Spires v G8

Court states homeowner would keep home if GE Money is same as G8 Capital. G8 falsely claims there is no relationship. Homeowner loses ocean view home.

• Spires v. G8 CAPITAL FUND VII, LLC et al

• 
  09-90133-LT
  

  Case type: ap
  Related bankruptcy: 08-13091-LT13
  Chief Judge: Laura S. Taylor
  Date filed: 03/26/2009
  Date of last filing: 01/12/2010
  Date terminated: 01/12/2010

  This case concerns a G8 foreclosure on a homeowner in Carlsbad, California. The homeowner put up a hell of a fight, but, in the end, G8 succeeded in taking the property away from the homeowner and his wife.

  A major part of the homeowner's argument in court was that he no longer knew who had possession of the deed on his house. Admittedly, when I read through the filing documents, my first reaction to the homeowner's argument was skepticism. I had read the debtor's original mortgage agreement, which included fourteen pages of opaquely written fine print so full of booby traps and stacked against the homeowner that I took his pleading as a somewhat desperate last ditch effort to keep his home.

  I would later learn that this homeowner's allegations were legitimate and, in fact, his objections were to what was standard operating procedure for G8.

  It's a tactic you might call the "foreclosure shuffle" and involves titles and deeds changing hands for no reason other than to make it more difficult for a homeowner already in distress to emerge from his or her difficulties.

  Here is the pertinent section of the court transcript:

