FSS launches sector-by-sector review of multiple-home owner loans
Weekly meetings planned... "Responding to a grave matter"
On February 20, the Financial Supervisory Service (FSS) set up an internal task force (TF) to review the status of loans to multiple-home owners by financial sector, moving to respond to the issue. This measure followed President Lee Jaemyung's order the same day to review regulations on extending and refinancing existing loans for multiple-home owners.
The FSS held a kickoff meeting of the "Response to Multiple-Home Owner Loans" TF on Thursday morning under the direction of FSS Governor Lee Chanjin. The deputy governors in charge of banking and small and medium-sized finance are heading the TF, joined by department heads from the Bank Risk Supervision Department, Small and Medium-Sized Finance Supervision Department, Credit Finance Supervision Department, and Insurance Supervision Department.
A senior FSS official said, "Given the gravity of the matter, we intend to activate an internal TF within the FSS."
The TF plans to examine, by financial sector, the status of loans related to multiple-home owners, including individuals who own two or more homes and individual business owners engaged in housing sales and leasing.
The TF is expected to operate by analyzing the status of multiple-home owners across the entire financial sector by borrower type (such as individuals and individual business owners), loan structure (such as bullet repayment or installment repayment), collateral type (such as apartments or non-apartments), and region (such as the Seoul metropolitan area or non-metropolitan regions).
Through this, the TF will identify differences in current regulations, practices, and sector-specific rules, use these findings as a basis to devise improvement measures, and, when necessary, consult with the Financial Services Commission and the Ministry of Land, Infrastructure and Transport.
Given the seriousness of the issue, the TF is reportedly planning to meet on a weekly basis.
Earlier, on February 13, President Lee stated on X (formerly Twitter), "We have given them years of opportunities, even cutting capital gains tax, yet they have held on to their multiple homes without reducing them. Would it be fair to give only them additional benefits by extending their loans?" He thereby raised the need to overhaul systems related to multiple-home owners.
This was interpreted as targeting loans to multiple-home owners who have registered as rental business operators. In this context, market watchers predicted that the government would actively consider reapplying the Rental Income Repayment Ratio (RTI), which serves as a screening standard when extending the maturity of loans to rental business operators.
However, President Lee again pointed out on Thursday, "Why are we only reviewing the RTI regulation? Loan extensions or refinancing after the maturity of a loan are, in essence, no different from new loans."
He went on to say that he had ordered officials to identify the details of loan regulations for new multiple-home owners and to ascertain the current status of loan extensions and refinancing for existing multiple-home owners, and to review robust regulatory measures.
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