MOLIT-Financial authorities 'Borrowing on Jeonse'...Charter guarantee 'Red light'

[Anchor]
The issuance schedule of bonds worth 500 billion won to expand the capital of HUG, the Housing and Urban Guarantee Corporation, which guarantees lease loans, has been suspended.

This is because the financial authorities have put the brakes on it, but there are concerns that if it goes wrong, it will lead to disruptions in lease guarantees.

Reporter Choi Doo-hee reports.

[Reporter]
HUG, a public enterprise housing and urban guarantee corporation under the Ministry of Land, Infrastructure and Transport, which provides guarantees when receiving lease loans.

However, the amount of subrogation incurred in the process of returning lease payments to tenants instead of landlords has increased sharply in recent years.

Due to the aftermath of the charter fraud, subrogation payments exceeded 3 trillion won last year, and have already exceeded 3 trillion won by the end of September this year.

However, the accumulation of losses caused HUG's warranty issuance to turn on a red light as well as not getting the money back properly from the landlord.

As a result, HUG has decided to expand its capital by issuing new capital securities worth 500 billion won.

However, the financial authorities notified the suspension of the process, saying additional consultations with related ministries were needed, causing a setback in the schedule.

While financial authorities have tightened household loans earlier, the Ministry of Land, Infrastructure and Transport has taken a back-and-forth move over regulations on stepping-stone loans, which are policy loans, and similar controversy continues.

[Kwon Dae-jung / Professor of Real Estate, Sogang University Graduate School: Inter-ministerial consultative body needs to be strengthened. In order to manage the urgent market, I think we need a window to communicate at any time other than regular meetings.]

After it was pointed out that the market confusion was amplified due to the controversy over the offbeat, the Ministry of Land, Infrastructure and Transport explained that related ministries, including the Financial Services Commission, are in close consultation.

Kim Byung-hwan, chairman of the Financial Services Commission, also drew a line, saying that the suspension of the schedule related to HUG capital expansion has nothing to do with the criticism that it is for policy loan management.

[Kim Byung-hwan / Chairman of the Financial Services Commission: If sufficient information is discussed with each other in the process of submitting a securities report and a proposal is made, we will do so so so as not to interfere with HUG's capital expansion and soundness]

With concerns that if HUG does not increase its capital by the end of the year, it will cause major disruptions to related tasks such as issuing new guarantees starting next year, efforts to communicate between related ministries are more urgent than ever.

I'm Choi Doohee of YTN.

a photographerEdit Video;Lee Eun-kyung
design;Ji Kyungyoon