Section 1804-A. Deed in lieu of foreclosure

1. The authority is hereby
  authorized to require at the time of the making of the loan or  issuance
  of  the  loan guarantee, or at any time thereafter, in a form acceptable
  to it, a deed to all rights  and  interests  in  the  real  or  personal
  property, as a security interest, such deed to be termed a "deed in lieu
  of  foreclosure",  and  is  empowered  hereby to record such deed upon a
  default in the payment or terms of any loan made or  guaranteed  by  the
  authority.  By  such  recording  title to and all rights of ownership in
  such  property  shall  be   thereby   transferred   to   the   authority
  notwithstanding  the  existence of any other deeds which are, or may be,
  recorded after the filing of a notice by the  authority  concerning  the
  existence  of  such  deed  in  lieu  of  foreclosure  in accordance with
  subdivision six of this section and such later recorded deeds except for
  the deed in lieu of foreclosure shall be void and unenforceable.
    2. Notwithstanding such transfer, all liens upon such  property  which
  are  duly  perfected  prior  to  the  recording  of such deed in lieu of
  foreclosure, including any lien of the authority, shall continue in full
  effect and shall be subject to foreclosure at the suit  of  any  of  the
  lienholders,  including the authority, and such lienholders' mortgage or
  other security interest shall not be deemed merged or  unenforceable  by
  such transfer.
    3.  Such  deed  given  prior  to recording shall be fully effective in
  passing title and all rights of ownership upon recording thereof by  the
  authority  notwithstanding  the  passage  of  time  or  changes  in  the
  ownership and officers of the project owner.
    4. Notice that such deed  in  lieu  of  foreclosure  exists  shall  be
  recorded  in  the  office  of the clerk of the county where such real or
  personal property is situated and shall be in  the  form  prescribed  in
  subdivision six of this section.
    5.  After  the  recording of such deed by the authority, the authority
  shall commence a foreclosure action upon its  lien  within  one  hundred
  twenty days in accordance with the real property actions and proceedings
  law.  The  grantor  and  former  project owner may commence an action to
  compel the authority to foreclose its lien after such  period  of  time,
  and  is  entitled  to  the excess of funds received from the foreclosure
  sale over the total liens outstanding on the property.
    6. Such notice shall be in the form of a deed,  duly  acknowledged  by
  the grantor and stating on its face "This is a security interest held by
  the  New  York  job  development  authority  and shall pass title to the
  within described property upon the recording of such deed in  accordance
  with section eighteen hundred four-a of the public authorities law".