This measure aims to prevent cases where landlords secretly obtain mortgage loans from banks before the tenant's move-in registration takes effect, causing the tenant's deposit to be subordinated and not fully compensated.

The Ministry of Land, Infrastructure and Transport, Woori Bank, and the Korea Real Estate Board announced on the 18th that they will sign a memorandum of understanding (MOU) in writing for a pilot project linking confirmed date information to prevent lease fraud and strengthen household loan soundness.

This MOU signing is a follow-up measure to the "Lease Fraud Damage Prevention Plan" announced by the Ministry of Land and related government agencies to prevent lease fraud damage.

Currently, while registrations such as mortgage rights take effect immediately, the tenant's opposability arises the day after the delivery of the house and the completion of resident registration (move-in report). Therefore, if the landlord establishes a mortgage right and obtains a loan on the tenant's move-in registration day, the tenant's deposit is subordinated, causing problems.

To resolve these issues, there have been calls to improve procedures so that during the mortgage loan screening process in the banking sector, the existence of a confirmed date and the amount of the deposit for the collateral housing can be verified before the loan is executed.

The Ministry of Land plans to conduct tests related to providing confirmed date information through a dedicated network connection between the Real Estate Transaction Management System and Woori Bank until the end of January.

From the 30th, a pilot project will be promoted at about 710 Woori Bank branches nationwide, where, with the consent of the mortgage loan applicant (landlord), confirmed date information (deposit, lease period, etc.) of the collateral housing will be checked during the loan screening process before executing the loan.

Kwon Hyuk-jin, Director of the Housing and Land Office at the Ministry of Land, said, "We have made efforts such as revising the standard housing lease contract to resolve problems caused by the opposability arising the day after move-in," adding, "We hope that this pilot project will eradicate tenant deposit damages and that the housing lease contract reporting system will be promptly established."