Taking cue from the U.S lending crisis, financial regulators in South Korea are keeping a tab on the mortgage companies and private lenders as a precaution against mortgage defaults which may happen as a result of falling home prices.
A South Korean official stated:
South Korea may not experience things that happened in the U.S., but we don’t know what will happen. South Korean mortgage firms and borrowers can be exposed to higher default risks any time if the housing market undergoes a steep correction
This is being done in the wake of sub prime lending crisis which took place in U.S and hence the county is making all efforts towards protecting mortgage firms from defaults. Though Korea may not experience a similar situation as that of U.S but you never know that there could be some ripple effects of this situation so therefore its better to be safe rather than sorry.
Via dnaindia
