Debt, suicide and fraud: South Koreans in mortgage hell

For ten years, Park Hyeon-su lived in a windowless micro-flat in Seoul, working two jobs and saving each penny to purchase a fantastic home. However his safety deposit was misused by crooks and his dream collapsed.

South Korea’s rental market operates below a novel system referred to as “jeonse,” through which tenants pay massive deposits – typically a whole lot of 1000’s of {dollars} – after which reside rent-free for years, earlier than they get their deposit again after they transfer.

This technique permits homeowners to get entry to interest-free cash, and tenants to get low cost housing, with the constructing serving as collateral.

However the system, which made up two-thirds of the rental market within the Nineteen Nineties, isn’t as common in the present day. It has been stricken by fraud: greater than a billion {dollars} are misplaced yearly in scams, based on the police.

Park advised AFP he usually labored 9am to midnight on small supply jobs to avoid wasting $73,000.

However after he paid a deposit and moved in, his landlord – who turned out to be an impostor – left and he was evicted, with no technique to get his a reimbursement.

“It is not simply cash,” he advised AFP, however “all my twenties and thirties” that had been stolen.

“My dream of proudly owning a home pale away, I gave up courting, not to mention getting married or having a toddler,” defined the 37-year-old South Korean, who wished to testify below the pseudonym faux to ensure anonymity.

Like him, no less than 17,000 folks – 70% of them between 20 and 30 years outdated – have been victims of fraud. this these final years.

Suicides

A minimum of eight victims of scams of this sort have dedicated suicide, based on associations.

Many tenants take out financial institution loans to pay the big safety deposit required, with the intention of paying it again as soon as they’ve moved out and the -money returned to them.

However as soon as they’re cheated, they’re nonetheless in debt to their financial institution.

The South Korean parliament authorised a regulation final 12 months to assist victims, with interest-free loans over 20 years.

However the victims cry injustice. “Asking younger folks to spend the subsequent 20 years paying again cash misplaced to fraud is like asking them to cease residing,” says Ahn Sang-mi, who suffered, at a latest rally in Seoul.

The opposite choice is to undergo a bankruptcy-like course of that eliminates some money owed. However this hurts debtors’ credit score scores, which is particularly dangerous to younger folks, activists say.

The federal government shouldn’t “stigmatize younger folks” who’re simply beginning their grownup lives, stated Jang Solar-hoon, a sufferer from the town of Daejeon.

“The Jeonse Hell”

4 years in the past, Choi Jee-su, 33, used all his financial savings and a financial institution mortgage to maneuver into an condominium this to flee from life in a cockroach-infested dorm room.

However his condominium was offered with out his information and the proprietor made off together with his deposit, leaving him in debt.

To repay his first financial institution mortgage, Choi borrowed at excessive charges on his bank cards and offered his shares, whereas working in eating places and counting each penny for his meals.

He spent the day getting ready scrumptious meals for patrons, however he “had the one packet of prompt noodles to purchase for himself.

“I ended up selecting the most cost effective one, and crying whereas consuming it as a result of it tasted horrible,” stated Choi, who advised his story in a e-book titled. John Hell.

The Democratic Celebration, however, has proposed a invoice that permits the state to reimburse tenants for investments misplaced resulting from fraud. However the authorities rejected the proposal, citing value issues.

Choi, who now works on a gasoline ship hoping to avoid wasting as much as grow to be a pilot, needs the federal government to do one thing. Fraud this It should destroy lives, he says. “The victims lose every thing, their lives, their goals and their happiness are damaged. “

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