Existing Jeonse Loan for Jeonse Victims to Be Repaid in 20 Years Installments... Delinquency Information Deleted

The government is promoting a plan to allow victims of jeonse fraud to repay their existing jeonse loans over 20 years.

Amid the recent deaths of three victims of jeonse fraud in Incheon, on the morning of the 18th, a banner informing about the fraud was hung on the apartment main entrance door of the jeonse fraud victims in Michuhol-gu, Incheon.
[Image source=Yonhap News]

On the 30th, the Ministry of Land, Infrastructure and Transport held a YouTube and Zoom briefing session to provide detailed explanations about the special support bill for victims of jeonse fraud proposed by the government and ruling party. Officials from related ministries such as the Ministry of Justice, the Financial Services Commission, as well as representatives from the Housing and Urban Guarantee Corporation (HUG) and Korea Land and Housing Corporation (LH) also participated.

The government explained that the Housing Finance Corporation (HF), which guarantees jeonse loans, will first repay the jeonse loans of victims whose maturity has come due to banks or other financial institutions, and then collect repayments from tenants in installments over 20 years.

Victims can use additional jeonse loans, auction fund loans, and new home purchase fund loans simultaneously. Regarding refinancing loans that allow switching existing jeonse loans to low-interest loans, from the second half of the year, refinancing will also be possible for jeonse loans guaranteed by SGI Seoul Guarantee. Currently, only HF-guaranteed loans can be refinanced.

Delinquency information of victims who have defaulted on existing loans will also be deleted. Authorities stated, "If the special bill is passed, delinquency information before the law’s enforcement will be retroactively deleted to improve credit ratings."

Victims attending the briefing asked about the six conditions presented as eligibility criteria for the special law. Authorities explained that even if there is a mortgage on the victim’s housing, if the tenant has fulfilled the requirements of housing delivery and moving-in registration, they are considered to have legal priority. They also said that even if a public auction or court auction has not been conducted, having an execution order (an official document specifying the claim and enforcement authority) allows recognition as a victim of jeonse fraud.

Tenants who have not recovered their deposit file a lawsuit for the return of the jeonse deposit in court to secure an execution order and proceed with compulsory auction procedures.

Even if the house is seized due to the landlord’s national tax arrears, the victim is included in the support targets of the special bill.

Victims residing in neighborhood commercial facilities can also receive support like general victims if they meet the six conditions.

The Ministry of Land, Infrastructure and Transport plans to consider measures such as eliminating rental deposits and converting to monthly rent for victims renting LH purchased rental housing. Various options will be provided depending on the victim’s choice.

LH has agreed with the government to establish and apply relaxed purchase rental housing standards for jeonse fraud victim houses. Victims who have already been evicted after auctions cannot receive priority purchase rights or tax claim apportionment support, but they can receive support for LH public rental housing and loans for jeonse funds and purchase funds.

There were also demands to remove loan support requirements such as "annual income below 70 million won" and to extend the two-year special law application period. Authorities explained, "As long as one is recognized as a victim of jeonse fraud within the two years the special law applies, support can continue thereafter."

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