The president of the Housing Loan Administration Corp., the debt-collecting body for the failed "jusen" mortgage lenders, said July 28 that recently discovered irrecoverable loans could amount to several hundred billion yen.
The debt-collecting organ should not be responsible for the loans, President Kohei Nakabo told reporters, adding that the estimated amount of the loans is far larger than expected. The existence of the losses was only discovered in December 1996 and was not known at the time the loan-reclaiming organ began operating last October.
The losses involve amounts that corporations borrowed on their reputations without collateral. But their reputations had been ruined by October 1, according to Nakabo, adding that "they cannot repay and no collateral exists."
Nakabo's agency will request that the Finance Ministry, which was responsible in 1995 for calculating the assets of the jusen firms, exclude the newly discovered bad loans from those the agency must reclaim.