Neighbors' feud leads to investigation

First there was the property transaction that went sour, then came the calls to police about loose dogs, manure in a mailbox, the death of a chicken, the disappearance of the culpable canine and charges of harassment.

What began as a dispute between Parker Road neighbors Barbara H. Willis and Robin D. and Penny I. Malone has now led a state investigation into whether Gouverneur Savings & Loan has been involved in improper lending practices with Ms. Willis, director of North Country Affordable Housing Inc., Watertown.

Although she and the bank both vehemently deny the charge, the allegation has Ms. Willis fearing for her job.

Mrs. Malone said she began to seek an investigation after hearing that other neighbors on Parker Road were allegedly being turned down for mortgages and loans similar to the ones Ms. Willis was receiving.

"We're watching this person get loan after loan," Mrs. Malone said. "If it's a bad bank, I think the bank needs to be held to account. What's fair for one person should be fair for everybody."

Ms. Willis, however, said the latest allegations are part of a long-standing feud between the neighbors that has already involved the state Department of Environmental Conservation, state troopers, Jefferson County sheriff's deputies, the town of Hounsfield code enforcement officer and the town dog warden.

And Richard F. Bennett, president and chief executive officer of Gouverneur Bancorp, issued a warning about Mrs. Malone's claim: "She'll need to be careful about making false statements."

A HOUSE IS SOLD

Problems between the neighbors can be traced to December 2005, when Ms. Willis agreed to sell her 16475 Parker Road residence to the Malones. She also agreed that the Malones would have right of first refusal on the 11.28 acres at 16500 Parker Road, where she was turning a grainery into her new home.

By the time the sale of 16475 Parker was finalized in February 2006, both sides were accusing each other of intentional delays.

After the closing, problems persisted. The Malones called DEC after finding Ms. Willis's dogs on their property. They were the second neighbors to do so, and Ms. Willis was fined $25 for allowing her dogs to run on lands inhabited by deer.

When some of the Malones' chickens wandered onto Ms. Willis's property, her dog Annie killed one. Her dog Bissell followed them back across the road. The Malones called state police. Annie disappeared at Thanksgiving time and has not been seen since.

In November, the Malones called the Jefferson County Sheriff's Department with reports of abandoned vehicles on the Willis property. They called again in March, alleging aggravated harassment after Ms. Willis distributed fliers about them in the neighborhood.

Ms. Willis, who also called the Times about the Malones, said she wanted neighbors to be aware that Robin Malone had been charged with petit larceny and seventh-degree criminal possession of a controlled substance in March after he allegedly stole oxycodone tablets from a Watertown woman. The case is scheduled to be heard June 19 in Brownville Town Court.

Ms. Willis said that she has found manure in her mailbox, has had the police called on her handyman after he drove down the road on a four-wheeler and has seen the Malones videotaping her and her friends at night, while they were around a bonfire.

"I'm only giving this litany to demonstrate that I think they're crazy," she said. "I don't know what their problem is."

In May, Ms. Willis called the Sheriff's Department alleging the incidents, going back two years, constituted harassment. Deputies were not able to substantiate the harassment charge, Sgt. Joseph F. Cullen said.

"It gets to be a gray area when dealing with these situations over a long period of time," Sgt. Cullen said. "These types of harassments are hard to prove."

PEERING INTO THE PUBLIC RECORD

In the meantime, Mrs. Malone said, the couple had watched Ms. Willis develop 11.28 acres of woods and wetlands that she believes should be unusable. Since the Malones have the right of first refusal on the property, Mrs. Malone said, she is concerned about potential problems with the deed. Earlier this year, she obtained copies of all of the public documents concerning Ms. Willis, including mortgages going back to the 1980s.

"What prompted it was the fact that a neighbor on a back road from us had to pull his home from the market because no one could secure the financing," she said. "It wasn't out of bad blood. I pulled up her deed because we had the right of first refusal and I wanted to make sure it stays clean."

In April, Mrs. Malone gave the Times 16 pages of mortgage information on Ms. Willis she found in Jefferson County public records.

Mrs. Malone had discovered that the director of North Country Affordable Housing, whose goal is to provide affordable housing opportunities for the region's low- and moderate-income population, had financial issues of her own.

After a personal bankruptcy with two vehicle repossessions, Ms. Willis had foreclosure proceedings started on her house in 2005 by HSBC, had a mechanic's lien placed on her in January 2006 and had then taken out several mortgages and loans between December 2006 and this March.

