"3,500 Young People Fell Into Debt After Jeonse Fraud"—They Account for 90% of Special Debt Adjustments

[Financial News] The number of people who used the Korea Housing Finance Corporation (HF)'s special debt-adjustment program after falling victim to jeonse fraud stood at 3,898. People in their 20s and 30s accounted for 89.2% of them, or 3,478 people. Their average debt was approximately KRW 100 million.
According to data submitted by HF to the office of Park Sung-hoon, a People Power Party lawmaker on the National Policy Committee, the cumulative number of users of the special debt-adjustment program for jeonse-fraud victims reached 3,898 through July this year, since its introduction in June 2023. By year, the figures were 94 in 2023, 797 in 2024, and 1,507 last year. A total of 1,500 people used the program through July this year, nearly matching the annual figure for last year.
By age group, people in their 30s accounted for the largest share at 2,023, or 51.9%, followed by those in their 20s at 1,455, or 37.3%. The figures were 318 people in their 40s, 77 in their 50s, 24 in their 60s, and one in their 70s.
By region, Seoul had the largest number at 952, followed by Gyeonggi Province with 673, Incheon with 668, Daejeon with 642, and Busan with 421. Users from the Seoul metropolitan area—Seoul, Gyeonggi Province, and Incheon—numbered 2,293, accounting for 58.8% of the total.
The total debt of special debt-adjustment users amounted to KRW 394.2 billion, or approximately KRW 100 million per person on average. The total amount actually covered by debt adjustments was KRW 294.3 billion.
Under the special debt-adjustment program, when a tenant who borrowed through an HF jeonse guarantee cannot repay a loan to a financial institution because of jeonse fraud, HF repays the loan on the tenant's behalf. The victim then repays the amount over an extended period. Since the program began, 3,784 people have used installment repayment plans lasting up to 20 years. Repayment deferrals were granted to 2,016 people, while interest reductions totaled KRW 2.44 billion.
Separate financial support for jeonse-fraud victims also exceeded KRW 1 trillion. From June 2023 through July this year, HF provided 14,563 cases of tailored support worth KRW 1.1895 trillion, including renewal guarantees for Beotimmok refinancing loans, special home-purchase loan guarantees, and special jeonse loan guarantees.
Jeonse-fraud victims are eligible for a special program under which income restrictions do not apply, unlike the standard Bogeumjari Loan, and the home-price limit has been relaxed to KRW 900 million or less.
Park Sung-hoon emphasized, "People in their 20s and 30s account for 90% of those affected by debt adjustments. We need practical debt-relief measures and plans to help young people rebuild their lives."
[email protected] Park Moon-soo Reporter