190,000 homeowners fail to make full mortgage payments

About 190,000 homeowners are unable to make full payments on their mortgage loans even if their houses are put up for auction. As more than a few have low credit ratings in having multiple creditors, financial authorities will launch a task force to resolve such debt.

The Financial Supervisory Service on Sunday announced the results of a study on mortgage loan-related risks, its first survey of all financial companies and the number of homes with values deemed less than their mortgage loans.

The study found that the number of homeowners whose mortgage loans were more than the average sale prices (appraisal value/sold price) was about 190,000 or 3.8 percent of all mortgage loan debtors. The amount was an estimated 13 trillion won (12 billion U.S. dollars) or 3.3 percent of the value of all mortgage loans. The average sale price as of late October was 76.4 percent.

Yang Hyeon-geun, banking supervision director of the Financial Supervisory Service, said, “It`ll be difficult for those 190,000 people to get rid of debt even if they are put up their homes for auction, and the number will likely to increase if house prices fall.”

buddy@donga.com