Serratos v. Countrywide Home Loans CA2/6

Filed 12/4/13 Serratos v. Countrywide Home Loans CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

JUAN SERRATOS et al., 2d Civil No. B236996 (Super. Ct. Nos. CIV 245197 & Plaintiffs and Appellants, 56-2009-00361735) (Ventura County) v.

COUNTRYWIDE HOME LOANS et al.,

Defendants and Respondents.

Here a simple refinance of a residential mortgage turned into a complex problem. The facts involve, among other things, the borrowers' unsuccessful attempt to rescind the loan transaction, a title insurer's failure to disclose a recorded trust deed, the loss of funds deposited in escrow when regulators seized the escrow company, the borrowers' lawsuit resulting in a settlement requiring lender to make a new loan, a mistaken attempt at foreclosure, and the instant lawsuit where borrowers seek cancellation of the lender's notes and trust deeds and quiet title based on the settlement agreement. The court entered judgment for defendant lender. The court found the lender substantially performed the terms of the settlement. Lender offered to

modify an existing loan on the same terms as the new loan contemplated in the agreement. We affirm. FACTS Juan and Rosa Serratos (the Serratos), own a home in Port Hueneme. They refinanced their home loan a number of times. In March 2006, Citi Mortgage (Citi) held a first trust deed on the Serratos' home in the amount of $308,000. In that month, the Serratos obtained a home equity line of credit (HELOC) from Citi in the amount of $150,000. The Citi HELOC was secured by a second deed of trust. The Serratos wanted to refinance the first trust deed. They did not, however, want to refinance the Citi HELOC because it was being utilized by family members. A loan broker, 1st Mortgage, contacted the Serratos. 1st Mortgage had a broker agreement with Countrywide Home Loans, Inc. The agreement stated that the parties were independent of each other and that neither was a partner, joint venture, agent or employee of the other. The Serratos applied for a loan through 1st Mortgage. They disclosed the Citi HELOC. But through no fault of the Serratos, the Citi HELOC was not disclosed on the loan application. 1st Mortgage submitted the Serratos' loan application to Countrywide. Countrywide approved two loans: one for $432,000 (Loan 33) and another $54,000 HELOC (Loan 25) for a total of $486,000. After paying off Citi's first trust deed and costs, the loans would yield approximately $167,000 in cash to the Serratos. Countrywide believed its loans would be secured by first and second trust deeds. Countrywide was unaware of the Citi HELOC, and its title insurer failed to disclose it in its title report. Escrow closed and paid off the Citi first trust deed. But because Countrywide's title insurer did not report the $150,000 Citi HELOC, it was not paid. The Citi HELOC moved into first position with Countrywide's trust deeds in second and third positions.