Page 395 - 2019 6th AFIS & ASMMA

Finance Corporation. So, we apply a floating interest rate, which is COFIX First, reverse mortgage provides liquidity. But my observation on
plus 0.85%, which is currently about 2.5%. It's quite low, and lower than that point is that some houses are already liquid in terms of the ease of
the prime mortgage rate. Because we are not the lender, we cannot directly sale. For example, Korean apartments, so to speak, apartment units, are
supply reverse mortgages to the borrowers, but we do everything we can. So, very standardized, so they look very alike. So, sometimes people buy an
in that sense, we, on behalf of the government, directly supply the reverse apartment unit without even looking at it. It's very standardized and very
mortgages to the consumers. similar. To buy and sell a unit is very easy, so in that sense, it is already
very liquid. So, additional liquidity provided by reverse mortgage would
be very marginal in that case.
» Moderator | Richard K. Green
Thank you very much for those very helpful comments and for Another point I observed is that the usual traditional dictum especially
explaining how the system works in Korea. So, to finish up our in Korea goes, "Wealth should be buried in a house or in a land". So, in
presentations, to get a macro view and how housing finance interacts that sense, people may not prefer liquidity over illiquidity. Sometimes
with the macro market, we have a Jun Han Kim from the Bank of Korea. people prefer illiquid assets, so providing liquidity may have some
unintended effects.

» Panelist | Jun Han Kim Session III
General Manager, Busan Branch, The Bank of Korea

Before I start, I'd like to thank the organizer for having me. It's a great
pleasure to be here. Today, I'm going to talk about my observation about
reverse mortgage and some thoughts based on that observation; what
reverse mortgage should be.

Another observation is, as the other speakers already said, reverse
mortgage provides insurance. But reverse mortgage reduces individual
risk or idiosyncratic risks by pooling, but there still remains macro risks;
for example, average house price changes that cannot be ensured, or
average change in longevity that cannot be ensured.

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