The Foreclosure Race: Is It Worth Trying to Make a Deal with the Bank?

Is the amount you stand to recoup more or less than what the legal fees might be? Another variable is where you live: if your condominium association is in a highly populous county, a bank foreclosure usually takes much longer than it might in a less-populated county, giving a condo board more time to use as leverage with the bank.

Other considerations, Schneider says, include "the estimated value of the property, the principal amount due, whether there's been a bankruptcy, if there are other liens out there, and at what stage the bank foreclosure is at: if it's just at the summons-and-complaint stage, you have a significant amount of time. If the bank has made its motion for a judgment of foreclosure and sale, which is the end stage, then obviously significantly less amount of time is available."

But attorney James Samson, a partner at Samson Fink & Dubow, offers a warning: "When a condo board starts its foreclosure, it should ask the court for a receiver" — a person given control of a property until a legal dispute is settled — "and push real hard to use its own managing agent as the receiver" for sensitive practical reasons he did not want to state on the record.

Contrary to popular belief, one variable probably isn't whether you have to pay back property taxes, since the bank will probably have kept them current. "Tax arrears are more the exception than not, because most lenders will advance taxes," says Schneider.

"It's important for the community to have a viable, contributing resident and not an empty unit, which is not healthy to any condominium or cooperative," concludes Steven Stern, president of the 15-member board at Woodbury Greens. A homeowner in severe arrears facing foreclosure from his lender has little if any incentive to pay his common charges since he stands a good chance of losing his unit anyway. The lesson of Woodbury Greens is that there is an alternative.