72% of HUG Unreturned Deposits Are Multi-Homeowners' Debt... Amounting to 639.8 Billion Won

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Scale of Defaulted Jeonse Deposit Debt: 5 Billion KRW in 2018 → 305.9 Billion KRW in 2022

HUG Repayment Amount 1.6 Trillion KRW

Uncollected Amount from Individuals Alone 831 Billion KRW

[Asia Economy Reporter Kim Min-young] Among the 890.9 billion KRW of deposits that the Housing and Urban Guarantee Corporation (HUG) has yet to recover, 72%, or 639.8 billion KRW, is debt from multi-homeowners.

On the 20th, Jang Cheol-min, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party, analyzed the 'Jeonse Deposit Default Status' data submitted by HUG. The amount of defaulted Jeonse deposits was 5 billion KRW in 2018, 122.6 billion KRW in 2020, 356.9 billion KRW in 2021, and 305.9 billion KRW up to July 2022. The scale of defaulted guarantee debt surged 60 times in five years.

So far, HUG has repaid 1.6445 trillion KRW in Jeonse deposits. When tenants who apply for return guarantees fail to get their Jeonse deposits back, the guarantee institution HUG pays the landlord on their behalf. The repayment targets (primary debtors) include 4,052 individuals (1.5566 trillion KRW) and 169 corporations (87.9 billion KRW), of which only 753.6 billion KRW (45.8%) has been recovered. This means that more than half, amounting to 890.9 billion KRW, has not been recovered.

Among individuals, 1,529 out of 4,052 (37.7%) have not returned a total of 831 billion KRW. Among the 1,592 individuals who have not repaid, 349 are multi-homeowners (owning two or more properties). The amount they have not returned alone is a staggering 639.8 billion KRW, accounting for 77% of individual debt. The multi-homeowner with the largest debt is Mr. Kim (47 years old), who has not repaid 49.9 billion KRW, followed by Mr. Lee (62 years old) with 49 billion KRW, and Mr. Jung (47 years old) with 47.3 billion KRW.

Mr. Park (28 years old), who owns 104 properties under his name, has also not returned 23.4 billion KRW. The youngest multi-homeowner debtor is Mr. Lee (22 years old) with 500 million KRW, and the oldest multi-homeowner debtor is Mr. Jung (107 years old) with 160 million KRW.

Among corporations, 106 out of 169 (62.7%) have not returned 59.9 billion KRW. Among these corporations, Company A, established in 2020 for residential building development and supply, alone has 46 cases amounting to 9 billion KRW unpaid.

Looking at the defaulted guarantee amounts by housing type, among the total 890.9 billion KRW, the largest unpaid deposit amount was for multi-family housing at 614.1 billion KRW (68.9%). This was followed by apartments at 146.1 billion KRW (16.4%), officetels at 92.5 billion KRW (10.4%), and row houses at 25.2 billion KRW (2.8%).

HUG manages the recovery of repaid amounts by executing housing construction and refunds to guarantee creditors in case of guarantee accidents. Instead of using tax collection or seizure under the National Tax Act, HUG obtains execution titles to initiate auctions and recover debts. However, there are limitations in HUG’s collection and investigation processes, and if debtors deliberately abscond, it is difficult to verify their assets, making it hard for low-income tenants to secure their Jeonse deposits, according to Representative Jang.

Representative Jang Cheol-min stated, "As the amount of unreturned Jeonse deposits increases, HUG’s guarantee burden and future guarantee fund operations inevitably face some strain, which ultimately threatens the housing stability of ordinary citizens." He emphasized, "It is necessary to strengthen recovery efforts through cooperation between guarantee institutions and lending institutions, and to impose stronger administrative sanctions through real-name disclosure of chronic and high-value default cases."

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