New York Laws
Article 4 - Limited Dividend Housing Companies
94 - Foreclosure.

§ 94. Foreclosure. 1. In any foreclosure action the commissioner, and
the municipality if it has made a loan to the housing company, in
addition to other necessary parties, shall be made parties defendant;
and the commissioner and the municipality shall take all steps in such
action necessary to protect the interest of the public therein, and no
costs shall be awarded against him or the municipality. Foreclosure
shall not be decreed unless the court to which application therefor is
made shall be satisfied that the interests of the lienholder or holders
can not be adequately secured or safeguarded except by the sale of the
property. In any such proceeding, the court shall be authorized to make
an order increasing the rentals to be charged for the housing
accommodations in the project involved in such foreclosure, but not
exceeding the maximum average rentals fixed herein, or appoint the
commissioner as a receiver of the property and in the event the
municipality has made a loan to the housing company, appoint an officer
or employee of the municipality, or grant such other and further relief
as may be reasonable and proper. In the event of a foreclosure sale or
other judicial sale, the property shall, except as provided in the next
succeeding paragraph of this section, be sold only to a housing company,
unless the court shall find that the interest on the bonds cannot be
earned under the restrictions imposed by the provisions of this article
and that the proceeding was brought in good faith. In such event the
property shall be sold free of all restrictions imposed by this article
and all the benefits theretofore granted under this article to such
project shall thereupon terminate.

2. Notwithstanding the foregoing provisions of this section, wherever
it shall appear that a government, the New York state housing finance
agency, the New York state urban development corporation, created by the
New York state urban development corporation act, the New York city
housing development corporation, Battery Park city authority, an
organization or entity investing or participating in a loan pursuant to
subdivision one of section fifteen of this chapter, or a corporation
subject to the supervision of the state department of financial
services, shall have loaned on a mortgage which is a lien upon any such
property, such government, New York state housing finance agency, New
York state urban development corporation, New York city housing
development corporation, Battery Park city authority, an organization or
entity investing or participating in a loan pursuant to said section
fifteen or a corporation subject to such supervision, or any trustee or
trustees, or any successor trustee or trustees, for the benefit of any
one or more of the aforesaid classes shall have all the remedies
available to a mortgagee under the laws of the state of New York, free
from any restrictions contained in this section except that the
commissioner shall be made a party defendant and that the commissioner
shall take all steps necessary to protect the interests of the public
and no costs shall be awarded against him or her