President Yoon orders suspension in real estate auctioning related to fraud

Memorial ceremony for those who died by suicide over housing fraud in Michuhol District, Incheon [Photo by Han Joo-hyung]

South Korean President Yoon Suk Yeol called for a review of existing state policies to help tenants that have fallen victim to housing fraud.

“Jeonse crimes are typically those that go against the weak people,” Yoon said during a Cabinet meeting on Tuesday.

Referring to a recent string of apparent suicide deaths of housing fraud victims, he said that “the victims of the tragic incidents are young, future generations.”

Yoon asked officials to “preemptively investigate whether there are any blind spots in the system and provide on-site support services.”

Jeonse is a type of long-term lease or deposit common when renting a home in Korea.

Yoon also ordered officials to take measures to suspend the auction of real estate connected to housing fraud.

In a related development, the Korea Asset Management Corp. (KAMCO) decided to suspend the auction of related houses as part of measures to support victims of jeonse fraud.

“We will postpone the auction sale until the government comes up with further measures as the low bidding price in an auction to recover bad debts could make it impossible for tenants to collect their deposits,” said an unnamed official from KAMCO.

Of the 210 houses in Michuhol District in Incheon that are managed by KAMCO’s Incheon branch, the management firm applied for a change in the sale date for a total of 51 houses.

Financial authorities also held an emergency meeting with local commercial bank officials to discuss whether to suspend the auction process for jeonse loans connected to fraud cases.

Yoon, in the meantime, called for a strong crackdown on drug crimes during the Cabinet meeting, stressing the need to “join forces to root out drug crimes that destroy the nation.”

Yoon also urged the National Assembly to swiftly pass a bill on fiscal guidelines that was submitted last year, noting that passing the burden caused by excessive spending on to the future generation is an “exploitation.”