The bulletin, which was signed by Minister of Economy and Finance Aun Pornmoniroth, revealed that for last year all four key debt indicators - such as the debt-to-GDP and
debt-to-income ratios - are well below their indicative thresholds.
Korean banks' mortgage underwriting is highly regulated in respect of loan-to-value and
debt-to-income ratios. The regulatory limits applied to these measures can be more stringent depending on the location of the mortgage security or where borrowers have more than one mortgage.
There's also been a big increase in FHA loans with high
debt-to-income ratios (DTIs) within the past several years.
Debt-to-asset and
debt-to-income ratios were calculated and characterized as moderate-risk debt-to-asset ratio (0.5 to 0.9), high-risk debt-to-asset ratio (≥0.9), and high-risk
debt-to-income ratio (>0.4)
Measures include an increased capital tax gain on house sales and stronger requirements for loan-to-value ratios and
debt-to-income ratios in certain areas (including Seoul)," it said in its report.
In a statement, the central bank said, 'Real estate-induced systemic risks remain subdued in Austria, but close supervisory monitoring is warranted in light of the fact that a rising share of new housing loans to households shows relatively high loan-to-value, debt service-to-income and
debt-to-income ratios.'
Debt-to-asset and
debt-to-income ratios, as well as total debt, have been on the rise.
(3) Our results do not support this explanation of the debt-dependent fiscal multiplier: They show that individuals with higher pre-recession
debt-to-income ratios actually reduce their debt by more than those with lower
debt-to-income ratios.
Indeed, almost half of FHA borrowers have
debt-to-income ratios above the QM limit of 43%.
The FPC set out new policies on home loans a year ago to insure against the risk of a steep rise in indebted households and has been given powers to limit residential mortgage lending at high loan-tovalue or high
debt-to-income ratios.
They ban certain loan features such as negative amortization and interest-only payments; set a 43 percent ceiling for
debt-to-income ratios; and impose a 3 percent limit on total loan fees, among other requirements.