2012 New York Consolidated Laws
PVH - Private Housing Finance
Article 4 - (70 - 97) 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