Monet

FACTS

This litigation concerns a loan on a single-family residence located at 25111 Soquel San José Road, Los Gatos, Santa Cruz County (the Property). Christopher Monet and his wife, Kathee Lyda, acquired the Property in 1996. In 2000, Lyda and Monet transferred title to the property to the L & M Family Living Trust. Monet and Lyda refinanced the Property in January 2005 with a total loan package of $856,000. In June 2006, Monet and Lyda once again refinanced the Property with Countrywide Home Loans (Countrywide) and obtained the loan that is the subject of this litigation. As part of the June 2006 transaction, Monet and Lyda executed an interest- only adjustable rate promissory note (Note) for $868,000. The Note provided that the loan would be repaid over 30 years. To avoid default during the first five years, the borrowers were required to make interest-only payments at a fixed rate of interest of 6.125 percent, which amounted to monthly payments of $4,430.42. After five years, the loan would begin to fully amortize and the interest rate would become an adjustable rate based on the LIBOR (the London Interbank Offered Rate) plus 2.25 percent. The Note identified the “Lender” as…