Government to request immediate suspension on rental auctions

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Hwagok-dong along with Michuhol District in Incheon were mostly the target of jeonse fraud scammers. [YONHAP]" src="https://koreajoongangdaily.joins.com/data/photo/2023/04/19/d5a44b5e-a496-4866-afcc-d56f692aa15e.jpg"/> <span class="mask"></span> </div> <p class="caption">View of the low-rise apartments in Hwagok-dong at Gangseo District, Seoul, on Wednesday. Hwagok-dong along with Michuhol District in Incheon were mostly the target of jeonse fraud scammers. [YONHAP]</p> </div>   <br/> The government said Wednesday that it will ask financial companies to immediately suspend from Thursday the auctioning of houses of victims of fraud involving long-term housing rental deposits, or <i>jeonse</i>. <br/>   <br/> The announcement came a day after President Yoon Suk Yeol ordered the government to come up with solutions to help the victims of jeonse fraud. <br/>   <br/> Most of the victims are not only unable to recoup their deposits, but also face eviction. <br/>   <br/> President Yoon addressed the issue after a 31-year-old woman killed herself after she was scammed out of her deposit, the third suicide involving victims of jeonse fraud. <br/>   <br/> All three victims were young people in their 20s or 30s. <br/>   <br/> The government, led by the Finance Ministry, added that it will come up with follow-up measures, including financial aid to help the victims to recover as soon as possible. <br/>   <br/> On the same day, the Minister of Land, Infrastructure and Transport shot down the idea of the government buying the controversial homes that are up for auction to rent out to fraud victims.   <br/>   <br/> “If it benefited the victims for the government to purchase the homes and rent them out, we’d have no reason not to consider it,” Minister Won Hee-ryong said. “However, even if the government purchases the homes, the victims won’t be able to get back a single penny as the creditors will be paid first.”   <br/>   <br/> Creditors include financial companies such as banks. <br/>   <br/> “Would the people accept paying off the creditors with taxes?” Won said. “This is not the way to help the victims.”   <br/>   <br/> For now, Won said the best solution is to hold off on auctioning the properties to prevent evictions.   <br/>   <br/> He stressed that by suspending the auctions, the government isn’t stripping the rights of the creditors but buying time to help the victims.   <br/>   <br/> Won apologized to the public for the government's belated measures.   <br/>   <br/> "I feel infinite responsibility," Won said. "It is the government's job to come up with the optimal solution even if it is late."   <br/>   <br/> The controversy over jeonse fraud has been an issue for several years, especially since property values started falling sharply last year.   <br/>   <br/> The issue only reentered the spotlight after the suicide of the 31-year-old woman, a former Olympian. She was one of the victims of a jeonse fraud case committed in Incheon’s Michuhol District. <br/>   <br/> Like many of the victims in Michuhol, not only did she have little chance of seeing her jeonse again, but she also faced eviction with her apartment being auctioned. <br/>   <br/> According to the government, 2,479 households in Michuhol District have fallen victim in fraud case. <br/>   <br/> So far, the homes of 1,523 households, or 61.4 percent, have been placed on the auction block. <br/>   <br/> Some 87 have already been sold off.   <br/>   <br/> Both the conservative People Power Party (PPP) and liberal Democratic Party (DP) are promising to take strong action against jeonse fraud.   <br/>   <br/> However, neither party has come up with clear measures to deal with the problem.   <br/>   <br/> Instead, they are accusing one another of having done nothing until the number of victims reached the thousands.   <br/>   <br/> The DP Chairman Lee Jae-myung on Wednesday called for “practical measures” to help fraud victims.   <br/>   <br/> He said the government’s announcement Tuesday to suspend the auctioning of homes was not enough.   <br/>   <br/> “We have to quickly push a special bill that would save the victims with preemptive support for tenants to be repaid later,” Lee said. <br/>   <br/> The DP leader criticized the Yoon administration for mishandling of the jeonse fraud issue.   <br/>   <br/> “The victims are being pushed to the edge because of sloppy handing by the government,” Lee said.   <br/>   <br/> The PPP also said on Wednesday that it is creating a task force that will focus on jeonse fraud.   <br/>   <br/> PPP lawmaker Yoon Sang-hyun said jeonse fraud was largely the result of the real estate policy of the previous Moon Jae-in government.   <br/>   <br/> “The Moon government pushed a low interest rate policy that led to sharp rises in housing values and a shortage of jeonse apartments,” the lawmaker said during a press conference.   <br/>   <br/> “As a result, tenants moved into the non-apartment jeonse market,” he said, referring to so-called officetels, which can be used as offices but usually serve as studio apartments. <br/>   <br/> Incheon on Tuesday laid out its own measures to support the victims, especially young people.   <br/>   <br/> Victims between the ages of 18 and 39 will receive 400,000 won every month for a year to pay their monthly rent. <br/>   <br/> To victims moving into government-leased housing, Incheon’s city government will provide 1.5 million won for moving expenses.   <br/>   <br/> <i>If you or someone you know is feeling emotionally distressed or struggling with thoughts of suicide, LifeLine Korea can be contacted at 1588-9191 or the Crisis Counseling Center at 1577-0199. The Seoul Global Center offers English-language counseling. Contact 02-2075-4180 (+1) to arrange a session. Other international helplines can be found at www.befrienders.org.</i> <br/>   <br/> <br>BY LEE HO-JEONG [<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="18747d7d367077727d77767f58727777767f79767f367b7736736a">[email protected]</a>]</div>    <div id="admaruPlayerWrapperContainer">  <script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script><script async src='https://js.admaru.com/admaru.js'></script> <script id="3bf9fc17-6e70-4776-9d65-ca3bb0c17cb7"> var admarutag = admarutag || {} admarutag.cmd = admarutag.cmd || [] admarutag.cmd.push(function () { admarutag.pageview('3bf9fc17-6e70-4776-9d65-ca3bb0c17cb7'); }); </script> </div>  </div> </div> <div class="ad_align_center"> <div class="artBanner-pc"style="padding-top:25px;"><script data-id="ACG3jI9ESgmRQvhRldp-nA" name="korea_joogang_p/article/article@article_pc_house_640x110?mlink=518" src="//cast.imp.joins.com/persona.js" async></script></div><div class="artBanner-mo"><script data-id="Wij_KKtJTtKLd-PURQwoDA" name="korea_joogang_p/article/article@article_mo_house_320x70?mlink=519" src="//cast.imp.joins.com/persona.js" async></script></div></div>  <div class="social-area text-right"> <a href="#none" onclick="snsSubmit('facebook','https://koreajoongangdaily.joins.com/2023/04/19/national/socialAffairs/jeonse-fraud-Michuhol-Dstrict-Incheon/20230419193302701.html', '', ''); 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Government to request immediate suspension on rental auctions