Section 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 either of the state insurance department or
  the state banking department, 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.