Handbrake doesn't engage on rear passenger wheel! And which brake pads?

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2003.5 Mazda Protege5
I got another P5 last week to replace my old totaled one.. it was out of state, so now I need to get an in-state inspection. It should pass effortlessly, but I came across an issue a couple days after I bought it; the handbrake doesn't hold the car firmly - it's quite noticeable if you live in a town with the word "Hill" in it (lol2). The brake seemed fairly centered when rolling backwards down hills, so I thought that it only needed a handbrake lever adjustment (center console), but after taking a look at all the brake pads, it turns out that the brake doesn't hold the passenger rear at all. The cable itself wiggles a tiny tiny bit, but the physical brake is stone - nothing moves at all. Any clue what could be wrong? I cleaned up some of the rust on the throttle end and it moves if you hit it a bit, so something is wrong with the cable or the handbrake lever...?

Also, which brake pads are recommended? Purely street city driving, so far with what I've seen it's either between Hawk HPS ($70 front, $55 rear), Duralast Golds ($37, $35), or Gold CMax'es ($50, $50) - I'm leaning a bit towards Duralast Gold CMax'es in the front because they are cheaper, ceramic, and more readily available. As for the rears...?

edit: perhaps Gold CMax on the rear as well? Supposedly they have a lifetime warranty that even covers regular WEAR of the pads?!
 
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1. I recommend HAWK HPS (less dust and a wee bit more bite). (Think about it. If the pads are promised 'last a long time' they are not wearing (and not really 'stopping' you either...)

2. 'When' you change pads, ensure the caliper pins are corrosion free and lubricated.

3. On the rears inspect the parking brake arm for movement. With the p/b off - you should be able to push the arm in by hand. If you can't - spray WD-40 until you can... (Or replace the caliper).

4. When you install the new rear pads you must reset the calipers (take a bolt off the back that exposes an allen key adjuster). After you have installed the new pads you will turn the allen key screw 'in' until the pads begin to rub the rotor (as you spin it). Back off the screw just a bit.

5. NOW you can adjust the p/b at the handle (10mm bolt) to get the right tension. Test the rears (while jacked) to ensure the brakes do not drag with handle off.
 
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