Mich. SC justice under scrutiny for real estate transactions

Jessica M. Karmasek May 16, 2012, 2:24pm



DETROIT (Legal Newsline) - Michigan Supreme Court Chief Justice Robert P. Young Jr. is asking a fellow justice to respond to recent allegations that she engaged in suspicious real estate transactions.

Last week, WXYZ-TV in Detroit aired a story about Justice Diane Hathaway, questioning how ethical she was in convincing her bank to let her out of her mortgage on her Lake St. Clair, Mich., home.

According to the television station's report, which aired on its 11 p.m. newscast May 9, the justice convinced her bank last November that she couldn't afford to keep making payments on the home, even though her other lakefront home in Florida was paid for.

Hathaway's bank apparently allowed her to do a short sale.

A short sale is often used as an alternative to foreclosure because it reduces additional fees and costs to both the creditor and borrower.

WXYZ reported that the transaction was just part of a "strange real-estate shuffle."

In response, Young issued a statement Thursday morning, saying he was concerned about the allegations.

"Ordinarily, the financial transactions of any person, including a justice, are personal matters. However, the WXYZ story raises very serious allegations about Justice Diane Hathaway's financial transactions. I am naturally very concerned about these allegations," he said.

"Because media allegations are just that and may fail to include a complete picture of a complex set of financial transactions, this morning I advised Justice Hathaway to respond publicly to these allegations to clear the air."

The chief justice said he would not comment further on the allegations.

Before being elected to the state's high court in 2008, Hathaway, a daughter of a Detroit police officer, served as judge on the Wayne County Circuit Court for 16 years. She was first elected to the court in 1992 and then reelected in 1998 and 2004.

According to her biography on the Court's website, Hathaway obtained her real estate broker's license and worked in both radiology and real estate while raising her children and attending college.

She earned her law degree from the Detroit College of Law, now known as the Michigan State University College of Law, in 1987.

While in law school, Hathaway worked as a research clerk at the Wayne Circuit Court and Detroit Recorder's Court. She also taught real estate law and continuing education classes to real estate brokers.

She has refused to comment on WXYZ's allegations.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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