I've had a mortgage on a house in Kyoto since 2009 and I used the house as my primary residence until 2013, at which time I moved out of Kyoto and Japan.
When I moved out, I turned the house into an "Inn" (totally licensed and legit) and the house is managed by a local property manager now. Occassionally, the lending bank sends me a letter asking me to update my information (PR), but recently, I received a letter that is more direct and includes a due date. They specifically want to see Residence Card and Passport. Since I left Japan, my PR expired (another, much longer and unfortunate story). As far as I can tell, there are a few problems: A.) I know longer have PR and they loaned me the money based partially on that credential. B.) The house was financed under the assumption that it would be a primary residence and it currently is an investment property, thus the interest rate should theoretically be higher than it is.
The bank is saying that if I don't provide the information they "may need to limit your transactions in accordance with our deposit rules and regulations".
Note that the ONLY thing I use this bank for is the mortgage. I don't pay bills from this account (other than the mortgage, of course), but I do transfer 6 months of mortage payments into the account every 6 months and the bank pulls money out each month like clockwork.
Questions:
What happens if I don't respond? Will they not allow me to make payments on my mortgage? (That seems stupid). Would they prevent me from depositing money into the account thus making it difficult to make the mortgage payment? Would they ask for the loan to be repaid? Any advice from this group?
Note that I have the money in Japan to pay off the mortgage but I'd rather not.
by redditusername-2024
8 comments
This sounds like one of those rare situations where you need to get ahold of the bank directly and ask them to clarify the situation.
The KYC rules are rather strict these days, and they could end up making your life quite difficult.
If the property is no longer your primary residence, they are well within their rights to demand the immediate payment of the remaining principal for the mortgage.
All banks are recently more strict to hunt foreigners without proper paperwork ie residence card and my number…
I was told by my bank mostly due to tax evasion
it is very very normal to have to change a mortgage created for a primary residence to something else for a rental (with worse conditions). sounds like you never did that and you need to get this sorted out. they will likely not be happy to find out it has been an inn for over a decade, legit or otherwise.
They are within their rights to ask for the loan balance to be repaid immediately. It’s likely in the loan contract you signed.
Read your original mortgage contract, there is a clause somewhere explicitly stating that it is to be used for your primary residence, if not you might be in trouble. Source: Left the country too and was forced by the bank to pay the whole mortgage back.
You’re in violation of your loan t&c most likely.
A mortgage for a house you live in has a different treatment legally as well as how the bank regards the asset risk and set rates.
If you’ve been using a residence as an inn, it’s hard to imagine you haven’t violated your lending contract, and the bank may be within its rights to demand the full balance.
However, the bank is in the business of collecting on loans they make, so they may be ok with changing your contract to a higher rate and leaving it at that.
Personally, I think the bank has a lot of discretion in this case, and unless they feel you really screwed them and the loan was purposefully fraudulent, they probably strongly prefer to quietly change the terms and be done with this ordeal.
Man people like you ruin it for the rest of us. No wonder it is so hard for us foreigners to get a house loan or even a bank account or credit card these days. And it is getting worse. Ring the bank and sort it out man. It’s called responsibility.
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