Katrenick

FACTS

In reviewing the propriety of a trial court order sustaining a demurrer, we accept as true all factual allegations properly pleaded. (Gu v. BMW of North America, LLC (2005) 132 Cal.App.4th 195, 200.) Accordingly, our summary of the facts is drawn from the allegations of the second amended complaint, the documents attached thereto, and facts the court properly judicially noticed. (Ibid.) Katrenick owns a single-family residence in San José, California (the Property). In May 2005, Katrenick refinanced the Property and obtained the loan that is the subject of this litigation. As part of the transaction, Katrenick executed an interest-only, adjustable rate promissory note (Note) for $558,000. The Note provided that the loan would be repaid over 30 years. To avoid default during the first seven years, the Note required Katrenick to pay interest only at a fixed rate of 5.875 percent, which was $2,731.88 per month. After seven years, the loan would fully amortize and the interest rate would adjust every year. The adjusted interest rate would never be less than 2.25 percent or more than 10.875 percent. The loan was secured by a deed of trust on the Property (Deed of Trust). The…