Byungtae Yoo, HUG President: "Malicious landlords will face immediate auction without grace period"

Yoo Byung-tae, president of the Housing and Urban Guarantee Corporation (HUG), announced that bonds of malicious landlords who disappear without returning tenants' deposits will immediately enter auction procedures without any grace period.

Yu Byung-tae, President of HUG, is having a conversation at a press briefing held near Sejong City on the 5th. (Provided by HUG)

At a press conference held on the 5th in Sejong City, Yoo Byung-tae, president of HUG, said, "In the case of malicious landlords, we will apply for auction immediately without a grace period," adding, "To pressure these individuals, we will not only request investigations but also work hard to uncover hidden assets, and if hidden assets are found, we will promptly recover them through compulsory procedures."

President Yoo held his first press conference since taking office and announced that he would focus on △ stabilizing housing for ordinary citizens, △ expanding the housing supply base and supporting market function recovery, △ securing financial soundness for stable guarantee funds, and △ innovating internal infrastructure.

First, he announced measures to protect tenants' jeonse deposits. He emphasized, "To protect tenants' jeonse deposits, we will provide essential information through the Anshim Jeonse app and supply special guarantee loans for reverse jeonse loans," adding, "We will make every effort to operate the Jeonse Damage Support Center and the Auction and Public Sale Support Center to assist victims of jeonse fraud."

He specifically stated that three task force (TF) organizations were newly established and converted into formal organizations through organizational restructuring to ensure timely return of jeonse deposits.

He also said that bond recovery measures would be strengthened. He said, "We plan to expedite auction and public sale procedures to recover bonds," adding, "Regarding the return of deposits, landlords will be given a grace period to voluntarily repay, and if they fail to comply, recovery will be made through auction and public sale."

Due to the surge in guarantee accidents since last year, financial leakage at HUG is inevitable. According to data submitted by HUG to Maeng Seong-gyu, a member of the Land, Infrastructure and Transport Committee from the Democratic Party, from January to April this year, the total amount HUG returned to tenants on behalf of landlords for houses with jeonse deposits of 500 million won or more was 102.9 billion won. The scale of subrogation payments for houses with jeonse deposits of 500 million won or more has steadily increased from 40.1 billion won in 2019 to 55.2 billion won in 2020 and 77.6 billion won in 2021.

Regarding whether the surge in subrogation payments would increase losses that HUG must bear, President Yoo responded that the recovery rate of subrogation amounts averages 70-80%.

He explained, "When HUG makes subrogation payments, losses inevitably expand temporarily," adding, "Although the timing of auction and public sale completion varies, even in cases of non-repayment, about 70-80% is recovered."

He also stated that considering the impact of subrogation amount recovery on guarantee capacity, HUG plans to expand guarantee capacity. He said, "The guarantee limit set by the Housing and Urban Fund Act has been expanded to 70%, and with the revision of the enforcement decree, guarantee capacity is expected to increase," adding, "We are closely cooperating with related ministries to increase government investment. Even if financial soundness deteriorates, we are preparing to ensure there is no significant problem in securing guarantee capacity."

When asked when guarantee deposit non-return incidents would peak and decline, he said, "The contracts that peaked in housing prices and jeonse prices in 2021 mature this year, and recently, jeonse prices have fallen, causing frequent incidents," adding, "With the US interest rate hikes pausing and interest rates stabilizing and housing prices rising, I think the guarantee accidents for jeonse housing will pass a turning point."

President Yoo also pledged to work on implementing national tasks to realize housing stability through expanding housing supply and restoring market functions. He said, "We will strengthen liquidity supply to housing developers and smoothly promote small-scale maintenance projects and public-private collaborative urban maintenance projects," adding, "If there is high demand for project financing (PF) guarantees from housing supply developers, our corporation will actively review and assist housing supply."

Regarding HUG's involvement in the continuously rising sale prices, he said, "If there are concerns about price increases, after monitoring market trends, the government will consider expanding regulated areas to adjust whether sale prices are excessive," adding, "Our role will vary depending on the housing market."

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