S.C.R. NO.














requesting the mortgage foreclosure task force to study the Radha loan system.



     WHEREAS, a new mortgage product, the Real Estate Association for Depreciating Housing Assets (RADHA) loan, which is modeled after the leasing system commonly used in the automobile industry, has the potential to prevent mortgage foreclosures while also benefiting the lending industry; and


     WHEREAS, the RADHA loan, also known as the Fast Equity Builder, reverses the traditional 80/20 mortgage loan and, as a result, has the potential to reduce monthly payments by twenty-five to fifty per cent; and


     WHEREAS, the RADHA loan is divided into two trusts, with the first trust consisting of five to twenty per cent of the total mortgage scheduled to be repaid in the first three to five years of the entire loan period; and


     WHEREAS, the remaining eighty per cent of the loan is kept by the lender in the second trust at a low interest rate of one to three per cent during this initial three to five year period, which is offset by the capital infusion lenders receive at the beginning of the initial three to five year period; and


     WHEREAS, the equity on the property builds up to twenty per cent in three to five years, making sale or refinancing that much easier for both homeowners and lenders; and


     WHEREAS, in response to the upheaval throughout the home lending industry and the resulting mortgage foreclosure crisis in Hawaii and elsewhere, the Legislature, through Act 162, Session Laws of Hawaii 2010, established the Mortgage Foreclosure Task Force within the Department of Commerce and Consumer Affairs to undertake a comprehensive study to develop both general and specific policies and procedures necessary to improve the manner in which mortgage foreclosures are conducted in the State and to submit a final report to the Legislature twenty days prior to the convening of the Regular Session of 2012; now, therefore,


     BE IT RESOLVED by the Senate of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2011, the House of Representatives concurring, that the Mortgage Foreclosure Task Force is requested to study new and innovative methods to alleviate the mortgage foreclosure crisis, including the effect the RADHA loan system may have on reducing foreclosures; and


     BE IT FURTHER RESOLVED that the Mortgage Foreclosure Task Force is requested to include its findings and recommendations, including any proposed legislation, with respect to the RADHA loan system in its final report to the Legislature pursuant to Act 162, Session Laws of Hawaii 2010; and


     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Chairperson of the Mortgage Foreclosure Task Force and the Director of Commerce and Consumer Affairs.









Report Title: 

Mortgage Foreclosures