Did a Michigan Supreme Court Justice play a shell game to get out from her underwater home?

Behind the stone walls of the gated Windermere Country Club are some of Central Florida’s nicest homes. And nestled along the rolling fairways of its 18-hole golf course, you’ll find a 4,300 square foot home on beautiful Lake Crescent. Complete with a pool and private boat dock, it was valued last year at almost $740,000.

And its owner is crying poor.

The owner is Justice Diane Hathaway. Last November, she convinced her bank she didn’t have the money to keep making payments on her Michigan home on Lake St. Clair, even though she owned her Florida lakefront home free and clear.

In fact, records show in a little over a year, she’s owned four homes: one in Florida, and three in Grosse Pointe Park.

The homes are a part of a dizzying property shuffle that experts say raise ethical and legal questions, but Justice Hathaway has been ducking those questions for more than six weeks.

Hathaway was a Wayne County Circuit Court judge before being elected to Michigan’s highest court in 2008. She ran as an ethical and accountable judge.

But records obtained by 7 Action News have some asking if she was she ethical in how she convinced her bank to let her out from her mortgage on her Lake St. Clair home. It saved her potentially hundreds of thousands of dollars in unpaid mortgage payments.

Hathaway was allowed to do what’s called a short sale. That’s when a homeowner convinces the bank to sell their home at a loss rather than go into a foreclosure. In this economy, with home values plummeting, lots of people try to do the same thing, dodging their debt through a short sale.

But not everyone gets one. To qualify, a homeowner needs to prove to their bank that they can’t afford to keep making their mortgage payments because they’ve suffered some type of hardship, like a loss in income. The process can take months, if not years as Don Marquette learned. When times got tough, his grown-children moved in with him and his wife, and then she lost her job.

He was supporting five adults on his own, so he asked his bank for a short sale, but they wouldn’t approve it. The bank kicked him and his family out of their home.

“It was mortifying,” Marquette said.

“I’m 60 years old, I’ve worked 28 years, I’ve worked all my life. Basically I felt like a bum.”

Hathaway’s story was different. She hasn’t had a shortage of homes to live in. There’s home #1 in Florida valued at about $740,000 that she and her husband bought in 1999. Two years later, they bought home #2 on Lake St. Clair.

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