  COURT : SO I'M GOING TO DENY THE MOTION. I UNDERSTAND WHERE YOU'RE COMING FROM, AND I WELL APPRECIATE HOW CONFUSING THIS RECORD IS. I HAVE TO SAY AGAIN — I'VE SAID IT TWELVE TIMES; I'LL SAY IT ONE MORE TIME — I DON'T THINK THE SOLUTION OF THE QUITCLAIM WAS THE ELEGANT ONE, AND I HAVE A FEELING THAT G8 WILL THINK BETTER NEXT TIME IT'S PUT IN THE UNFORTUNATE SITUATION OF HAVING TO CLEAN UP A RECORD OF HAVING A BETTER EXPLANATION IN THERE FOR WHAT THEY'RE DOING. I CAN'T FIND ANYTHING IN THIS RECORD THAT STRIKES ME AS NEFARIOUS OR INDICATES TO ME THAT G8 ISN'T IN SOME WAYS A VICTIM, AS WELL. THEY MAY WELL HAVE CLAIMS AT SOME POINT AGAINST G.E. MONEY BECAUSE IT APPEARS TO BE THE SECOND TRANSFER OF AN INTEREST IN A NOTE AND DEED OF TRUST ALREADY PROPERLY TRANSFERRED TO THEM THAT HAS CONFUSED THE RECORD AND HAS CAUSED THEM TO INCUR ATTORNEYS FEES; BUT, OTHERWISE, IT SEEMS A FAIRLY STRAIGHTFORWARD FROM THEIR PERSPECTIVE TRANSACTION TO ME. SO I'M NOT INCLINED TO CHANGE MY RULING.
  MR. REGO : I UNDERSTAND THE COURT'S ANALYSIS, YOUR HONOR, AND I APPRECIATE IT. JUST TWO REQUESTS: ONE, WOULD IT DIFFER THIS COURT'S OPINION IF G.E. MONEY AND G8 WERE ACTUALLY THE SAME ENTITY?
  THE COURT : WELL, IF THEY'RE EXACTLY THE SAME ENTITY — I MEAN, I HAD SOME QUESTIONS IN MY OWN MIND AS TO WHO THEY ARE.
  MR. REGO : UH-HUH.
  THE COURT : IF IT IS IN FACT AND INDEED — IF G.E. MONEY AND G8 — ONE'S AN LP AND ONE'S AN LLC, SO I'M NOT SURE THEY COULD BE; BUT, IF THEY WERE, SURE, BECAUSE AT THAT POINT THAT INTERMEDIATE TRANSFER WOULD BE A TRANSFER TO A THIRD PARTY AND THAT ONE WOULD BE GOOD. YOU HAVE THE QUITCLAIM BACK. SO I'D BE ASKING QUESTIONS ABOUT WHAT EXACTLY WAS GOING ON AT THAT PARTICULAR POINT IN TIME. AND TO THE EXTENT THEY'RE RELATED ENTITIES, THAT MAY EXPLAIN SOME OF THE QUICK AND DIRTY NATURE OF THE TRANSACTIONS; BUT, STILL, IF WE'RE LOOKING AT THAT SECOND SET OF TRANSFERS, ONCE TRANSFER FROM ENTITY A TO ENTITY B OCCURS, NOTWITHSTANDING THE RELATIONSHIP BETWEEN A AND B, IF THEY ARE IN FACT AND INDEED SEPARATE ENTITIES, THEN A DOESN'T HAVE ANYTHING LEFT TO TRANSFER AND ANYTHING IT DOES AT THAT POINT IN TIME CREATES A CLOUD ON TITLE AND IT'S A CLOUDABLE ACT OR A CLOUDING ACT AND IT'S IMPROPER. THEY PURPORTED TO TRANSFER WHAT THEY DO NOT OWN, AND YOU CANNOT TRANSFER AN INTEREST THAT YOU DON'T OWN. CERTAINLY, SOMEONE CAN RELY ON THAT TO THEIR DETRIMENT; BUT, ESPECIALLY IN THE REAL PROPERTY WORLD, ONCE THAT ASSIGNMENT WAS RECORDED EVEN THIS OTHER ENTITY, THIS PROPERTY ASSET MANAGEMENT, SHOULD HAVE BEEN ON NOTICE.
  MR. REGO : THANK YOU, YOUR HONOR. ALSO, TOO, ONE OTHER REQUEST, YOUR HONOR. MY CLIENTS ARE IN THE PROCESS OF PACKING UP. THEY WOULD REQUEST — AND THEY'LL PAY REASONABLE RENT, BUT THEY WOULD REQUEST ANOTHER TEN DAYS IF THE COURT IS SO INCLINED. THEY HAVE PUT APPLICATIONS IN AND THEY'RE GOING TO LEAVE, BUT THEY DO NEED SOME TIME.
  THE COURT : WHAT'S THE STATUS, MR. BRITTON, OF THE COURT ORDER FROM THE STATE COURT?
  MR. BRITTON : YOUR HONOR, THIS —
  THE COURT : I MEAN, I CAN'T DO ANYTHING WITH THE STATE COURT ORDER.
  MR. BRITTON : THIS ACTION'S BEEN PENDING. THEY AGREED, APPARENTLY, IN THE STATE COURT TO BE OUT. THEY GOT A CONTINUANCE FROM THE STATE COURT BASED UPON THIS HEARING. SO, YOU KNOW, THIS HAS JUST BEEN GOING ON AND ON AND ON AND ON. SO WE WOULD OBJECT TO ANY ADDITIONAL TIME.
  THE COURT : WELL, I DON'T THINK I HAVE JURISDICTION TO DO THAT. IF THERE'S A STATE COURT ORDER, I DON'T HAVE JURISDICTION. THE PROPERTY'S BEEN FORECLOSED, SO IT'S NO LONGER AN ASSET OF THE ESTATE. SO THAT WOULD, IN EFFECT, BE AN INJUNCTION AND YOU DON'T WANT TO BRING THAT ACTION. WHAT I WOULD OFFER HERE IS THAT, MR. BRITTON, IF THEY'RE WILLING TO PAY RENT, THE FOUR OF YOU ARE HERE AND I SUGGEST YOU TALK BECAUSE I THINK, AT THAT POINT IN TIME, IF THEY NEED TIME TO GET OUT, THE QUICKEST WAY TO GET YOUR NAME IN THE PAPER IS TO SAY: NO, WE'RE TAKING YOUR HOME. WE WON'T TAKE YOUR RENT FOR TEN DAYS. SO I WOULD STRONGLY SUGGEST THAT A BUSINESS RESOLUTION BE REACHED.
  MR. REGO : YOUR HONOR, THE LENDER AT THEIR REQUEST DID A WALK-THROUGH OF THE PROPERTY. SO THEY'VE BEEN ABLE TO SEE THE PROPERTY, SO THEY'VE BEEN ALLEVIATED OF ANY CONCERN THAT THE PROPERTY IS GOING TO BE SEVERELY DAMAGED. SO, YOU KNOW, I JUST THINK IT'S REASONABLE. I'M SURE THAT, IF WE GO BACK TO THE STATE COURT, THAT THE COMMISSIONER WOULD PROBABLY GIVE US THE ADDITIONAL TIME; BUT SINCE WE'RE HERE THIS MORNING AND TO ALLEVIATE YET THE NEED FOR ANOTHER EX PARTE APPEARANCE, THAT'S WHY I'M MAKING THE REQUEST.
  THE COURT : WELL, AND, AGAIN, I THINK IT'S MORE A QUESTION OF JURISDICTION. HAVING DETERMINED THAT I'M NOT GOING TO STEP AWAY FROM MY PREVIOUS ORDER, STAY OF RELIEF'S BEEN GRANTED, AND THAT WOULD BE A REIMPOSITION OF THE STAY.
  MR. REGO : THAT'S TRUE.
  THE COURT : I DON'T THINK I HAVE THE POWER TO DO THAT. I AGREE WITH YOU THAT IT'S A REASONABLE REQUEST PROVIDED THAT MARKET RENT IS PAID AND PROVIDED THAT, AS I BELIEVE TO BE THE CASE, NO DAMAGE TO THE PROPERTY WOULD OCCUR. THIS IS JUST ALLOWING PEOPLE TO WITH DIGNITY LEAVE THEIR HOME, AND I WOULD STRONGLY URGE THE LENDER TO ALLOW THAT TO HAPPEN. AND YOU CAN QUOTE ME TO THE COMMISSIONER IF YOU GO IN FRONT OF HIM OR HER.
  MR. REGO : THANK YOU, YOUR HONOR.
  MR. BRITTON : YOUR HONOR, WE WILL DISCUSS THAT AFTER THIS. JUST TO CLARIFY THE RECORD, MR. GILLILAND INDICATED TO ME THAT THERE IS NO RELATIONSHIP BETWEEN G.E. AND G8 CAPITAL. G.E. WAS APPARENTLY OWNED BY LEHMAN BROTHERS, AND G8 IS A VENTURE CAPITAL FIRM. NO RELATIONSHIP WHATSOEVER.

