"I want to return the tenant's money and live in my own house"... Landlords in 'shock' over blocked loans

[Financial News] #. Mr. Kim recently went to a bank to inquire about a jeonse return loan but was told it was 'impossible'. Previously, the financial authorities announced during the '6·27 measures' that if a lease contract was completed before June 27, the previous regulations would apply. However, frontline banks refused, saying the detailed conditions were not met.

According to the industry on the 18th, the market is in confusion due to the detailed guidelines for the 'jeonse return loan' issued by the financial authorities.
Previously, the Financial Services Commission announced that landlords in the Seoul metropolitan area and regulated areas whose lease contracts were completed by June 27 could receive loans exceeding 100 million won. However, on the 29th, they added detailed guidelines requiring certain conditions to be met.

According to the guidelines of the financial authorities, two conditions must be met to receive more than 100 million won.
First, the jeonse contract with the existing tenant must have been concluded by June 27. Additionally, it is stipulated that the requirements and obligations of the home mortgage loan for the purpose of returning the tenant's deposit, as per the banking supervision regulations, must be complied with.
According to the relevant supervision regulations, the main points include △ prohibition of use for purposes other than returning the tenant's deposit △ the tenant's deposit must not be returnable by the landlord's own means △ the obligation to protect the tenant, such as subscribing to return guarantee insurance or paying the guarantee fee for the subsequent tenant's deposit.
In other words, due to the condition that 'the landlord is unable to return the jeonse deposit by their own means', banks are suspending loan processing even for contracts before June 27, according to voices from the field.  

The regulation on jeonse deposit return loans according to the '6·27 measures' has also been submitted to the National Assembly's national consent petition. On the 17th, the petitioner posted a plea titled 'Petition to urge the relaxation of jeonse deposit return loan regulations'.
The core is that the regulation on jeonse deposit return loans should be reasonably improved in line with the policy purpose of protecting actual residents. The petitioner lamented, "The government is blocking loans for the purpose of returning jeonse deposits under the pretext of curbing speculation by multi-homeowners," adding, "In fact, even single-homeowners who bought a house to live in themselves are unable to enter their homes because they don't have the money to return the tenant's deposit."
He continued, "Of course, the deposit should be returned to the tenant, and the owner should live in the house," emphasizing, "This is not speculation but a 'normal transition to actual residence'."


ljb@fnnews.com Lee Jong-bae Reporter