Korea Housing Finance Corp. (HF) said it successfully concluded the second issuance of mortgage backed securities (MBS) on May 12.
The bidding on of 4.3 trillion won of MBS to be issued May 26 and 1.12 trillion won of MBS whose term is longer than 10 years was sold on the open market.
Investors bid for a total amount of 1.83 trillion won in MBS, but sales reached 1.6 times the bid amount, which also represented a 70 percent increase from the bidding held on May 8 amounting to 1.07 trillion won, the company said.
Investors included retirement funds, insurance firms and long-term bond investors, focused on MBS with 15- and 20-year maturities with the interest rates lower by 0.02 percentage points and 0.05 percentage points, respectively, showing that MBS with long maturities were popular.
In the meantime, banks handling “stable mind transfer loans” should take over the unsold MBS and purchase the MBS that were turned over to general investors by the end of this year.
Another bidding was held May 29 for MBS with 10-year maturities, and additional MBS to be auctioned off will be announced at a later date.
With the second round of bidding completed successfully, HF officials said worries over excessive MBS volume have been resolved. They will schedule sales of more MBS.
On May 5, Korea Housing Finance Corporation (HF) said the cumulative amount of HF mortgage-backed securities issued exceeded 100 trillion won. HF said that it would issue 35 trillion won in MBS this year.
HF CEO Kim Jae-Chun held a press conference in commemoration of the 11th anniversary of HF at the Bankers' Club in Myeong-dong, Seoul, where he said, “The cumulative amount of HF mortgage-backed securities issued now exceeds 100 trillion won. With the MBS issuances, HF has made a significant achievement in reshaping mortgage lending from mortgages with a short-term variable interest rate and a single lump-sum repayment at the end of the loan term to long-term fixed rate mortgages repaid in regular installments over the full term."
He added, “The cumulative total of 100 trillion won in MBS issuances was possible because of the earnest efforts that HF has made for the advancement of the nation's housing finance market and bond market over the last 11 years since its launch."
Furthermore, he went on to state, “Our target is to issue 35 trillion won in MBS this year. We will continuously boost the sales of Conforming Loans and Bogeumjari Loan and further improve our MBS issuance structure and process."
This year, HF aims to provide 35 trillion won in mortgages, such as Conforming Loans and Bogeumjari Loans, 32 trillion won in housing guarantees such as Jeonse Loan Guarantees, and 6.6 trillion won in JTYK reverse mortgage loans.
HF CEO Kim said, “HF will offer 20 trillion won in Relief Loans to allow households who took out a floating-rate mortgage or an interest-only mortgage a year ago or more to switch to a more flexible mortgage. Relief Loans will ease their interest rate burden and a one-time repayment lump-sum repayment at the end of loan term, contributing to the government's policy of restructuring household debts."
HF will expand its JTYK program by easing its eligibility requirements and making other structural improvements, such as allowing subscribers to be covered by the loan agreement at the time when their property used as collateral goes through redevel
_주택 11주년.jpg)
