Moral judgments aside, this conversation raises some really good questions that interest a lot of Japan residents.

Let me share thoughts from my perspective of owning a licensed real estate brokerage in western Tokyo, and having gotten a home loan as a non-PR / non citizen.
1/16 https://twitter.com/briandotjp/status/1349534649991655426

Q1: Will someone skipping out on a home loan ruin the chance of other non-citizens to get loans?

A1: Statistically—at a national risk mgmt decision level—it will mean more than zero, but not *much* more. Non-citizens skip out on loans sometimes. And so do J citizens.
2/16

A1 cont'd: BUT if these ppl skip out on their loan it *will* negatively affect the next non-citizens trying to borrow from the *same branch* of that lender.

Why? Local branch managers are very influential in who gets approved. This is key for aspiring borrowers to know.
3/16

A1 cont'd: Local branch mgr isn't almighty, but they can push the institution to approve you. If you've had a long banking relationship (i.e. they see your income and spending), it goes a long way.

But if they've vouched for you, they'll also get huge flak if you skip out.
4/16

A1 cont'd: If someone skips out after branch mgr has supported them, it will hurt the mgr's internal reputation and imho scare them re: future loans. That applies to citizens too, but non-citizenship cases will be more noticed, even if that's unfair.
5/16

A1 cont'd: And again, the national underwriting stats probably do track citizenship status, so from that perspective it would imho push the overall risk mgmt view toward disfavoring non-citizens, albeit probably just a bit more.
6/16

Before next question, a tangent: If you don't have a relationship with a local branch / its mgr, or even if you do, another big help to get approved as a non PR/citizen is your realtor. Most have long relationships w/lenders. It helps a ton if they vouch / advocate for you.
7/16

It will benefit you to find a realtor who focuses on selling homes/condos (not just renting out/managing apts, for example) and has been doing it locally for a while. Ask around locally if possible. (PS: I am *not* that realtor, but can introduce you in Hachioji)
8/16

Q2: Can't these ppl just sell their home?

A2: Simple answer? Yes, BUT whether they'll be upside down (owe extra money) after selling is dependent on these and other factors:
-Home location/city & area market
-Home age
-Land size
-Whether loan was for max. possible amt
-Etc
9/16

A2 cont'd: If they're like most borrowers, they'll probably end up owing after a rush sale.

But virtually every property has potential buyers whose purchase would leave the homeowners owing less than if they ghost the loan. Bank gets sale proceeds as priority lienholder.
10/16

A2 cont'd: If I were these owners, I'd engage one of the many firms who buy up properties and get their quick appraisal, then go from there. If I were evil, and I swear I'm not usually evil, I would say: At least do such a short sale and *then* ghost to minimize the amt :)
11/16

Q3: Do Japan home property values usually depreciate, leaving borrowers upside down?

A3: Again, it depends, but land value doesn't generally fluctuate much (exception: new disaster zones). But most loan amts include land PLUS bldg cost—and bldg value *does* depreciate.
12/16

A3 cont'd: Especially if the loan was for a new home, it's unlikely the owner will get back what they owe when selling a now-used home. There are exceptions, but never bet on it. U.S. home market-style fluctuations don't happen here, whether up or down.
13/16

Some advice: To get a home loan in Japan as a non-PR/citizen, first establish local banking / realtor / general community relationships. They go such a long way, as w/many Japan things. Financial / job stability is of course huge too, but ppl advocating for you is enormous.
14/16

Advice, cont'd: If you have a citizen spouse who works, you can apply for a loan together, and approval will be much easier than a non-citizen alone. In practice, you'll each have separate personal loans and an equity split on the home title. (=best if you stay together）
15/16

I hope this is helpful. Again, it's just my view from a cheap part of Tokyo & as a definitely privileged white man. Circumstances and the degree to which non-citizens are disadvantaged varies a lot by bank/locale/nationality/ job. Try lots of banks and realtors!
END (maybe)

PS 1
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