Byeon Chang-heum, Funding Apartment Purchase in Bangbae-dong with Credit Card Loans... 'Yeongkkeul' Buying?

Minister of Land, Infrastructure and Transport Nominee Byeon Chang-heum Photo by Yonhap News

[Asia Economy Reporter Lee Chun-hee] Allegations have been raised that Byeon Chang-heum, the nominee for Minister of Land, Infrastructure and Transport, made a so-called 'all-in' purchase when acquiring an apartment in Bangbae-dong, Seocho-gu, Seoul, where he currently resides.

Song Eon-seok, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, claimed on the 10th that after checking the registration certificate of the Bangbae-dong apartment owned by nominee Byeon, he received a loan of about 300 million KRW from a credit card company when purchasing the apartment in 2006. This amount corresponds to 57.4% of the purchase price at the time, which was 523 million KRW.

According to the registration certificate of the apartment owned by nominee Byeon, investigated by Assemblyman Song, Byeon purchased a 129.7㎡ (exclusive area) apartment in Bangbae-dong, Seoul, in June 2006 for 523 million KRW. Shortly thereafter, a credit card company set a mortgage with a maximum claim amount of 360 million KRW.

Assemblyman Song stated, "Considering that the maximum claim amount is usually set at 120% of the loan amount, it is estimated that nominee Byeon borrowed about 300 million KRW," and added, "he succeeded in acquiring a home by financing about 60% of the house price through a loan."

The Seocho-gu district, where nominee Byeon's house is located, was designated as a speculative area in 2006. Accordingly, the loan-to-value ratio (LTV) for mortgage loans through commercial banks was 40%. However, savings banks allowed up to 60%, and credit card companies and capital companies recognized up to 70% LTV. Assemblyman Song pointed out, "It is presumed that nominee Byeon chose a credit finance company instead of a bank to receive a larger loan."

Assemblyman Song said, "People cannot help but question whether someone who personally practiced an 'all-in' purchase is appropriate as a nominee for the Minister of Land, Infrastructure and Transport, who is responsible for stabilizing the real estate market," and warned, "We will thoroughly verify whether he is qualified as a minister overseeing housing policy through the confirmation hearing."

Regarding these allegations, nominee Byeon's side explained that the loan was obtained not through a general card loan but through the Bogeumjari Loan. The Bogeumjari Loan is a policy finance program aimed at stabilizing housing for low-income citizens, applying a higher LTV than usual for houses priced below 600 million KRW. The nominee's side argued that although the Bogeumjari Loan is currently only available through banks, it was possible to obtain it through credit card companies at that time, and the interest difference with banks was not significant, so it is difficult to consider it an 'all-in' purchase.

Nominee Byeon reported the apartment at 590 million KRW during the public official asset declaration in March. In the recently submitted confirmation hearing request to the National Assembly, it was reported at 653 million KRW. This appears to be a revision considering recent changes in the official property price.

This content was produced with the assistance of AI translation services.