Section 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.
[Eff 9/28/81] (Auth: HRS § 219-5) (Imp: HRS § 219-5, 7, 8)