The average recovery rate for victims through the government's purchase program for jeonse fraud-affected dwellings has reached 78% of the deposit amount.
The Ministry of Land, Infrastructure and Transport analyzed 44 cases where the purchase of affected dwellings, as well as the calculations of dividends and auction profits, were completed as part of the program for jeonse fraud damage, revealing that the average recovery rate was 78% of the deposit amount, it said on the 1st.
The program for purchasing jeonse fraud-affected dwellings is designed to support residential stability by having the Korea Land and Housing Corporation (LH) acquire the affected dwellings through auction and public sale after receiving the priority purchasing rights from the victims, and then providing these to the victims as public rentals. In this process, the auction profits, which were purchased at a lower price than the normal purchase price, are converted into deposits, allowing victims to reside without rental burden (for up to 10 years). Upon eviction, the auction profits are paid immediately to help maximize the recovery of the deposit losses.
In this analysis, among the 32 cases acquired through auction and public sale, 28 were from subordinate victims. Of their average damage amount of 124 million won, the amount that could be recovered as dividends through the auction process before the implementation of the revised special law for jeonse fraud was an average of 47 million won, accounting for 37.9% of the deposit amount.
However, after LH purchased the affected dwellings and supported auction profits under the revised special law, subordinate victims also received an average of 44 million won in additional compensation, raising the total average recovery amount to 91 million won, equivalent to 73% of the deposit amount.
A Ministry of Land official noted, 'This is more than 1.3 times higher than the level of guaranteeing at least the priority repayment amount (recovery rate of 55%),' adding that 'victims who did not qualify for priority repayment could recover losses under the revised special law, showing that LH's purchasing of affected dwellings is effective in compensating deposit losses.'
As of the end of March, a total of 9,889 requests for preliminary consultations on the purchase of affected dwellings have been received. Of these, 2,250 cases have completed acquisition review processes such as on-site investigations, and victims have been notified that purchases are possible. So far, a total of 307 affected dwellings have been acquired through consultations and auctions.
The Ministry of Land is closely coordinating with relevant agencies to expedite acquisition for the swift recovery of victims' losses. In February, it established a fast track with LH so that victims could quickly assess the possibility of early acquisition. Furthermore, once the possibility of purchase is determined, discussions continue with major courts and relevant agencies to ensure that the auction and public sale of affected dwellings occur promptly to provide practical support for victims.
Park Jin-hong, head of the Damage Support Division at the Ministry of Land, stated, 'Through the purchase of affected dwellings under the revised special law, jeonse fraud victims could recover approximately twice the amount that could be recovered as dividends through the auction process, and those who could not receive priority repayment were also able to recover their losses.' He added, 'We will focus our policy capacity to ensure that rapid acquisitions can take place, so that jeonse fraud victims can return to their daily lives as soon as possible in cooperation with the courts and relevant agencies.'
Meanwhile, the Ministry of Land reviewed 2,062 cases during the full meeting of the 'Jeonse Fraud Damage Support Committee' last month and ultimately decided on 873 cases as victims of jeonse fraud. Of the 873 cases approved, 784 were newly applied cases (including reapplications). In 89 cases, appeals were made against prior decisions, and whether the criteria for jeonse fraud victims were met was further confirmed, resulting in the determination as victims of jeonse fraud.
Of the remaining 1,189 cases, 743 were rejected due to insufficient criteria. In 236 cases, full refund of the deposit was possible due to guarantee insurance and priority repayment, so they were excluded from application, and in 210 cases, among the appeals made, the criteria remained unmet and were dismissed.