The government-backed firm tasked with collecting debts owed by borrowers of the failed “jusen” mortgage lenders will urge 10 banks to take legal responsibility for the jusen fiasco, Housing Loan Administration Corp. President Kohei Nakabo said Wednesday.
Nakabo said at a news conference that he hopes the debt-collection body can settle its claims with the 10 banks out of court, as it did with Sumitomo Bank earlier this month.
On Feb. 1, Sumitomo admitted its legal responsibility for introducing risky corporate borrowers to two jusen and agreed to fork over 3 billion yen. Nakabo said HLAC will start negotiations with the banks, which he would not name, by initially limiting its claims to loans made to the most unscrupulous firms. HLAC is ready to take the cases to court if negotiations fail, Nakabo said.
On April 1, HLAC is scheduled to merge with Resolution and Collection Bank, becoming a new entity modeled on the U.S. Resolution Trust Corp. The Japanese version of the RTC will buy and try to recover bad loans from failed banks and banks striving to avoid collapsing.