Unable to reach a settlement with a woman who made three years of mortgage payments on a property she didn't own, Peoples Neighborhood Bank is filing formal eviction notices against Shelia M. Layo.
Due to the failure of an attorney to file a deed, Ms. Layo for more than three years made regular mortgage payments to the bank on a home that remained deeded to the seller. When she found out by accident while trying to refinance with another bank, she stopped making payment on the home on McCarthy Street in the Minooka section of Scranton until the bank remedied the situation and sued.
Now Peoples Neighborhood Bank, having acquired the deed and unable to reach a settlement with Ms. Layo, filed a complaint to evict her from the property, saying she has no legal right to be there.
Ms. Layo's attorney, Brian Monahan of Easton, said the attempt to evict his client is a continuation of the bank's "deceptive practices."
"I'm not surprised they are continuing to trample Ms. Layo's rights," Mr. Monahan said.
The move follows a breakdown in attempts to settle the matter. The bank offered to deed the home to Ms. Layo, credit her mortgage with all the payments made, waive late fees, and offer her a lower interest rate, said Peoples Neighborhood Bank President Alan Dakey. Ms. Layo's demands - full possession of the house, refund of her three years of mortgage payments plus attorney's fees and expenses - was too much for the bank, Mr. Dakey said.
In this case, the attorney was now-disbarred Richard Hallock, working for Ohio Bar Title Insurance Co., who failed to file the deed and absconded with some of the closing money. The bank blames Ms. Layo for "choosing Mr. Hallock to represent her," although Mr. Dakey concedes that Mr. Hallock was also working for the bank.
"She chose her attorney and we have documentation to establish that," Mr. Dakey said. "He did not represent her properly and she has been residing at the property without making payments."
Ms. Layo said the bank knew - or should have known - that the real estate closing was incomplete.
It's a sad situation, said William "Chip" MacKrides, a real estate specialist with the state Bar Association, arising from the complexity of a real estate closing. "The bank has got to be careful, because the plaintiff's attorney could prove a fiduciary duty or show the impression of a fiduciary duty," he said. "Sometimes the parties involved and the attorneys, through absolutely no malice, find themselves unable to see some of these issues."
Contact the writer: dfalchek@timesshamrock.com