CAMCO to Purchase Non-Performing Loans from Loan Companies to Prevent Jeonse Fraud Housing Auctions

Difficult to Postpone Auction for Jeonse Fraud Housing Bonds Held by Loan Companies

Kamco Actively Considering Purchase Plan

On the 24th, victims of jeonse fraud visited the Jeonse Damage Support Counseling Center in Bupyeong-gu, Incheon, to receive consultations. Photo by Dongju Yoon doso7@

It is being seriously considered that the Asset Management Corporation (KAMCO) purchase cases of jeonse fraud housing bonds held by small-scale non-performing loan (NPL) purchasing companies such as loan companies, where auction postponement is difficult.

On the 25th, Lee Bok-hyun, Governor of the Financial Supervisory Service, said at an executive meeting, "With the cooperation of the financial sector, auction and sale postponements are proceeding smoothly, but since small-scale NPL purchasing institutions may face difficulties during this process, please consider ways to alleviate this."

A Financial Supervisory Service official said, "Commercial banks or savings banks with sufficient funds tend to comply with the financial authorities' cooperation on auction postponement, but loan companies do not. We are reviewing the option of KAMCO purchasing these bonds." The purchase price and number of cases are currently under investigation by the financial authorities.

Loan companies typically buy NPLs from banks or mutual finance sectors and resell them through auctions to generate profits. Therefore, they are reluctant to postpone auction schedules.

The financial authorities have identified that about half of the jeonse fraud housing in Michuhol-gu has been transferred to these loan companies. All four cases that were auctioned without postponement and failed on the 20th were bonds held by small-scale loan companies' NPL purchasing institutions.

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