Saturday, June 8, 2013

Ex-Michigan High Court Justice Gets 366 Days For Illegal Short Sale Shuffle Intended To Wipe Out $600K In Mortgage Debt On Underwater Home While Leaving Lien-Free Florida Residence Untouched

In Ann Arbor, Michigan, USA Today reports:

  • Former Michigan Supreme Court Judge Diane Hathaway was sentenced to 12 months and one day behind bars Tuesday for bank fraud.

    Hathaway, who pleaded guilty in January to misleading her bank during a short sale of her Grosse Pointe, Mich., home, also is to pay $90,000 in restitution and will spend two years on probation. It is unclear where she will serve her sentence.
  • Hathaway, who also held a real estate license, retired Jan. 21 amid the scandal involving the sale of her home.

    Hathaway was charged with and pleaded guilty in January to one count of bank fraud after investigators said she moved ownership of property in Florida to relatives so she could qualify for the short sale. Short sales are when a bank allows a sale for a home for less than is owed by the mortgage holder, typically when property values fall.

    Hathaway's short sale in Michigan erased nearly $600,000 in mortgage debt on the $1.5 million Grosse Pointe Park home on Lakeview Court, which eventually sold for $850,000. The debt-free Windermere, Fla., home then went back into Hathaway's name.

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