If you have been to one of my continuing education courses it is easy to think I am picking on real estate licensees. Unfortunately, it is easy to become embroiled in litigation even when you have done everything appropriate in the representation of your client due to another agent acting less than diligent. However, real estate agents have by no means cornered the market in poor judgment regarding short sales.
U.S. District Judge John Corbett O’Meara recently sentenced Diane Hathaway to one year and one day in prison followed by two years of supervised release for bank fraud. Hathaway has served as a Michigan Supreme Court Justice (the state’s highest court) since 2008. Hathaway pleaded guilty in January to hiding assets in order to convince ING Bank to agree to the short sale of her home, which allowed her to shed some $600,000 in underwater mortgage debt. She apparently transferred two homes to her stepchildren, and then reclaimed ownership after the short sale was complete. Thereafter, Hathaway and her husband reportedly unloaded their $1.5 million home for $840,000.
Hathaway resigned from the bench in January. However, the Michigan Attorney General referred the matter to the State Bar for further investigation indicating that complaint “raises serious questions as to Ms. Hathaway’s fitness to practice law.”
PRACTICE POINTER: We should always keep in mind that our licenses to practice real estate (or law) are a privilege and not a right and that the appropriate degree of skill and care (and commonsense) should be exercised at all times.