  [Rego's question concerned GE Money and G8 Capital, and there absolutely was a relationship. GE Money became GE Capital which bought Moneyline and became GenPact Mortgage Services. Evan Gentry, CEO of G8 was also CEO of both GenPact and Moneyline.]

  THE COURT : ALL RIGHT. WELL, IT WAS AN INTERESTING QUESTION. AND THE "G'S" DID IT. IT'S ALWAYS POSSIBLE WHEN YOU HAVE — IN THIS WORLD OF INITIALS, I DO WONDER. SO THANK YOU FOR CLARIFYING THAT.
  MR. BRITTON : AS A COMMENT, "G" FOR GREED.
  THE COURT : WELL, THAT COULD BE.
  MR. BRITTON : NO DISPARAGING THE PARTIES.
  THE COURT : NO OFFENSE TO ANYONE. TO YOUR CLIENT, NO. ALL RIGHT. SO, MR. BRITTON, YOU MAY SUBMIT THE ORDER SINCE IT'S IN YOUR FAVOR, AND WE WILL TAKE THAT EXPENSE AND BURDEN OFF MR. REGO. MR. REGO, THANK YOU FOR YOUR REQUEST. WELL ARGUED, BUT I CAN'T AGREE WITH YOUR FACTUAL ASSUMPTIONS.
  MR. REGO : THANK YOU FOR THE COURT'S TIME, YOUR HONOR.
  THE COURT : THANK YOU.

