MORTGAGE INSURANCE SET FOR KOREA THIS MONTH

Korea-based Seoul Guarantee Insurance Corp (SGIC) plans to launch mortgage guarantee insurance to Korea later this month, in association with AIG United Guaranty. US-based Genworth Financial has also obtained preliminary approval from the Korean regulator to begin offering policies, reports Korea Herald . Locally based Samsung Fire & Marine said that it was planning to launch a similar product early next year. The government is keen to boost Korea’s underdeveloped homeowners’ market. SGIC said that its mortgage insurance would target first-time buyers and those who are looking to buy a house not in a designated ‘speculation’ zone and which is not larger than 85 square metres. The mortgage insurance will increase the loan-to-value to 80% from the current limit of 60%. Lenders have traditionally been conservative when lending on property because the market has been volatile in the past. Professor Koh Sung-soo of Konkuk University said in a recent report on the Korean mortgage financing market that “the number of target customers of mortgage insurance is limited because of the restrictions. It is unlikely that many local insurers will aggressively pursue the business in the near future”.