Ministry of Land, Infrastructure and Transport Issues First Disciplinary Action Against Three Appraisers Involved in 'Jeonse Fraud'

Won Hee-ryong "Strong Punishment Including Disqualification"

Three appraisers involved in jeonse fraud have been the first to receive disciplinary actions from the authorities.

[Image source=Yonhap News]

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 23rd that it held an Appraisal Management Disciplinary Committee meeting the previous day and decided on disciplinary and administrative guidance measures for three appraisers.

First, MOLIT imposed a two-year suspension on appraiser A, who issued excessive appraisal reports. From October 2019 to April 2020, A issued nine collateral appraisal reports for villas in Hwagok-dong, Gangseo-gu, Seoul, and was found to have increased the appraisal amounts by excluding similar transactions within the same complex.

Appraiser B received a one-month suspension after it was confirmed that B issued a collateral appraisal report last January by inflating the appraisal value of a villa in Daeyeon-dong, Nam-gu, Busan. The investigation revealed that although there were transaction cases within the same complex and price differences according to exclusive area, B selected high-priced external transaction cases to raise the appraisal value of the subject property.

Appraiser C was investigated for not reflecting reasons for value reduction when issuing a general transaction appraisal report for a villa in Anyang-si, Gyeonggi-do. However, C received only a warning because the appraisal value was not considered higher than the market transaction price.

MOLIT plans to finalize the disciplinary actions in April after notifying the appraisal firms and appraisers involved and collecting their opinions. These disciplinary actions pertain to 11 of the 15 suspected jeonse fraud cases under investigation since last year. Once the feasibility investigation is completed, MOLIT intends to proceed with disciplinary procedures for the remaining four cases and three appraisers.

Separately, MOLIT is conducting a full investigation into 1,203 cases over the past five years where Housing and Urban Guarantee Corporation (HUG) insurance was subscribed through appraisal reports but resulted in guarantee accidents.

Won Hee-ryong, Minister of MOLIT, stated, "It is a betrayal of the public and a dereliction of the appraisers’ fundamental role for certified appraisers to exploit their status to participate in jeonse fraud, causing young people and ordinary citizens to suffer greatly. We will push for stronger punishments, including revoking the qualifications of appraisers involved in illegal activities, by amending laws through parliamentary discussions."