  (WHEREUPON, THE PROCEEDINGS ADJOURNED.)

  It is plain that G8 wrongly took this couple's home. Not only did they engage in mortgage fraud, they lied about it in court.

 

1. CHAPTER 13 STATEMENT OF CURRENT MONTHLY INCOME AND CALCULATION OF COMMITMENT PERIOD AND DISPOSABLE INCOME (28pp)
2. COMPLAINT : Spires v G8 Capital, MERS (36pp) (2006-03-26)
   1. 1Cause of Action
   2. 18Legal Description of Property
   3. 19Balloon Note (Jan 12, 2007)
      1. Pay to the Order of WMC Mortgage Without Recourse, Jessica Fuentes, Assistant Secretary, GE Money Bank
      2. Pay to the Order of Without Recourse, Jessica Fuentes, Assistant Secretary, WMC Corp
   4. 22Deed of Trust (Jan 11, 2007) ($640,000)
      1. requestor: First American Title
      2. return: WMC Mortgage
      3. lender/preparer: GE Money
      4. trustee: Westwood Associates
      5. nominee for the lender and beneficiary of security: MERS, Del corp w office in Flint, MI
      6. Riders
         1. balloon rider
         2. planned unit development rider
      7. Community Assoc fees, dues, assessments
      8. Mortgage Insurance - wow
      9. Lender's right to sell debt at will and without notice
      10. Substitute Trustee
      11. Prepayment - the works
3. Memorandum of Points and Authorities in Adversarial Case (7pp) (March 26, 2009)
4. Service Temporary Restraining Order (2pp) (March 26, 2009)
5. Memorandum of Points and Authorities in Adversarial Case (7pp) (March 26, 2009)
6. First Amended Adversarial Complaint (20pp) (April 28, 2009)
   1. Illegally assigning title
   2. Being sued across country (presumably MERS)
7. Motion for Temporary Restraining Order (pp7) (April 29, 2009)
   1. G8 Had no right to modify deed of trust
   2. G8 had no right to profit from deed of trust
   3. Violations of Truth in Lending Act render underlying note null and void.
   4. Demand G8 show it is real party of interest
8. Request for Emergency Hearing and Notices(21pp) (April 28, 2009)
9. Request for Expedited Emergency Hearing, Emergency Stay Granted (5pp) (signed 4/13, filed 4/28, entered April 29, 2009)

Statement of Debtor in which debtor claims he doesn't know who "Peppertree Financial", which apparently, with debtor, executed transfer of property to G8, is.

10. Counsel's Statement in Support of Above (2pp) (April 28, 2009)
11. G8's Opposition to Debtor's Request for Expedited Emergency Hearing (6pp) (May 14, 2009)
12. Debtor's Response (29pp) (May 19, 2009)

This lays out a clear account of how the substitution/debt re-assignment/razzle-bedazzle-kafrazzle fraud works. The entire exec staff at G8 should be lined up against a wall and shot.

13. Statement from Debtor (lays out details) (15 pp) (May 19, 2009)
14. Request for Expedited Emergency Hearing on Motion to Set Aside Foreclosure Sale Denied (pp4) (July 27, 2009)
15. G8's Opposition to Set Aside Foreclosure Sale (15 pp) (July 8, 2009)
16. G8's Answer to First Amended Complaint (pp 8) (July 9, 2009)
17. Debtor's Answer (25 pp) (July 10, 2009)
18. Transcript of Hearing, G8 Perjury re: MoneyLine (23 pp) (October 6, 2009)
19. Case Dismissed
20. Notice