The People Power Party alleged on the 4th that Hong Ji-sun, President Lee Jae-myung's nominee for land minister, tapped her mother-in-law for cash to buy an apartment in Seoul's Guro District last year. Critics say the purchase runs counter to the Lee administration's housing policy, which uses lending curbs to discourage people from taking on excessive debt to buy homes.
According to an analysis of Hong's confirmation hearing documents by the office of PPP lawmaker Kim Eun-hye, Hong and her husband bought an apartment in Sindorim-dong, Guro District, for 1.05 billion won ($760,000) in May last year under joint ownership. Hong took out a 367 million won mortgage at the time, and her wife borrowed 170 million won from her own mother on April 15 last year.
The day after Hong's spouse borrowed the money from her mother was the due date for a 200 million won interim payment on the purchase contract. The spouse agreed to defer principal repayment for one year and then repay principal and interest in equal installments at 4.6% a year, before revising the agreement this year to extend the principal grace period to three years.
In effect, Hong raised 537 million won through bank loans and family borrowing to buy the apartment, which cost more than 1 billion won. The unit is now valued at about 1.41 billion won, and Kim's office argues that Hong reaped a paper gain of more than 400 million won on roughly 460 million won of her own cash.
"President Lee Jae-myung told the public not to borrow money to buy homes, yet the land minister nominee he picked is the very person who stretched her finances to the limit to buy a home just a year ago," Kim said. "The president's own people are showing with their own actions that the idea of no market beating the government is a delusion."
