The lender foreclosing on the home of retired Honolulu Police Chief Louis Kealoha and his former deputy prosecutor wife, Katherine Kealoha, said the Realtor handling the sale has a $1.3 million cash offer and is asking the court to approve the sale.
Hawaii Central Federal Credit Union sued for foreclosure last February claiming that the Kealohas stopped paying off their mortgage after a federal grand jury indicted them in October 2017 on conspiracy, obstruction and bank fraud charges.
The government had the foreclosure put on hold because the indictment identified the Mariners Cove home as a property eligible for forfeiture. It accused the Kealohas of lying on their application to secure the $1.04 million mortgage loan. It also agreed to let the credit union sell the home but to let the U.S. Marshals Service hold on to the proceeds pending the outcome of the Kealohas’ criminal trial.
The credit union said that as of Friday, the Kealohas owed $1,095,091.
It is asking the court to approve the sale of the home to buyer Michael Regan McKenna for $1,305,000 and to do so before the Kealohas go on trial on conspiracy and obstruction charges next month. They are scheduled to go to trial on the bank fraud charges in June.