On December 29 the Japan Housing Finance Agency (JHF) announced that they are considering either canceling mortgages or reducing the repayments to homeowners from the tsunami affected areas in Tohoku.

The first stage will target residents from tsunami-hit areas in Sendai City and will then expand to cover other areas. If enforced, this will mean that residents who have to rebuild their homes will not be hit with a double mortgage. It will also help to promote development in the new land parcels on safe ground that have been set aside by the local governments.

The local governments have been planning to purchase up the tsunami-hit land from residents, and these funds could then be used by the residents to build new homes in the safe zones. However, land values in the tsunami-hit regions have plummeted and even if the homeowners sold their land, the price would not be enough to cover their mortgage and they would still be liable for repayments. This has created a standstill and was the main reason why Sendai City asked the JHF to take action.

There are between 200 and 300 households in Sendai City that will fall under this proposed plan. The areas of Wakabayashi and Miyagino in Sendai have been designated as disaster areas and any new construction or building alterations are prohibited. There are over 2000 households in these areas and the City is trying to move them inland to safe zones.

Source: The Kahoku Shimpo, December 30, 2011.

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