Financial Services Commission Chairman Lee Uk-heon Urges All-Out Efforts to Provide Seamless Funding for Genuine Homebuyers

▲ Financial Services Commission Chairman Lee Uk-heon answers lawmakers' questions during a plenary session of the National Policy Committee at the National Assembly on July 29.

Financial Services Commission Chairman Lee Uk-heon called on the financial sector today (the 14th) to "make every effort to ensure seamless funding for genuine homebuyers."

Chairperson Lee convened financial institutions and related organizations for an "Expanded Household Debt Inspection Meeting" at the Korea Federation of Banks in Jung-gu, Seoul, this morning. He made the remarks while requesting active cooperation in implementing the comprehensive real estate finance measures announced by the government the previous day.

Chairperson Lee stated, "As the target growth rate for total household loans has been reasonably adjusted this time, please ensure that genuine demand funds, such as relocation loans, intermediate payment loans, and final balance loans, are supplied in a timely and stable manner utilizing the financial sector's expanded additional funding capacity."

The financial authorities have raised this year's target growth rate for total household loans from the previous 1.5% to 3.0%.

This is expected to newly generate approximately 30 trillion won in lending capacity.

Chairperson Lee noted, "The core (of this real estate policy) is to maintain a consistent demand management stance while strengthening housing supply and support for genuine homebuyers such as young people. Speculative demand must be managed more firmly, while financing should be supplied more smoothly to actual construction sites and genuine homebuyers."

However, he also emphasized that "adjusting the total volume target is a measure to support genuine demand," adding, "It must not become a signal that stimulates speculative loan demand."

Chairperson Lee said, "Since lending regulations directly impact borrowers' funding plans, it is very important for the financial sector to closely look after borrowers standing on the regulatory line in the field."

In preparation for potential customer inconveniences and complaints in the field following the implementation of the measures, he urged paying close attention to employee training and computer system reorganization to prevent operational confusion.

In addition, he requested active participation in expanding housing supply and normalizing project financing (PF) business sites.

Chairperson Lee told the financial sector, "To ensure that troubled business sites within our own normalization fund are rapidly normalized, please designate person-in-charge for each business site together with the Financial Supervisory Service, and establish and implement action plans."

The Financial Services Commission announced that among the real estate policies announced the previous day, reforms to the calculation method of the loan-to-value (LTV) ratio for relocation loans, the expansion of the scale of PF business guarantees, and the 100% expansion of the guarantee ratio for residential business sites will be implemented immediately this month.

The authorities plan to allow the estimated value of newly built houses (post-completion asset evaluation value) to be reflected in the LTV of relocation loans.

This is expected to have the effect of increasing the limit for relocation loans.

Meanwhile, household loans across the entire financial sector increased by 6.2 trillion won last month, showing a smaller expansion compared to the previous month (8.3 trillion won).

Chairperson Lee diagnosed, "The scale of household debt increase remains high compared to past averages, and the pace of limit depletion is somewhat rapid based on the annual total volume management target, so it is a situation where we cannot let our guard down."

In particular, he stated, "Housing transaction volumes are steadily increasing, centered around the capital region. Accordingly, household loan demand is expected to remain high for the time being, requiring even more proactive management."

(Photo: Yonhap News)

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