Four online Japanese banks, AEON Bank, PayPay Bank, au Jibun Bank, and SBI Shinsei Bank, have announced an agreement to work together to prevent mortgage fraud. In addition to sharing information about how people may attempt mortgage fraud, they will also share information on suspicious methods and malicious operators.
Mortgage fraud affects the banking, housing, and financial industries as a whole, but online banks see it as a particular weak spot. With mortgage processes being handled almost entirely online, documents can be easier to alter or falsify, especially as document editing tools become more accessible. For a standard bank, an applicant may often be required to physically meet with staff, making it easier for suspicious behavior to be noticed and acted upon.
Using a secure system, the four banks plan to share information once a month. In urgent cases, face-to-face meetings may also be scheduled.
As this kind of cooperation develops, it is likely that loan applicants may face closer scrutiny going forward. That being said, there is little reason for legitimate loan applicants to worry. The goal of the four banks is not to make their loan requirements stricter just for the sake of it, but simply to make sure fraudulent actors do not slip through the cracks.
For foreign buyers in particular, this is a good reminder not to rely too heavily on what a friend, acquaintance, or online comment says about “how to get a mortgage in Japan.” Maybe someone you know was able to get a housing loan in the past by presenting their situation in a certain way, or maybe a bank was less careful about a specific point at the time. That does not mean the same approach will work now. As banks become more aware of fraud risks and share more information with each other, things that may have slipped through the cracks before may be noticed more easily.
Japan is extremely strict about information matching. For example, in some countries, if there is a minor discrepancy between two of your documents and you have a brief, reasonable explanation, they may think nothing of it. In Japan, however, an information mismatch in income details or employment details could suddenly see your application being looked at under a magnifying glass.
A key takeaway is that, in Japan, loans are not just about money. This can sometimes frustrate people, but if you are looking to buy a house in another country, that country’s reality is now yours. Yes, income and creditworthiness are vital, but the accuracy and clarity of your documents, along with your conduct throughout the entire process, may be equally vital.
It’s also important for potential buyers to consider who they are working with. How honest and upfront is your real estate agent? Do they make promises too easily? Banks in Japan are finicky, and each one has its own quirks. Some real estate companies may prioritize sales over your best interest. After all, if you cannot get a mortgage, the agent usually cannot receive their commission. That does not mean agents are automatically dishonest, but it does mean buyers should be careful about blindly following advice that sounds like it is mainly designed to “pass screening” at any cost.
If you misrepresent your situation or submit incorrect information, you are the one responsible for that application. In serious cases, breaking the bank’s rules could lead to major consequences, including the possibility of the bank demanding repayment of the mortgage. A trustworthy agent will emphasize the importance of accurate documents without discrepancies, not encourage you to bend the truth just to get approved.
Another practical point is Japanese ability. If you can communicate with banks in Japanese, it may improve your chances of accessing better loan options and lower interest rates. You do not necessarily need perfect Japanese, but being able to understand the process, answer questions clearly, and communicate directly with the bank can make a real difference. Ideally, foreign buyers who are serious about buying property with a loan in Japan may want to aim for at least around JLPT N2-level Japanese ability.
Looking for advice on your housing journey? The Dovetail team is ready to help.
Source: https://www.nikkei.com/article/DGXZQOUB267B20W6A620C2000000/