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Improvement of Mortgage Loan regulation - With legal issues of the LTV/DTI and protection plans for loan consumer -

  • Public Land Law Review
  • Abbr : KPLLR
  • 2016, 76(), pp.1-23
  • Publisher : Korean Public Land Law Association
  • Research Area : Social Science > Law

Lee,Heon-Seok 1

1서원대학교

Accredited

ABSTRACT

In recently, the rapid increasing trend of mortgage loan has assumed serious economic crisis. Attention on residential mortgage loans has been rising since the global financial crisis, as household debt and financial stability have emerged as the main issues. When the rapid downturned consumption and house prices plunge or interests increase under drastically accumulated household debts it can put pressure on repayment for household's principal and interests, and lead to deteriorated profitability and soundness of financial institutions where loan are heavily weighted. Loans exceeding one's repay ability can become a malicious debt and can lead to capita crunch, affecting negative impact on the country's economy. Therefore we agree to enforce a system of mortgage loan restriction. But during this time, government is focused on the regulation of LTV and DTI ratios, a typical means of controlling mortgages. Nevertheless, in the process of stipulating macro prudential LTV/DTI policies with micro-supervisory regulations, a problem has risen where the stipulated goal, maintaining the soundness of financial institutions, is in discord with the practical goal of stabilizing land market. Moreover the LTV and DTI have problems of legitimacy regulation, the experts have their differences in opinion, but it is analysed that the legal structure runs counter to the legal principle of the Ban on Comprehensive Authorization, as supervisory regulations over the regulation of LTV/DTI ratios by financial institutions are outside the delegated authority, or are enacted without a delegated basis. Therefore, under the criterion of law-imposed administration, administrative legislation needs to be reviewed and revised on a continued basis to secure legitimacy in financial administration legislation as the Banking Act and the Savings Bank Act ect. Furthermore, we should consider's right to defend against hybrid financial loan product and to protect and save minimum value against fore closure in the perspective of the right of residence.

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