Implements steps to provide support to those in hard times buffeted by the virus outbreak
President Moon Sung-yu of Korea Asset Management Corp. (KAMCO) and trade union head Kim Seung-tae participate in an event to join forces in overcoming a crisis, caused by the spread of COVID-19 on March 9. (Photos: KAMCO)
Korea Asset Management Corp. (KAMCO) has played the part of economic safety net for every national economic crises, such as the 1997 Asian financial crisis, the 2003 credit card insolvency crisis and the 2008 global financial crisis.
KAMCO has once again come to the aid of those in financial duress, who have been hit by the protracting coronavirus outbreak.
KAMCO has established and implemented steps to provide support to those suffering financially as a result of the virus outbreak.
If debtors and workers in the special disaster zone have seen their income decline due to job loss, leave of absence, or deferred wage, they will qualify for debt rescheduling and having up to 90 percent of their debts deducted.
Debtors are being given a six-month reprieve on repayment. Daegu and parts of Gyeongsangbuk-do — Cheongdo, Gyeongsan, and Bonghwa — which have become the epicenter of the nation’s cluster COVID-19 contagion, has been designated as a special disaster zone, the first such one to be declared over a disease, not by a natural disaster.
KAMCO plans to have debtors of secured debentures exempted from a surcharge (3 percentage point) of deferment and foreclosures delayed until a virus alert warning is lifted.
KAMCO comes up with steps to strengthen support to stabilize housing for low-income people who have experienced additional difficulties caused by the sagging national economy.
The corporation introduced a system in which borrowers of mortgage loans are allowed to reschedule their debts in arrears or to stay as tenants after disposing of their houses.
Borrowers of mortgage loans in arrears can reschedule their debts through the Credit Counseling & Recovery Service. But if they cannot do it, they can turn to KAMCO.
If borrowers of mortgage loans in arrears apply to reschedule their debts, KAMCO will allow them to reschedule their debts over 33 years by purchasing secured debentures from financial institutions. If mortgage loans cannot be repaid via debt rescheduling, mortgage loan borrowers may be allowed to stay as tenants after their homes are sold to KAMCO.
In that case, mortgage loan borrowers can be allowed to stay at their houses as tenants by converting the difference between house disposal amount and loan compensation money into jeonse security deposit. In particular, such mortgage loan borrowers can be allowed to be given a buyback option.
KAMCO Signs MOU with EBRD
KAMCO and European Bank for Reconstruction and Development (EBRD) signed an MOU with the aim of strengthening their cooperation in financial stability improvement and NPL resolution capacity building of developing countries on Feb. 24.
KAMCO and EBRD will explore the possibility of cooperating in following areas, including
1) exchange of research materials and other information,
2) exchange of visits or of experts or staff members,
3) collaboration in creating joint platforms for exchanging knowledge, and
4) personnel exchange and secondments.
KAMCO expects that its know-how and experience in NPL resolution, accumulated through surmounting IMF crisis and GFC, will help the Korean government’s Northern Economic Cooperation countries’ NPL resolution policymaking and accordingly contribute in strengthening of Asia’s regional economic safety net.
KAMCO was established by the Act on the Establishment of KAMCO As a restructuring institution, KAMCO serves the development of the nation’s economy and financial institution, maximizes government revenue by effectively managing government commissioned state-owned properties and in times of crisis, KAMCO stands in the front lines to support households, corporations, financial institutions, and even the government as the nation’s economic safety-net.