Bank objects to Scranton’s petition for conservatorship over blighted house

SCRANTON — A bank holding two mortgages on a blighted home at 25 New York St. opposed the city’s petition to acquire and rehabilitate the property through a legal step called a conservatorship.

The Scranton Redevelopment Authority filed a petition Dec. 30 in Lackawanna County Court for the SRA to be designated as the conservator of the vacant house that has been condemned since 2023. It’s the first such conservatorship petition pursued by the city using a state conservatorship law that gives municipalities a condemnation avenue in the court system as a tool to fight blight.

Lackawanna County Judge Mark Powell heard the petition Wednesday but did not immediately issue a ruling.

Attorney Mario Hanyon, representing Wells Fargo, which is a senior lien holder of two mortgages on the house, argued against a conservatorship because it would push the liens down in rank and priority and negatively affect the bank. The property owner, John McHale, is not in mortgage default, Hanyon said. Since Wells Fargo learned of the city’s conservatorship petition, the bank has taken steps to secure and maintain the property.

“There’s no need for a conservatorship to come in,” Hanyon contended.

McHale did not attend the hearing. Efforts were unsuccessful after the hearing to contact him.

Powell identified two issues at the crux of the petition: whether McHale had been given proper notice of the action and whether the city has proven the property is blighted.

SRA Solicitor Samantha Hazen detailed the agency’s “exhaustive efforts” to notify McHale of the conservatorship petition. Those included posting notices directly on the New York Street house, sending certified mail to other addresses for McHale that came back as undeliverable, and twice sending a representative to an address in Throop for McHale, where both were unsuccessful in serving notice on him in person.

The SRA also had asked Wells Fargo if it wanted to be conservator of the property, but the bank declined, Hazen said.

Hanyon argued that McHale’s residency and thus adequate notice remained unclear. Powell asked if the client of Wells Fargo used the Throop address to pay the mortgage on the property in Scranton. Hanyon said he did not know, but noted that checks to pay the loan probably did come from the Throop address.

Powell wanted more information from the SRA on the blighted status of the property. After he receives that information, Powell would soon render a decision, he said.

Details in the city’s petition include:

• Lienholders in the property include the city of Scranton, the Scranton Sewer Authority and the former Wachovia Bank; and it is not subject to an existing foreclosure action.

• Condemned since Aug. 23, 2023, the house has been vacant and not legally occupied for at least the prior year, nor has it been actively marketed for sale. A city exterior inspection in October determined the property can be rehabilitated, as there was no evidence of structural movement or problems, and the walls, roof and chimney appeared to be undamaged.

• “For years, the property has been the subject of several complaints, including high weeds, grass or plant growth that blocks the sidewalk for pedestrians”; the property is “unfit for human habitation” due to its vacancy with no utilities; it increases the risk of fire to it and adjacent properties; and it’s a nuisance that could attract children.

• “The dilapidated appearance and condition of the property negatively affect the economic well-being of residents and businesses in close proximity, including decreases in property values.”

• The SRA has the financial resources from the city to rehabilitate the building, but it also cannot estimate the total cost because the inspection was limited to the exterior. If appointed as conservator, the SRA would then provide a more detailed plan for rehabilitation.

After the hearing, SRA Executive Director Andrew Cutillo said of the condemned house and petition, “This is exactly what a conservatorship is for.”

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A condemnned house at 25 New York St. in Scranton on Wednesday, March 4, 2026. (JIM LOCKWOOD / STAFF PHOTO)

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A condemnned house at 25 New York St. in Scranton on Wednesday, March 4, 2026. (JIM LOCKWOOD / STAFF PHOTO)

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A condemnned house at 25 New York St. in Scranton on Wednesday, March 4, 2026. (JIM LOCKWOOD / STAFF PHOTO)

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A condemnned house at 25 New York St. in Scranton on Wednesday, March 4, 2026. (JIM LOCKWOOD / STAFF PHOTO)

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A condemnned house at 25 New York St. in Scranton on Wednesday, March 4, 2026. (JIM LOCKWOOD / STAFF PHOTO)

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