Haw. Code R. § 4-9-8 - Security for loans
(a) For purposes of
class "A" and class "C" facility loans, no loan shall exceed eighty five per
cent of the value of the security offered; for purposes of class "B" loans and
class "C" operating loans, the ratio of loan to the value of the security
offered shall be discretionary with the department.
(b) All security instruments for the purposes
of direct loans shall be executed to and by the department; for purposes of
insured loans all security instruments shall be executed to and by the private
lenders; for purposes of participating loans all security instruments shall be
executed to and by the department and the private lender jointly.
(c) In case of the sale or transfer of
mortgaged land or other collateral, the department may permit the item to be
assumed under the following conditions:
(1)
Where the purchaser is a qualified aquaculturalist; or
(2) Where the purchaser may not be a
qualified aquaculturalist when the sale has been advertised for a reasonable
period of time and no qualified aquaculturalist is willing to purchase the farm
or item; or
(3) Where the purchaser
continues aquaculture operations and complies with conditions as set forth in
chapter 219, HRS, and rules as prescribed herein.
(d) In case of the death of the borrower, a
legal heir or legal representative shall have the option within six months of
the death to assume the mortgage of the deceased. The department or its agents
may, pending the exercise of the option and pending possession being taken by
the heirs or representatives, take possession of all mortgaged property and
carry on the aquacultural operation connected therewith, and the expense of the
same shall be added to the principal due on the mortgage to bear interest at
the applicable rate.
(e) If a loan
is approved by the board, the division shall cause the title to real property
to be examined and a mortgage drawn and recorded. The applicant shall pay the
actual costs involved.
Mortgages, title insurance, notes, security and financing statements shall be used as security instruments as applicable collateral.
Notes
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