Mrs. Malone said she felt the couple had to speak up after hearing that other neighbors on Parker Road were being turned down for mortgages and loans while Ms. Willis was able to secure financing to extensively renovate her home.

While Mrs. Malone guessed that Ms. Willis had poor credit and little equity, Ms. Willis estimated her own score at fair to good.

She said a personal bankruptcy she filed in 2000, following financial problems with a former business partner, was discharged in June 2004. Ms. Willis said she chose not to reaffirm the loan on two of her vehicles and told the bank to retrieve them.

The foreclosure proceedings on 16475 Parker Road started a few months after North Country Affordable Housing temporarily lost funding and Ms. Willis agreed to take a 50 percent cut in pay.

"For a period of six months I chose to take the cut in pay because I made more than the rest of the staff and I wanted to keep my staff together," she said.

In August 2005, she was negotiating to reinstate and refinance her mortgage, she said.

"I was doing everything I could to keep my property, and in fact did," Ms. Willis said.

By the time the sale of her home on Parker Road went through, Ms. Willis had reinstated her mortgage and was back in legal control of the property.

The mechanic's lein was based on an account Ms. Willis set up at White's Lumber to buy materials to finish 16500 Parker Road. The almost $25,000 account was settled after the sale of her former home closed, she said.

Navigating through the land records, Mrs. Malone confirmed her suspicion that Ms. Willis did not have a well at her 16500 Parker Road home. Suspecting this might disqualify her from borrowing money, Mrs. Malone asked other neighbors to help call area banks and find out if property without a water source qualified for a loan.

"No one wanted to give a loan without a well; they don't want to take it as a risk," Mrs. Malone said. "A bell went off to all of us. You can't sell the place; you can't get a loan from the bank to drill a well."

Mrs. Malone turned over her findings to the state attorney general's office. The state Banking Department, the agency that oversees savings and loans, has since opened an internal investigation into the matter.

Mr. Bennett, chief executive officer of Gouverneur Bancorp, the association's parent company, said there had been no preferential treatment based on Ms. Willis's position.

"We obtained an outside appraisal with an outside appraisal service to substantiate what we did," he said.

Told that banking commission investigators are looking into the case, Mr. Bennett said he would have to speak to his lawyer.

A FINAL OUTCOME?

For her part, Ms. Willis said she believes the controversy is just the latest in a series of attacks intended to drive her off her property.

Adamant that nothing can make her leave her home, Ms. Willis said she fears that her reputation may be damaged by the latest allegation, or that she could even lose her job.

"The truth doesn't seem to matter," she said. "Where does it stop?"

North Country Affordable Housing board member Sarah M. Rolland agreed that there are growing concerns that the latest allegation might create a taint, real or perceived, for the agency.

"Our concern is more so that whatever is happening between Barb and the Malones doesn't cause a negative impact on Affordable Housing," she said. "We don't want to see these activities cloud over the organization itself."

Ms. Willis said an appraisal on her home at 16500 Parker, done by an independent company hired by the bank, put the estimated value at $129,000. Her only outstanding loan is one she took out in March for $93,000, based on the appraisal.

"I don't know what neighbors have the same situation I do or even close to it," she said. "They're mostly mobile homes."

According to several local banking and real estate experts contacted by the Times, not having a water source on a piece of property does not necessarily disqualify a borrower from mortgages or other loans.

As long as the loan is not sold on the secondary market, banks can be more flexible when it comes to lending policies. Lance M. Evans, executive officer of the boards of Realtors in Jefferson, Lewis and St. Lawrence counties, said a bank might require more collateral in such a situation, rather than turning down the request entirely.

"You might have to shop it around a bit, or you might have to do a little bit of extra work or put money down," Mr. Evans said. "It's harder to get, but not impossible."

Echoing local bank officials, Mr. Evans said banks also take into consideration how long they have worked with a particular customer or that person's standing in the community when they determine whether to lend money in any given situation.

"Everyone's situation with a bank is different; every bank has a little different policy," he said. "This is still an area where you know your neighbors and I think a trust builds up sometimes."

There are two large ponds next to Ms. Willis's home, but all of the water used in her home is trucked in and stored in a tank. She said she had never told anyone she had a well.

After Ms. Willis learned about the allegations that she had used her position to secure a loan, she reviewed the appraisal that had been conducted on her property and found a small mistake.

"The private appraisal the bank did said I had a well," she said.