The Japan Housing Finance Agency (JHF) is reporting a surge in inquiries from borrowers who are struggling to make home loan repayments in the current crisis. As economic conditions worsen amidst the coronavirus pandemic a growing number of companies are laying off workers or reducing hours and pay. Household finances are being stretched to the limit, putting some borrowers in a precarious situation.
Just 20 inquiries were made to the JHF’s loan support hotline in February. By March that number had risen 10-fold to 200. In April, the agency received over 1,200 inquiries.
Many of the inquiries are from borrowers looking to either delay repayments for a month or cancel their salary bonus repayment.
There are two options offered by the JHF whereby borrowers who have lost their income or seen a drop in income can extend the length of their loan for a maximum of 15 years, reducing the monthly repayments, or switch to interest-only repayments for a limited time.
The JHF is expecting the situation to worsen. Despite the growing turmoil and financial hardships, the government has not issued any support program to protect or assist borrowers with mortgage repayments. Anyone looking for mortgage relief needs to contact their bank to see what options are available. Those that cannot renegotiate their mortgage repayments may be forced to sell their homes. One home loan consultation company in Tokyo has reported a constant stream of inquiries from borrowers thinking of offloading their homes.
Source: NHK, April 29, 2020.
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